In 1930s, Tawau prospered rapidly due largely to its agricultural potential. The inhabitant population rose to 1800 in 1931. There were two large plantations, the Kuhara Estate of rubber and manila hemp and Kubota Estate of coconut. The First World War (1914-1918) did not directly affect Tawau, which had, however, its share of the world slump. Sandakan was the permanent seat of the Government and the center of commerce; Tawau was small but a prosperous town.

By the end of 1930s, there were about 60 shophouses, all timber-built, lined the two main streets of Tawau, Dunlop Street (named after A.R. Dunlop who was a district officer) and Man Cheong Street (now part of Dunlop Street). Man Cheong was a popular coffee shop. It still operates at Dunlop Street. The Dunlop Street was so close to the shore that the shops on one side backed out over the high water mark. Most shops were owned by Chinese. They sold foodstuffs and equipment in small holding. There were some coffee shops and lodging houses too.