Shanghai is seeking to emerge as a shopping paradise by revitalizing laozihao, or time-honored brands, that originated in the megapolis.
The municipal government announced a plan to this effect in May as part of its efforts to build the “four brands of the city”－services, manufacturing, shopping and culture.
“A shopping paradise is defined as where people can get whatever they want,” said Shang Yuying, director of the Municipal Commission of Commerce, during a press conference detailing the three-year plan.
Shang said Shanghai should not only satisfy the current needs of shoppers but also think ahead to curate and create new needs of consumers, so as to compete with the likes of New York, London and Tokyo.
“Apart from globally reputable brands, the ‘bricks’ to build shopping as one of the city’s four brands are Shanghai’s hundreds of locally originated time-honored brands, which will not only lure more international and domestic tourists but also inspire young and old locals to spend more,” said Shang.
The four-brand concept was first initiated by Shanghai’s Party Secretary Li Qiang at the end of 2017. It is expected to further elevate China’s eastern metropolis into a growth engine for the domestic economy and an influential player on the global stage.
Shanghai boasts an airport passenger traffic of 100 million people, according to the Commerce Commission. In 2017, the city’s retail industry netted 1.18 trillion yuan ($178 billion) in sales, up 8 percent, which helped the city to retain its tag as China’s top destination for shopping.
There are more than 3.25 million people working in the retail industry, accounting for almost one quarter of those employed.
As part of the revitalization project, 50 time-honored brands, which mostly boast a history of more than half a century, will be picked and, after some key product innovation and upgrading, pushed into the spotlight of domestic shopping spots like tax-free shops, railway train stations, airports or pop-up stores at prime locations.
Shanghai is now home to 222 time-honored brands, 180 of which are of national importance, making it the No 1 among all Chinese cities.
The laozihao concept was first proposed at the beginning of the 1990s by the Ministry of Commerce. It now also confers the honor. There is no clear definition as to how historical a brand should be in order to be named as “time-honored”.
But the ministry said all time-honored brands or the products they sell should carry the distinguished Chinese heritage or cultural traditions.
Leon Zhang, partner with Prophet, a global branding consultancy, said that relevance to target consumers is very important, be it a Chinese brand or not.
“This is even more true for the ‘time-honored brands’, as they are often obsessed with their own heritage and simply overlook the fact that consumers choose a brand because of relevance. If rejuvenation of time-honored brands is indeed a question, the answer is simple: take a consumer perspective; what matters is not where the brand is from, but who it is going after,” said Zhang.
The municipal government expects that by 2020, consumption would likely contribute 60 percent of the city’s economic growth annually.
Besides the revitalization of the time-honored brands, Shanghai’s other primary goals include two world-class streets for shopping, and another 50 new local brands.