(Image: www.travelsfinder.com)
No organisation has left a larger footprint on Hong Kong‘s long colonial experience under the British (1841-1997) than the hongs (see Endnote). And one British hong that has been especially significant in shaping the course of British (and beyond) Hong Kong has been Jardine, Matheson. The company under the direction of Scots William Jardine and James Matheson arrived in Hong Kong on the ground floor, securing lot No. 1 on Hong Kong Island in the initial land sale by the British colonial administrators in 1841 [‘Jardine, Matheson – company history’, www.jardines.com].
⍗ Jardine’s original business premises on Causeway Bay
Jardine, Matheson Co Hong Kong replaced the firm’s previous base in Canton (Guangzhou). From Hong Kong (which soon become Jardine, Matheson’s headquarters) and from the startup of it’s Shànghâi operation a couple of years later, the company laid the foundations of it’s fortune initially from a highly profitable trade of smuggling opium (as well as tea, silk and cotton) into mainland China from South Asia. Jardine, Matheson quickly diversified into more ethical and legal enterprises, adding steamships to their portfolio from the 1850s (China Coast Steam Navigation Co, Indo-China Steam Navigation Co, Yangtśe Steam Navigation Co) which serviced the trade routes to Japan, Singapore, Calcutta, Manila and Vladivostok [‘Jardine, Matheson & Co. Steam Nav. Co / Indo-China Steam Nav. Co / Yangtse S.N. Co.’, www.theshipslist.com].
Taipan Wm Jardine ⍗
Jardine Matheson, a ubiquitous hong
Over the years Jardine, Matheson (JM Co) continued to diversify—cotton mills, property, breweries, insurance, financiers (of the first railway in China), sugar plantations, etc. All the while extending it’s trade links – Europe, Africa, Australia, America. Later JM Co got into hotels, motor vehicles, food and hygiene product wholesaling and so on. They functioned as Far East agents – for gunmakers amongst other manufacturers. JM Co even acted in a para-government capacity for consuls for foreign powers doing business in the region, as did other hongs [Jan Morris, Hong Kong: Epilogue to an Empire, (2000)].
Hong Kong Island ⍗
Butterfield and Swire
This particular British hong was something of a latecomer to Hong Kong compared to the pioneering Jardine, Matheson Co. The B&S trading house arrived on the Island in 1869. But Butterfield and Swire did not waste any time in developing into one of the most powerful players in the territory. The driving force behind the company was John Samuel Swire✱. Previously, Butterfield, Swire and his brother William, had started a shipping and trading business in Shanghai. The Swire hong’s road to riches was predicated, not on the illicit drug trade like JM Co, but on a combination of shipbuilding, sugar-refining, banking, insurance, mining, railroad building and other later entrepreneurial pursuits in the Far East, such as bottling Coca-Cola for Asia’s markets. Swire’s diverse subsidiaries have included the Taikoo Sugar Refinery, Taikoo Dockyard – which built mainly steamboats for the China Navigation Co, another Swire subsidiary. Since the 20th century another star in the business stable of the Swire Group☒ is the leading Asian airline Cathay Pacific. Early on Swire’s was also an agent for the Blue Funnel cruise ship line [Morris; ‘Butterfield and Swire’, (School of Oriental and African Studies, London University), The National Archives, http://discovery.nationalarchives.gov.uk].
Taipan JS Swire, “the Senior” ⍐
(Photo: www.industrialhistoryhk.org)
JS Swire’s leadership and business style was unequivocally ruthless and uncompromising, he was very much of the “take-no-prisoners”, old school of business. Under “The Senior” Swire, the company played a telling part in driving some of the other Hong Kong frontier merchants into eventual business oblivion – as happened with two pioneering hongs, Dent and Co and Russell and Co (Morris).
Jardine, Matheson v Swire/Ewo v Taikoo☒
Swire‘s great and enduring rival in Hong Kong (and in the East) has been JM Co. For both hongs in the formative years the main game was about buying and selling in China for the European market. As both firms added more business pursuits to their respective China Sea empires, they came more into competition with each other. Swire’s Quarry Bay Taikoo Dockyard and sugar refinery for instance was in stiff competition with Jardine’s Kowloon Whampoa dockyard and refinery [‘Taikoo Sugar Refinery’, Wikipedia, http://en.m.wikipedia.org].
⍗ SS Shuntien, built at Taikoo Docks 
Dynastic hongs with staying power
The Jardine presence in Honk Kong and at the helm of the company continues to this day through the Keswick family, ancestors of founder William Jardine’s sister. In a similar vein, the Swire name retains a connection with the present Swire Group (current conglomerate chairman Barnaby Swire is a descendent of John Samuel Swire and there are other ‘Swires’ in the management hierarchy).
(Photo: www.hkland.com/)
1984 and beyond
After several years of tortuous negotiations between the UK Thatcher government and China agreement was finally reached to hand over Hong Kong to Beijing in 1997. This left Swires and Jardines, two of the British hongs with most at stake, with the thorny issue of whether to stay in the erstwhile British colony or not under the hard-to-predict communists. Swires, who had earlier pulled its businesses out of China four year after the communist takeover (to later return), chose to keep its operational base in Hong Kong. Swires sought to work with the Chinese regime, entering into airline deals to give the PRC an interest in Cathay Pacific and secure a domestic foothold for itself. The Jardines conglomerate opted for a different strategy, choosing in 1984 to cut and run, switching its legal domicile from Hong Kong to Bermuda and delisting on the HK Stock Exchange in favour of London and Singapore. This move earned Jardines the ire of Beijing⇟. Even after the ink was dry on the hand-over decision, JM Co continue to lobby the British government hard (with Simon Keswick particularly vocal) to keep the territory out of Beijing’s clutches [Felix Patrikeeff, Mouldering Pearl: Hong Kong at the Crossroads, (1989)].
By the turn of the 21st century JM Co had regained ground from a successful drive into Southeast Asia markets and had once again firmly secured a beachhead on mainland China [‘A tale of two hongs’, The Economist, 30-Jun-2007, www.theeconomist.com ; ‘Jardine Matheson Returns to China’, The Economist, 02-Jul-2015, www.theeconomist.com].
Postscript: Tension between government and the merchant class
Officially, Hong Kong was run during the British era by a succession of governors, appointed from Whitehall. However a fundamental difference in raison d’être existed between the governors and the taipans. The governors were about the Imperial interest of Britain, in practical terms they sought to raise sufficient revenue to fund the colony’s administration. The sole concern of the plutocrats, the merchants, was self-enrichment and their natural inclination was to resist all efforts of the governor to raise taxes…this made for a generally very rocky relationship between the Crown Colony’s two power blocks with antithetical interests (Morris).
Endnote: Hongs and taipans
The term ‘hong’ (major foreign trading houses based in Hong Kong to trade with China) derives apparently from the Chinese word cohong, used to describe the guilds of Chinese merchants operating Canton’s trade with the West prior to 1842 (the “Thirteen Factories” or Canton System). In British Hong Kong each hong was headed up by a taipan (or series of taipans) who was the top boss man in the trading company. The hongs employed native (Chinese) personnel, called compradors, who acted as local “go-betweens” to facilitate business for the firms.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
✱ “the Butterfield” in the partnership didn’t last long in Hong Kong with the autocratic Swire edging him into retirement within a short time
☒ both trading houses adopted Chinese business names: Ewo (JM Co) means ” State of happy harmony”; Taikoo (Swire) means “Great and ancient”
⇟ China already held a long-lingering grudge against JM Co … company principal William Jardine was one of the main advocates for Britain to take action against the Chinese Empire in retaliation for it closing down the lucrative opium trafficking trade (leading to the First Opium War)
Business-savvy Harvey sensed there was a gap in the market and in 1876 he clinched a deal with the Atchison, Topeka and Santa Fe Railroad (AT&SF)
(Photo: 
Aldi’s control of it’s “own brand”—which makes up a whopping 90 to 95% of what it sells—is interesting. First there’s the design, it deliberately makes the packaging on its food items look much the same as the leading manufacturers’ equivalent brands. Next, it tries to replicate the taste of these popular brands. Then Aldi invents a brand name for the product which often sounds vaguely like the well-known brand. And it apparently works – even on luxury items. To take a UK example: Many British consumers who once shopped at the upmarket Sainsbury’s and Waitrose supermarkets have been enticed by Aldi’s “Specially-Selected” luxury items – and the reason is twofold, obviously price (much cheaper than Sainsbury’s), but also because they now feel they are getting a similar-quality product (retail expert Julie McColl, Glasgow Caledonian University). As well as a recent product expansion to include luxury treats for it’s shoppers, Aldi’s move into ‘fresh’, the fruit and veg lines, has broadened it’s appeal.
Another key to Aldi being so spectacularly successfully in the supermarket game is it’s relationship to suppliers. Because of their runaway retail success they have many primary producers and manufacturers lining up to do business with them, but Aldi is well-known for driving a hard bargain with suppliers (sort of a case of “my way or the highway”). They are also clever at judging what will be efficacious – by sourcing local suppliers and advertising in the UK they have softened the German outsider element and fostered an impression among British shoppers of the big discount ‘invader’ being home-based.
The above factors, outlined, are apparently the ‘secrets’ to Aldi’s stellar success and it’s ability to offer and maintain retail prices at rock bottom in markets across the world. In part II I will tell the story of Aldi’s rise from a single grocer’s store in provincial Germany to international retail empire, and of the two publicity-shy and increasingly reclusive brothers who spearheaded the company’s seemingly unstoppable growth and expansion.