What happened: A new museum in Shanghai highlights some of China’s most classic brands. The Huashan 263 Laozihao Pavilion, which opened on Oct. 1, is the city’s first public space with a comprehensive display of Laozihao 老字号 — a special title given by the government to businesses that existed before 1956 and possess distinct Chinese cultural characteristics. Shanghai’s 100 representative groups include candy maker White Rabbit, sporting goods company DHS Sports, eyewear line Maochang Glasses and qipao brand Longfeng. These names will set up installations showcasing their products as well as their decades-long history.
The Jing plug: While the museum spotlights Shanghai-based Laozihao, there are actually more than 1,000 companies nationwide who qualify for this title, including traditional Chinese medicine vendors, silk fabric shops, teahouses and Peking duck restaurants. While these establishments are held in high regard – some have been around for hundreds of years – many have also struggled financially and lagged behind in innovation. In 2016, the famous economist Li Yining pointed out that only about 20 to 30 percent of these age-old institutions are still growing.
But that started to change. On the one hand, Laozihao enterprises have made greater efforts to digitize, opening virtual stores on Taobao and Tmall to use services like Meituan and JD.com to better market and distribute to today’s consumers. The government has also intervened by implementing the “Secular Brands Revitalization Project” in 2006 to promote their development and then renew this commitment in 2022 (Steps to be taken include protecting their intellectual property rights and original build sites, supporting global expansion, and increasing publicity).
More interestingly, these esteemed national names have benefited from the recent wave of Guochao and the nostalgia marketing boom. As CBNData notes, the two main consumer groups in Laozihao are Generation Z, who have a strong sense of national pride, and the silver-haired generation (those over 60) who actually grew up with these labels. To win the first Neiliansheng (a Beijing shoe store founded in 1853) opened pop-up shops, launched collaborations – Neiliansheng’s co-branded shoes with Chinese film Big fish and begonia sold out in less than 18 hours – and even played in Fashion Scout show in London Last year.
As such, partnerships between Laozihao and global companies can be mutually beneficial. For local players, partnering with foreign intellectual property or products could help them innovate to stay relevant and target new markets. For international labels, Laozihao outfits not only provide an avenue for nostalgic marketing, but also a way to convey a deeper understanding of local heritage – beyond pop culture and KOL trends.
White Rabbit best illustrates just how far Laozihao’s concerns can go: Founded in the 1940s, the Shanghai candy maker has become a global sensation, expanding into cosmetics, perfumes, milk teas and streetwear thanks to to collaborations. He also opened a funhouse like flagship store in his hometown last year that pushes the boundaries of traditional retail. This combination of iconic branding, immersive storefronts and fun marketing campaigns are key ingredients to winning over a new generation of consumers and moving a traditional home into the future.
The Jing Plug reports on high-profile news and features our editorial team’s analysis of key implications for the luxury industry. In the recurring column, we analyze everything from product declines and mergers to heated debates popping up on Chinese social media.