Chapter ends for a sincerely Chinese rags-to-riches story

PUBLISHED : Friday, 05 November, 2004, 12:00am
UPDATED : Friday, 05 November, 2004, 12:00am

Were Ma Ying-piu, the father of commerce in China, alive today, he would be saddened.

The Sincere company he set up in Hong Kong in 1900 has just announced the closure of its chain of 80 convenience stores in Shanghai, its third defeat in the mainland's commercial capital.

In 1949, it had to abandon one of the city's biggest department stores to the new communist government, probably without compensation, and in 1999 closed a department store it had opened on a site nearby just six years before.

It owed one defeat to politics and the other to the market.

'We lost too much money,' said an official of Shanghai Sincere Daily Stop Chain Corporation. 'We are pulling out of Shanghai completely. You will not see the Sincere brand in the city.'

It is a sad moment for the Sincere company and the Ma family. Ma opened the Sincere Department Store on October 20, 1917, following the success of his store in Hong Kong, which started operations on January 1, 1900. They were the first large Chinese-owned general merchandise stores in either city and were designed for the first time for the general public and not just a wealthy elite.

Ma picked a site on Nanjing Road, the city's main commercial street, and it became one of its most fashionable shops, attracting nobility such as Song Mei-ling, second-line actresses such as Jiang Qing - the future wife of Mao Zedong - and thousands of other rich and poor shoppers.

It had 100,000 sq ft on seven floors and many firsts - lifts, fashion shows, female staff, a roof garden, acrobats and a tea house.

Customers went for entertainment and to be seen, as well as to buy its many wares.

It inspired three other Chinese companies to open large department stores in Shanghai - Wing On, Xinxin and Daxin.

All this ended in 1949, when the communist army entered Shanghai and the companies withdrew their operations to Hong Kong. The new government took over Ma's store, which is now the state-owned Hua Lian Xiangxia department store.

The Sincere name disappeared from Shanghai for 44 years until 1993, when it opened the city's first joint venture department store, also on Nanjing Road, a short distance from its old home, aiming at the top end of the market. The store prospered in the first year, but management mistakes and fierce competition drove it into the red and it closed in 1999.

The company returned in October 2002, when it spent five million yuan to register the convenience store chain. The first opened its doors in March 2003, and the company aimed for 300 by the end of that year and 3,000 in eastern China over five years. The plan was to build stores of 50-150 square metres within residential areas, with goods and services aimed to meet the needs of the residents.

But competition in this sector is even fiercer than in department stores. Shanghai has nearly 5,000 convenience stores, many open 24 hours, and many belonging to chains that buy in bulk and can obtain lower prices than those with a small network.

When it announced the closure last month, Daily Stop had 10 stores under its own management and 60 under franchise. It was too late.

'The Shanghai market for convenience stores is saturated,' said Gao Weilin, managing director of Shanghai Zhen Ye Financial Consultants, which provided valuation services to Daily Stop. 'The market is too competitive and there was no room to develop. Daily Stop needed large investment in warehouses, staff and training. It was running at a loss. The market is changing very rapidly,' he said.

The complexities of the Shanghai retail market might even have been too much for Ma. His rags-to-riches life rivals that of any Hong Kong tycoon today. A native of a poor family in Zhongshan county, next to Macau, he emigrated to Australia in 1881, in search of gold.

After six months mining in New South Wales, he moved to Sydney and found work on a vegetable farm.

Dismayed at his inability to speak English, he found an Irish woman who ran a grocery store and could speak Cantonese. He agreed to work for her for nothing but three meals a day and an hour of English tuition, which he received from her good-looking daughter.

As his English improved, he worked in local markets buying products for her, and eventually set up his own shop selling vegetables on the Sydney shoreline.

In 1892, during a visit home, he met Sun Yat-sen, the father of the Chinese Republic, and was so impressed by his vision of the resurrection of China that he agreed to provide him financial support.

He moved to Hong Kong and, in 1899, used $25,000 from 12 Australian Chinese partners to set up the Sincere Company, one of the first shareholding companies in China. He bought two shops in Queen's Road, Central.

The Hong Kong department store opened the next year and he spent heavily on interior design and decoration, an expenditure unthinkable at that time for the average Chinese entrepreneur.

The company prospered, with registered capital of $200,000 in 1909, rising to $2 million in 1916. In 1912, he set up a five-storey department store in Guangzhou.

The company branched out into entertainment, restaurants, production of soft drinks, cosmetics, glass, shoes and biscuits, and into the insurance business.

With his wealth, Ma became an active contributor to schools and hospitals and became the first Chinese director of Lingnan College in Guangzhou, to which he made major donations. He died in Hong Kong in 1944.

In Shanghai, he is best remembered for introducing the then revolutionary concept of female salespeople. At that time, the role of the woman was in the home, cooking, cleaning and raising children.

Ma advertised for women staff but no one applied. So he put his wife and other relatives to work, which inspired women to come forward. The presence of these women, many of them beauties, was itself a selling point, as people flocked to see the first female shop workers.