S06: Urban Consuermism
Business History of Modern China
September 26, 2025
Place: Shanghai
- Shanghai in Yangzi Delta: Long commercial tradition with dense trade networks controlled by local guilds
- Chinese domination of inland commercial circuits
- Shanghai as gateway to Chinese market, bridging int’l market and inland provinces
Key Questions
- Transnational Chinese business networks: Wing On, Shanghai’s Premier Department Store
- Rise of consumer culture: How to market desire? The Case of Carl Crow
- Patriotic consumption and the Politics of Boycott: How to market foreign goods? The Case of British-American Tobacco
Unequal foundations: Extra-territoriality
- Foreign settlements under jurisdiction of representative consul, not Chinese gov
- Disjointed and irregular development among several powers
- Shanghai as three cities within a city: International Settlement, French Concession, and Chinese city
- Source of growth or Seed of destruction?
Auden on China
In this city the gulf between society’s two halves is too grossly wide for any bridge …And we ourselves though we wear out our shoes walking the slums, though we take notes, though we are genuinely shocked and indignant, belong, unescapably, to the other world. We return, always, to Number One House for lunch. In our world, there are garden-parties and the night-clubs, the hot baths and the cocktails, the singsong girls and the Ambassador’s cook.
WH Auden and Christopher Isherwood, Journey to a War, 1939.
Auden on China, continued
In our world, European business men write to the local newspapers, complaining that the Chinese are cruel to pigs, and saying that the refugees should be turned out of the Settlement because they are beginning to smell. And the well-meaning tourist, the liberal and humanitarian intellectual, can only wring his hands over all this and exclaim: ‘Oh dear, things are so awful here – so complicated. One doesn’t know where to start.’
WH Auden and Christopher Isherwood, Journey to a War, 1939.
Westerners in Shanghai: Not a monolith
- A diversity of national groups. Of them, the British were the largest and most influential group in 1910, controlling municipal institutions and 40% of foreign businesses.
- Large contingents from the British empire: Sikh policemen, Bombay merchants, including Sephardic Jews like the Sassoons.
- Different social circles and language communities.
- Professional hierarchy: bankers, merchants, policemen, missionaries, housewives, journalists, etc.
A City of Chinese Migrants
- Shanghai’s population grew significantly due to refugees and sustained immigration, reaching 1.3 million by 1910.
- Newcomers settled in foreign concessions, with the old Chinese quarters holding 672,000 and the concessions holding 616,000.
- Immigrants clustered based on provincial origin, maintaining distinct dialects, cuisines, and customs.
Native-place associations (huiguan)
- Regional and professional solidarities were built around huiguan, which protected community interests and had religious origins.
- Huiguan provided philanthropic services like schools and employment assistance.
- Together with professional guilds, they shared responsibilities in managing the local economy and resolving conflicts.
Nanjing Road
Rise of Chinese Department Stores
- What was new about department store?
- What was it like to shop at Wing On?
When shopping became an experience
- Service evolved from a moral obligation to modern consumer service: art galleries in dept store, room service, tipping.
- Service gave consumption its own values, emphasizing material well-being and pleasure.
New Consumer Culture
- Acquisition and consumption as the means of achieving happiness
- Cult of the new
- Democratization of desire
- Money value as the predominant measure of all value in society
Marketing Anti-Consumerism
Is anti-consumption just another form of status consumption?
“Nanjing Road Phenomenon”
- Nanjing Road shops represented the height of consumer culture in Shanghai.
- Merchants used posters, calendars, billboards, and neon signs.
- Commercial space connected to rise of public sphere, return of overseas Chinese, and new media and consumer culture.
Wing On: The Business
- Started by Cantonese investors who learned from British stores in Sydney.
- Prime location; size surpassing other retailers.
- Stocked valuable brands and presented itself as the “universal provider.”
- Used European and American models for management and operations
- Less than 15% shelf space for Chinese products; only handicrafts and local specialties on sale.
- Combined shopping with dining and entertainment – shopping as a luxury experience.
The Guo Brothers
- Guo Le (1874–1956) and Guo Quan (1878–1966) created the Wing On Department Store in Hong Kong after gaining experience in Australia.
- In 1918, they expanded to Shanghai, raising $2 million in Hong Kong.
- Their company was a limited company, but shares weren’t publicly traded, and power was concentrated in the director general.
- They adopted the department structure from Western companies, but department heads were appointed based on kinship or origin, following Chinese tradition.
Wing On and Sincere: Rival Partners
Ma Yingbiao founded Yong Chang Tai in 1894 and the Sincere Department Store in Hong Kong in 1900 before expanding to Guangzhou, Shanghai, and Singapore. Wing On, owned by brothers, Guo Le (1874-1956) and Guo Quan (1878–1966), opened in 1918. Both men came from Zhongshan, Guangdong.
Transnational Chinese Business Network
Ma Yingbiao (founder of SIncere Dept Store) and The Guo / Kwok brothers (founders of Wing On) were both part of a transnational business community that originated in Zhongshan County, Guangdong and expanded to major cities such as Sydney, Shanghai, and Hong Kong.
- Australia became a popular destination for Zhongshanese seeking fortune, especially after gold was discovered in 1851.
- Return to China in late 19th century due to nationalism, business, and the White Australia Policy.
- The success of Sincere and other department stores marked a golden age for the industry in Hong Kong and China, with Australian Zhongshanese playing a key role.
Booming through Crises
- WWI caused foreign companies in China to reduce imports, while European demand remained strong during the war and after 1919 for reconstruction.
- Chinese market benefited from reduced imports due to the war.
- Shanghai was the center of industrialization: cotton, flour milling, and other consumer goods as major industries.
Rise of Chinese Bourgeoisie
- 1920s business bourgeoisie separated itself from authorities, but maintained ties with notables.
- This bourgeoisie adopted Western methods like tech, management, and entrepreneurship.
- New bosses saw business as a vocation serving society, not just for income.
- Families invested in foreign education for their children to manage businesses better.
Agents of Commerce
More than department stores, an alliance of diverse institutions, noneconomic and economic, worked together to reinforce the new mass economy.
- National corporations and investment banks: Expansion of consumer credits
- Mail order houses, chain stores, hotels, restaurants, and department stores.
- Fields of marketing, distribution, and merchandising.
Carl Crow: America’s Ad Man in Shanghai
- 1883: Born Highland, Missouri.
- 1889: Becomes a printer’s apprentice in Missouri.
- 1909: Joins the Forth Worth Star Telegram staff.
- 1911: Arrives in Shanghai as a journalist, covers the fall of the Qing Dynasty.
- 1912-1917: Various jobs in California, Manila, Tokyo
- 1918: Establishes Carl Crow Inc., an advertising and merchandising firm, in Shanghai
Discuss: 400 Million Customers
On Changes in Consumer Culture:
- Describe the work of Carl Crow Inc. Who were their clients? What were they trying to sell to the Chinese?
- How did Crow’s agency adapt advertising strategies to the specific cultural context and business environment of Shanghai? Give examples.
Crow’s Business
- Crow’s bet: advertising, rather than journalism, presented real business opportunity due to Shanghai’s booming economy.
- A staff of about a dozen people, one of the largest in Shanghai.
- New strategies: buying ad space, organizing direct mail, managing billboards, and designing ad campaigns in English and Chinese.
- Became a prominent figure in Shanghai, serving as President of the American Club and on numerous boards.
Discuss: 400 Million Customers, continued
On Chinese Women:
- How did were Western fashion trends, such as shorter skirts, arrive in China? What role did advertising play? How did they impact Chinese women’s fashion choices and self-perception?
- Crow observes that Chinese women dress to please their husbands, while Western women dress to impress other women. Is he right, or is he being sexist and racist?
Discuss: 400 Million Customers, continued
On doing business in China:
- Crow emphasizes the importance of relationships in Chinese business. How do they work? How are they different from Western business practices? What challenges might it pose for foreign companies?
- Crow argues that there are few “salesmen” in China in the Western sense. Why does he believe this is the case, and what alternative strategies does he suggest for promoting and selling goods in China?
- According to Carl, why the seemingly boundless market of China had proved to be more a money-pit than a goldmine for so many foreign businesses?
Discuss: 400 Million Customers, continued
Taking a step back:
- How credible is Crow as an observer of Chinese business and culture? What are his biases, and how might they influence his analysis?
- How did advertising contribute to changing attitudes and behaviors among Chinese women?
- What impact did Western firms have in the development of Chinese consumer market in the early 20th century?
James Duke: “Give me an atlas”!
- Invention of the cigarette machine in 1881
- Upon seeing China’s population – 430,000,000 –James B. Duke (1865-1925), founder of Duke University, said: “That is where we are going to sell cigarettes.”
Tobacco: America’s Greatest Export to China
- The Dukes began exporting cigarettes to China in 1890.
- British American Tobacco Company (BAT) formed in 1902 with the Duke’s chief competitors in England
- From 1915-1920s, US cigarette exports to China exceeded the rest of the world combined.
- British American Tobacco (BAT) sold 80 billion cigarettes in China in 1928, amassing $380 million in profit in China between 1902-1948.
Activity: Design an ad campaign
You are an advertising team preparing a pitch for BAT’s next publicity campaign.
- Define the objective and message
- Who are your target audience? Profile, needs, behaviors
- Design a visually appealing layout: Colors? Images?
- Write an impactful copy: Any catchy headlines, memorable taglines?
Haipai: Shanghai Modern
My Dear Cigarettes
May 30th Movement (1925)
- May 30 Incident/Movement: Sparked by the killing of a Chinese worker in a Japanese factory and subsequent student demonstration in Shanghai’s International Settlement.
- Police fired on demonstrators, resulting in casualties and widespread strikes and boycotts organized by student associations, merchant groups and workers’ organizations.
National Products Movement
- How should British-American Tobacco change its advertisements in face of growing consumer boycotts?
- How should it respond to challenges from Chinese tobacco companies?
Boycott Politics: A Business Opportunity?
- Boycotts occurred in 1919-1921 (against Japan), 1923-1924, and became widespread in 1925-1926.
- During the May 30, 1925 movement, commercial organizations supported workers and strikers – perhaps more out of a desire for compromise, stability, and order than revolutionary sympathy.
- Chinese businesses to leverage boycotts to encourage patriotic consumption and to increase their market share.
- Anti-foreign protests were also coupled with the Nationalist Party’s development plans for national industries.
Chinese Consumer Culture
- Consumerism was critical to the creation of modern China.
- However, Chinese consumerism wasn’t primarily about individual freedom, comfort, or pleasure.
- The movement linked citizenship, patriotism, and consumption: Buying is not just a personal choice, but a test of political loyalty.
Boycotts in China Today
Boycotts against China Today
Crow: Life after Shanghai
- 1937: Sino-Japanese War breaks out; Crow on Japan’s “Most Wanted” list and leaves for America after 25 years; 400 Million Customers published.
- 1939: Crow reports on China’s war effort, travels the Burma Road to Chongqing, meets Chiang Kai-shek, Madame Chiang, and Zhou En-lai.
- 1941: Far East desk of the Office of War Information; calling for American support for China
- 1945: Crow dies in New York City.