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Marketing Medicine and Advertising Dreams in China, 1900–1950
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During the first half of the twentieth century, businesses published and distributed advertising for "new medicine" in China on a grand scale. They made pictorial advertisements accessible to all social classes, including illiterate as well as literate observers, and they circulated these advertisements in all of China's nine macro-regions (lower, middle, and upper Yangzi, northeast, north, northwest, southeast, south, and southwest).[76] The biggest of the Chinese-owned drugstores conducted nothing less than mass advertising by operating marketing systems on three tiers: at Shanghai headquarters, in regional branches, and through local franchises.

Shanghai Headquarters. In the early twentieth century, Shanghai pulled ahead of its rivals as the city of choice for the headquarters of Chinese-owned businesses

selling "new medicine." As early as 1907–8, Shanghai became China's print capital and leading exporter of newspapers and advertising, and between 1911 and 1936, Shanghai surpassed Guangzhou as the most popular base for businesses selling and advertising "new medicine." As late as 1911, Shanghai ranked about the same as or slightly behind Guangzhou as a center for this trade, with each city housing 28 Chinese-owned new-style drugstores and with Shanghai handling 10 percent of China's imported drugs compared to Guangzhou's 12.2 percent. But by 1936 Shanghai far surpassed Guangzhou as the trading center for Chinese sellers and importers of new-style medicine, serving as home for 166 Chinese-owned new-style drugstores compared to Guangzhou's 84 and receiving 77 percent of China's imported drugs compared to Guangzhou's 5.9 percent (and Tianjin's 9.2 percent).[77]

Among Chinese entrepreneurs, Huang Chujiu was one of the first to establish formal headquarters at Shanghai, and for this purpose he designed buildings that themselves served as advertisements. In the 1920s, he deliberately selected sites for his buildings on corners at busy intersections in Shanghai so that they would attract attention. He housed his headquarters in his two most prominent office buildings, one at the corner of Beijing Road and Zhifu Road and the other at the corner of Fuzhou Road and Shandong Road. In 1928, when he decided to build them, he formulated "Basic Guidelines for the Design of the New Stores," which he gave the architects and builders to follow. In these guidelines, he emphasized the importance of big plate glass windows to showcase eye-catching displays, and he allowed no steps at the entrances because he wanted the buildings accessible to all, particularly the frail and elderly in search of medicine. Once completed, the buildings were ringed on the ground floor with windows whose design and construction (not counting displays) cost more than 30,000 taels. Each building stood five stories tall and was topped with a roof of gleaming ceramic tiles, one yellow and the other green. Even Huang's medicine factory attracted attention because he gilded its sign with twenty ounces (liang) of real gold.[78]

Of all Huang's buildings, the one with the greatest advertising value was the Great World (Da shijie), a five-story amusement hall that he opened in 1917 in Shanghai's French Concession at the corner of Tibet Road and Avenue Edouard VII (today's Yan'an Road). At the Great World, Huang installed distorting mirrors, staged Chinese regional operas, and supplied other forms of popular entertainment that attracted huge crowds—an average of twenty thousand paying customers per day—and as the pleasure seekers moved from one floor to the next in this rambling building, he exposed them to walls covered with advertisements for his medicines. Outside the building he also used the Great World to spread his advertising. On its facade he affixed billboards, and from its tower he launched advertising stunts, flying a huge kite, for example, that dropped advertising leaflets onto surrounding neighborhoods. Day after day he tied so much advertising to the Great World that people at the time began jokingly calling the place "Huang Chu-jiu's ‘Commercial World’" (Shangpin shijie).[79]


Besides designing buildings, Huang Chujiu and his staff also designed advertising at his Shanghai headquarters. He established a specialized advertising section (guanggao ke) and heavily funded it, allocating to it between 60 and 75 percent of the budget for his most popular medicines (leaving only 25–40 percent for the cost of manufacturing and distributing these goods). Part of this advertising budget covered salaries for painters and writers who, as noted earlier, were well paid by the standards of the time. Another part of the advertising budget financed the founding and operation of a radio station, Mainland Radio (Dalu diantai), a wholly owned subsidiary of Huang's business, which broadcast commercials for his medicines as sponsors for serialized adaptations of Chinese classics such as The Story of the West Wing (Xixiangji) and other programs every day. A third part of the advertising budget covered the cost of making visual commercials—slide shows and short films preceding feature-length movies at theaters. And a fourth part of the budget was spent on newspaper advertisements, including some of an unprecedented kind. In the 1920s, for example, Huang Chujiu was the first in Shanghai to take out full-page newspaper advertisements—a practice subsequently adopted by several other new-style drugstores. In 1923, when he launched a new medicine called "Machine for Long Life" (bailingji), he ran full-page advertisements for it in newspapers once or twice every month; at the same time he separately published his own magazine, Long Life Pictorial (Bailing huabao), which was devoted largely to advertisements for this product.[80]

In Shanghai, besides broadcasting commercials over the radio and running advertisements in newspapers, Huang and other sellers of new medicines distributed published advertisements through a merchandising hierarchy of wholesalers and retailers. At the highest level were the sixteen biggest Chinese-owned drugstore chains, each capitalized at more than 100,000 yuan. They made their own advertising and distributed it through their own chains of drugstores. By 1936, some had six wholly owned branch stores apiece in Shanghai, and altogether the sixteen biggest drugstore chains accounted for 68.3 percent of sales of "new medicine" in Shanghai at the time. At the next level were medium-sized drugstores capitalized at an average of 15,000 yuan, with sales of 30,000 yuan per year. From these medium-sized drugstores, Huang's firm and other big drug companies rented window space for their advertising. Still lower in the hierarchy were small drug-stores capitalized at an average of 2,000 yuan, with sales of 15,000–30,000 yuan per year, and below them were restaurants, tobacconists, and other commercial vendors, including itinerant peddlers. Big drugstores supplied advertising to these retailers either directly or indirectly through wholesalers.[81]

In the absence of detailed data, it is difficult to assess the effectiveness of this advertising in Shanghai, but the available evidence suggests that by 1936 it helped new-style drugstores (which all carried heavily advertised "new medicine") to outsell old-style drugstores (which all carried unadvertised traditional Chinese medicine).[82] As shown in table 2.1, even though in 1936 new-style drugstores in Shanghai

TABLE 2.1 A Comparison of Chinese-Owned New-Style
and Old-Style Drugstores in Shanghai, 1936
  No. of Stores Capital (in Yuan) No. of Employees Sales Volume (in Yuan)
    SOURCE: Shanghai shehui kexue yuan jingji yanjiu suo, comp., Shanghai jindai xiyao hangye shi(Shanghai: Shanghai shehui kexue yuan chubanshe, 1988), 120, 123.
New-style 166 7,550,000 2,012 41,510,000
Old-style 498 13,530,000 5,400 41,880,000
were far less numerous, less well capitalized, and less well staffed than old-style drugstores were, they generated about the same amount of total sales revenue.

Shanghai-based new-style drugstores advertised more intensively in Shanghai than in other cities (and most intensively of all in Shanghai's foreign concessions, where their headquarters were concentrated), but they did not confine their advertising to this one city.

Regional Branches. Outside Shanghai, as within it, the biggest new-style drug-stores established wholly owned branch drugstores, and they modeled these branches after the ones in Shanghai. As in Shanghai, they tended to locate each branch conspicuously on a corner at an intersection in the heart of a highly commercial area. Over each entrance they placed a large wooden signboard proclaiming that this drugstore was a branch of the Shanghai-based parent company. They designed branches as new-style drugstores, which, by contrast with old-style Chinese drugstores in each city, were multistoried buildings featuring clock towers, plate glass windows, and brightly lit interiors for displaying medicines to passersby and coaxing them inside.[83]

From their Shanghai headquarters, the biggest drugstores paid directly for newspaper advertising in their regional branches' localities. By the 1930s advertisers could take advantage of newspapers originating in every province of China. In 1935 China had 313 "big dailies" (consisting of one big sheet or more in each issue) plus 600 small and irregularly published newspapers. Altogether, according to an estimate at the time by Lin Yutang, 30 million Chinese read newspapers every day.[84]

The biggest Chinese drugstores distributed their own advertisements—which had been published in Shanghai—to their regional branches. As early as 1916 Huang Chujiu sent advertising teams outside Shanghai to put up posters and organize parades for distributing handbills in other cities. By 1936, several new-style drugstores based in Shanghai owned regional branches in metropolises at the cores of six of China's macroregions (lower, middle, and upper Yangzi, north, south, and southeast), leaving them without branches in the remaining three

(northeast, northwest, and southwest).[85] Their branches, in turn, distributed advertising and goods to the parent companies' local franchises.

Local Franchises. Without investing in additional branches, big new-style drugstores extended their sales networks by recruiting independently owned drugstores to serve as local franchises (lingpai lianhao). They arranged for local Chinese shopkeepers to affiliate with them by seeking out interested parties, negotiating deals, and signing contracts.

From the standpoint of the parent companies, their affiliations with franchises provided an inexpensive means of advertising their products in untapped markets. They added new franchises only in cities and towns where they had not previously opened a regional branch or designated a franchise, and they assumed no legal responsibility for a local franchise's losses. They tried to persuade each franchise to sign exclusive dealing agreements in which the franchise holder promised to sell only the medicines of the parent company, not of any rival, but they frequently accepted franchises where the local owners rejected this provision.[86]

For a local drugstore, the principal advantage of becoming a franchise took the form of advertising. The direct financial benefits for the local franchise were minimal—small discounts, early notification of sales, year-end commissions depending on the franchise's sales volume—and provided no guarantees of compensation in case of losses. But the amount of advertising supplied by the parent company was plentiful. The local franchise named its shop after the parent company, declaring on its shop sign that it was a branch (fenzhi), and became, in the words of a recruiting brochure used by one of the big drugstores based in Shanghai, part of "a well-organized advertising network penetrating every corner of the country."[87]

This claim that a company "penetrated every corner of the country" might sound like an advertising agent's cliché, but in fact between 1912 and 1936 the biggest new-style drugstores did reach all nine of China's macroregions by means of franchises. As shown in table 2.2, the three biggest drugstore chains distributed goods and advertising nationwide to 162 local franchises in 105 of China's cities and towns, and they marketed outside China through 15 local franchises in Taiwan, Hong Kong, Singapore, Indonesia, Malaya, and Thailand.

Advertising for Chinese-owned new-style drugstores also was distributed outside cities and towns. Its success at reaching down the urban hierarchy into rural China is evident in the fact that Chinese peasants were still using pre-1949 calendar posters to decorate their homes in the early 1990s. In 1992, when the art critic Zhang Yanfeng began searching in China for forms of pre-1949 commercial art, she and her research assistants found little in the cities, where, they were told, such bourgeois remnants had survived until the 1960s but had been destroyed during the Cultural Revolution. So they extended their search outside the cities into the countryside in four regions—the lower Yangzi, north China, northeast China, and south China—where they eventually discovered 586 pre-1949 calendar posters hanging on walls in the homes of peasants.[88]

TABLE 2.2 Regional Branches and Local Franchises of Three Shanghai-Based Drug Companies (China and the West, China-France, and Five Continents), 1912–1936
Region of China or Country or Colony outside china No. of Cities and Towns with Regional No. of Towns with Regional branches No. of Cities and Towns with Local Franchises No. of Local Franchises
    SOURCE: Shanghai shehui kexue yuan jingji yanjiu suo, comp., Shanghai jindai xiyao hangye shi(Shanghai: Shanghai shehui kexue yuan chubanshe, 1988), 95–96, 98–99, 391–92.
Lower Yangzi 6 23 41 65
Middle Yangzi 5 7 17 28
Upper Yangzi 1 2 2 3
Northeast China 0 0 4 6
North China 4 5 23 30
Northwest China 0 0 6 8
Southeast China 1 1 5 11
South China 1 1 5 8
Southwest China 0 0 5 3
Taiwan 0 0 5 4
Hong Kong 0 0 1 4
Singapore 0 0 1 1
Indonesia 0 0 3
Malaya 0 0 1 1
Thailand 0 0 2

Reaching a Mass Audience. Did this advertising reach a mass audience in China? In their article on the beginnings of mass culture in China, Leo Oufan Lee and Andrew Nathan have defined mass culture as "culture that is nationwide, universal to all classes, and consciously engineered and controlled from above," and using this definition they have concluded that in China "it was not until after 1949 that a truly mass audience was created."[89] If taken literally, this definition sets unrealistic standards for assessing mass culture in Chinese history. In a country so large and diverse, it is doubtful whether any cultural medium even up to the present has become nationwide and universal to all classes, and it is questionable whether in any country culture is ever engineered and controlled entirely from above. Nonetheless, this definition has the advantage of specifying three useful criteria—the reach across space, reach across classes, and control over production.

By each of these three criteria, advertising for "new medicine" functioned as a formidable medium of mass culture in China before 1949. As shown above, in accordance with the first criterion, it reached nationwide to the extent that it circulated in all of China's macroregions (not to mention Southeast Asia). In keeping with the second criterion, it became "universal to all classes" to the extent that it used pictorial representations and itinerant drummers to reach the literate and the illiterate,

the peasants and the urban dwellers. And in conformity with the third criterion, it was "consciously engineered and controlled from above" to the extent that entrepreneurs like Huang Chujiu supervised its design, production, and distribution.

This conclusion is valid for the years 1912–36, as documented in table 2.2, but did advertising for "new medicine" continue to function as a medium of mass culture over a longer period of time? In an era of political turmoil and military conflicts, its durability was put to the test.

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