14,500-Square-Meter Store On City’s Left Bank Expected To Entice Well-Heeled Chinese And Other Tourist-Shoppers
Hermès expects Chinese tourist-shoppers to be regular shoppers at its vast new flagship in Paris (Image: Pinkmemo)
This week, Suzy Menkes of the New York Times takes a look at the new, super-sized Hermès flagship in Paris, a temple to international commerce she describes as “a way station on a new Silk Road, designed as a destination for shopping tourists, who increasingly come from China.” From the article:
The lure of lavish flagships, in Paris as in elsewhere, to Asian luxury consumers hasn’t faded over the past 30 years, even as Japanese tourist-shoppers have been supplanted by South Korean, then Taiwanese, and now mainland Chinese. In their 2006 book The Cult of the Luxury Brand: Inside Asia’s Love Affair With Luxury — critical reading for anyone interested in the Asian luxury market — Paul Husband and Radha Chadha write,
Hermes' Ginza flagship, opened in 2001, was built at the peak of the Japanese luxury consumption boom
In building its newest Parisian “luxury cathedral,” in the words of Husband and Chadha, Hermès recognizes that the situation is quite different for consumers in places like China than it was for the previous generation of Asian tourist-shoppers from Japan or South Korea. In China, though Hermès boasts a number of boutiques in 16 cities, it currently lacks a mega-flagship on the level of that found in Ginza. However, much of this is likely due to a keen understanding of the idiosyncrasies of the mainland China market, more than anything else.
Hermès knows two important things about the China market as it stands today: first, that wealthy Chinese luxury consumers would gain greater prestige back home by shopping at the new Paris flagship than they would at an equally lavish Shanghai flagship, and second, that the relatively lower price in Paris (or even Hong Kong, for that matter) due to China’s high luxury tax, means that fewer potential buyers — at least in wealthy top-tier Chinese cities — will shop locally. As a result, it would take far longer for Hermès to see a return on investment from a multi-million-dollar flagship in Shanghai or Beijing than it would in Paris, Tokyo, or possibly even New York.
However, it would be foolish to think that Hermès, by focusing on smaller boutiques and strictly limiting its China expansion, is missing opportunities. Preserving its exclusivity by avoiding the ubiquity of brands like Louis Vuitton is a company trademark, and with the recent launch of Shang Xia — the homegrown Chinese brand it supports — Hermès is showing a deeper interest in Chinese design and culture than other imported brands, some of which fall back on Orientalist motifs that have, at times, left Chinese consumers cold.
So, in essence, if Hermès doesn’t have to build a China flagship that rivals Louis Vuitton’s in Shanghai or Burberry’s in Beijing right now, why should it rush?