Hermes' Shang Xia brand launches in China. Photo : flickr

Shanghai © 2010 AFP - French fashion label Hermes on Thursday opened its first boutique for its new brand Shang Xia -- a bold strategy that highlights China's growing importance to luxury goods companies.

"We are very moved -- this is like the birth of a child," Hermes chief executive Patrick Thomas said ahead of the inauguration of the shop in a high-end shopping mall in Shanghai, China's most cosmopolitan city.

The store, a picture of minimalist chic, offers clothing, home furnishings, shoes and tableware -- a collection inspired by tea, and made from traditional Asian materials such as bamboo, cashmere and porcelain.

In front of the store, artisans put their skills on display for the widely anticipated opening, making tea cups enveloped in an intricate web of woven bamboo.

Shang Xia, whose name means "Up Down" in Mandarin, aims to boost what Thomas told AFP last month was "very strong growth" in mainland China, Hong Kong, Macau and Taiwan -- collectively now the company's "principal market."

"The idea is to bring the Hermes philosophy to China, to create a Chinese Hermes," Thomas told AFP.

The brand, which will be run as a separate entity, presents a unique China strategy for an international fashion house: building a brand from scratch around a blend of traditional Chinese craftsmanship and contemporary design.

"If Shang Xia becomes a competitor to Hermes, that would be a success," said Thomas, who added he is planning to open the new label's second standalone store in Paris, without offering a specific date.

The brand's creative director Jiang Qionger, a Shanghai-based designer who is also a minority shareholder in the new company, is managing a team of about 20 artisans who will bring to life the design team's vision.

Sales of luxury goods in mainland China hit an estimated 8.6 billion dollars in 2008, according to the consulting firm Bain and Company. When purchases by Chinese people abroad are factored in, the market was worth 20 billion dollars.

China is forecast to become the world's top buyer of luxury goods by 2015, according to consulting firm PriceWaterhouseCoopers.

Fashionistas and industry experts will closely watch the Shang Xia launch to see what lessons it could offer to other high-end foreign labels looking to tap the massive Chinese market.

Hermes is not the only brand using fine craftsmanship to attract buyers. At its flagship store in Shanghai, Louis Vuitton has set up a workshop where France-based artisans work for several weeks at a time, in full customer view.