 Shanghai-based analyst, author and Chief Representative for business research specialists Access Asia Paul French explains why no marketing ideas are new in China – because a journalist-turned-businessman from Missouri went there, saw it and did it all almost a century ago.
‘So long as people of one country make goods to sell to others, so long as ships cross the ocean…the golden illusion of the sales which my be made to China’s industrious millions will always be an intriguing one. No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so.’ Carl Crow – 400 Million Customers (1937)
Trite but true – ‘Those who cannot learn from history are doomed to repeat it’ said the philosopher George Santayana. So perhaps it behoves those of us trying to do business in China now to look back at what our forefathers learnt. There’s a wealth of experience out there to reference back to - Francesco Pegolotti was an agent of the prestigious Florentine Bardi Bank who around 1340 wrote a manual for merchants travelling to China - La Pratica della Mercatura (The Practice of Marketing) which included tips on how to learn the language and to spot fake silk. This could be useful if you’re planning a trip to the fabric market but may be a bit dated for today’s businessmen – and annoyingly it’s all in Latin. English missionary Robert Morrison’s Commercial Guide from 1834 is useful but it’s also a bit dated, and basically only contains information on Guangzhou as foreign businessmen weren’t allowed more than a few hundred yards from the waterfront at the time.
Jump forward another century and arguably the American journalist and advertising entrepreneur Carl Crow is a bit more relevant. Crow left Missouri in 1911, moved to Shanghai and stayed till 1937 running first, the highly successful China Press newspaper and then his own groundbreaking ad agency Carl Crow Inc – China’s first western style ad firm. What he learnt the hard way in the 1920s and 1930s still beats just about anything trotted out to wide-eyed MBA students today. Consider this portrait of the business landscape in China from his classic 1937 book 400 Million Customers:
‘China is a market of long receivables, rigid markets, structural inefficiency, impossible logistics and relentless brazen copying and substitution of imported goods with fakes.’
Crow had his fair share of fakes to deal with back then – pharmaceuticals and soap being the most abused but he also had to deal with fake German horseshoes, which are not so common nowadays. He also had to get round the high rates of illiteracy and haggle with bandit warlords who shot at his billboards – again, not such common problems these days.
However, Carl did have to deal with foreigners who’s theoretical projections of sales to China’s vast market of 400 million souls never quite materialised in the harsh light of day – now the numbers are different, we do billions instead of millions, but the projections are often just as hopeful and just as infrequently realised. Many dreamt of bringing their unique products to a new market only to find them copycatted and faked within days killing sales and margins. Those pharmaceutical manufacturers worked on numbers of 400 million and forgot that 1930s China had just 25,000 hospital beds nationwide.
Crow was working during the massive influx into China of foreign businesses in the 1930s – he called it an ‘outbreak of measles.’ They established fancy offices and ran large ad campaigns, which did very nicely for Mr Crow’s profits but little for their own. He noted something else that may ring a bell in contemporary Shanghai:
‘The fact that Shanghai was ripe for a big real estate development occurred to some financiers, dingy old buildings were pulled down and newer, finer and more expensive ones put up for which we had to pay a higher rent. With lifts instead of stairs, plate glass windows and all the other modern facilities it was only natural that there would be a change of furniture too. All the buildings were occupied by foreigners. Chinese moved into cheaper, older buildings…getting cheaper offices and cheaper furniture.’
Again, at the risk of repetition, sound familiar?
Today’s advertising community in China has a few things to thank Crow for too – using women in car adverts, displaying the freedom obtainable through owning a combustion engine of their own? Crow pioneered the use of women in car ads in China in the 1930s for his client Buick. Database marketing? Nothing new; Carl pioneered list building in 1918 by recruiting the community of inland missionaries to send him names and addresses of local notables across the country so he could better target advertising at them. Bus ads? Sorry, nothing new; Crow put ads on Shanghai trolley buses 80 years ago. OK, so he didn’t have the Internet but he was the first to issue bi-lingual directories of fashion brands and which shops stocked them – a sort of prototype shoppers search engine.
When it comes to business in China it’s pretty much all been done before and most of it was done by Carl Crow.
Paul French’s Carl Crow: A Tough Old China Hand - The Life, Times and Adventures of an American in Shanghai is published by Hong Kong University Press.
This book is available by clicking here through our secure Amazon bookstore.
Last update : Tuesday, 08 January 2008
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