EFFORTS to reverse the demise of China’s time-honored brands are motivated by a mixture of national pride and nostalgia for past golden eras. In Shanghai, where the majority of most famous brands originated, that has proven a tough mission.

The city government has implemented a number of measures aimed at restoring once venerable brands to their former glory. It has allocated direct subsidies, organized marketing campaigns, helped companies restructure and introduced strategic partners.

Good intentions, however, have not translated into successful business outcomes, in the view of some political advisers.

“We have to acknowledge the government’s noble aim,” Wang You, a political adviser and deputy general manager at Shanghai Hualian GMS Shopping Center Co, told a recent meeting. “But sometimes the government pushes too hard, and sometimes in the wrong places.”

A lot of talk goes on. Every year during the plenary conference between the Shanghai People’s Congress and the local committee of the Chinese People’s Political Consultative Conference, the subject of how to rehabilitate venerable brands invariably appears on the agenda.

Since 2007, the Shanghai Commission of Commerce has sponsored the annual China Time-Honored Brand and Famous Brand Expo. The problem is that most of the visitors the event attracts are gray-haired. The young, who are crucial to the revival of old brands, have shown little interest.

That pretty much sums up the government’s dilemma. Many ideas about how to restore old brands look good in principle but don’t quite work in practice.

For example, Shanghai created a special fund to develop time-honored brands. The money was allocated directly to target firms, but instead of using the funds for technological upgrading or product innovation, many recipients used it to pay off debt or pensions to retirees.

Shanghai also came up with a plan to create a special street where companies with time-honored brands could be concentrated. Unfortunately, the site selected was a back street near the popular Nanjing Road W shopping avenue, where glitzy foreign brand shops hold strong consumer sway.

City officials are now just beginning to realize that restoring old brands means restoring venerable shops to their original locations. That means reviving old brands along Nanjing and Huaihai roads, the two historic shopping streets in Shanghai where the brands once thrived.

Just recently, several time-honored brand shops returned to Huaihai Road.

It was an admission that district authorities had erred when they forced some of the city’s old stores like Lao Da Chang, Cang Lang Ting, Harbin Foods and Changchun Food to vacate Huaihai road to make room for razzle-dazzle foreign occupants like Cartier, Tiffany, Coach, LV and Zegna.

“The idea was wrong in the first place,” said Zhu Zhengping, a political adviser and president of Shanghai Sinna Co. “What makes a street international? Not just lines of so-called international brands ... but rather a street offering a variety of products, some of which are unique to the city and will be of interest to foreign visitors.”

Zhu said in South Korea, high-end shopping malls always reserve up to half of store space for homegrown brands.

Overly solicitous?

Has the Shanghai government simply been overly solicitous in trying to revive the old brands and companies?

“The government should not tie these companies to its apron strings,” said Qian Shichao, a professor of business management at East China University of Science and Technology. “Such a ‘caring’ strategy makes our brands even less competitive.”

In his view, there is little hope that most old brands can be easily resurrected because the chasm between what they once were and what they are now is too great.

However, local authorities don’t seem quite ready to throw in the towel yet.

Chen Yuehua, an official at the Shanghai Commission of Economy and Informatization, said the government will gradually withdraw direct financial subsidies and reallocate the funds to help brand owners with professional management training.

“We plan to invite third-party agencies to train people to improve brand management,” Chen said. “Also, we will increase investment to fund a concerted marketing campaign for all of Shanghai’s time-honored brands.”

Some doubt that throwing more money at the problem will make much difference. The impetus, they argue, needs to come from within the brand firms themselves.

“Some problems are innate and not about money,” said Feng Maolun, a legislative adviser.

One sticking point is that the heads of state-owned brand companies are usually political appointees. With friends in high places, the fate of a brand may not be high on a manager’s agenda, Feng said.

Those who favor a more hands-off approach point to examples where old brands have revived their own fortunes without government interference.

A prime example is Shanghai Zhangxiaoquan, a government-owned scissor maker with a 400-year history. The firm was taken over by a private firm in 2005.

“You can never overstate the value of this brand,” said Chen Yuebin, general manager of Zhangxiaoquan, who said he considers himself a professional manager. “We really wanted to revive the brand and help it grow bigger.”

After restructuring, Zhangxiaoquan established a strong 60-member sales team, most of whom were in their 20s and 30s. An incentive payroll system was implemented to enable the best staff to draw decent salaries, compared with the less than 2,000 yuan (US$325) each month they were earning before privatization.

The company also strengthened research and development, adding new products like knives made of porcelain and double-layered bronze hotpots.

“Design, quality and service. That is what we have been striving for in the past 10 years,” Chen said. “Our mindset was focused on innovation.”

The strategy has paid off. Zhangxiaoquan has been enjoying steady business increases the past five years.

It’s a story that city officials would like to see replicated.

“People used to come to the city and take home special Shanghai products as gifts,” Feng said. “We hope to see a return to those days.”

The campaign to promote time-honored brands goes all the way to the top of China. On official trips with her husband Xi Jinping to Russia and Africa last year, Chinese first lady Peng Liyuan presented foreign leaders with gifts of time-honored brand products, including Pechoin cream, Ruans pearls and exquisite shuxiu Sichuan-style embroidery.

Like Milan for garments and Paris for cosmetics, Shanghai yearns for signature brand identity. If the campaign to save time-honored brands manages to salvage just a fraction of the old names, it may be the best outcome authorities could hope for.

(Shanghai Daily intern He Yuxi contributed to this story.)