The 2014 WPP BrandZ Top 100 Most Valuable Chinese Brands study shows that China is increasingly a consumer-driven market amid the government’s increased emphasis on rebalancing the domestic economy. Market-driven brands (private companies without government backing) in the Top 50 of the ranking enjoyed value growth of 27 percent – three times that of state-owned enterprises (SOEs) at 9 percent.
This is the first year the study has been expanded from 50 to 100 brands. A year-on-year comparison of the Top 50 shows an increase in total value of 13 percent in 2014 compared to last year, when it dropped 1.6 percent. China Mobile continues to be the nation’s most valuable brand, retaining the No.1 spot for the fourth year running with a value of US$61.4 billion, up 21 percent on 2013.
Technology, last year’s highest growing category, continues to rise in brand value – this year technology brands increased their value 28 percent overall. Tencent (US$33.9 billion) rose two positions to No.3 after growing its value 68 percent, and is the leading market-driven brand.
Brand value increased in 11 categories, including technology: financial institutions (7%), airlines (9%), oil and gas (8%), insurance (11%), telecom providers (17%), apparel (21%), home appliances (36%), food and dairy (62%), health care (67%) and travel agency (98%).
The alcohol category declined 6 percent in value overall as baijiu and wine brands felt the impact of the reduction in government spending on entertaining, and faced fierce competition from foreign brands.
An expansion of the ranking from 50 to 100 brands has seen brands in eight new categories enter the ranking this year: cars, catering, education, furniture, hotels, jewelry retailers, personal care and real estate. This reflects consumers’ increasing purchasing power and changing shopping habits – they are spending more on leisure activities and taking care of themselves, while continuing to aspire to own a car and a home.
Among the Top 50 brands in the ranking, 12 feature for the first time: China Minsheng Bank; Vanke, Poly Real Estate, Evergrande Real Estate and Country Garden (real estate); PICC and New China Life (insurance);Yanghe and Lu Zhou Lao Jiao (alcohol), Belle (apparel), NetEase and 360 (technology). BYD (cars) made a comeback at No.49 having dropped out of last year’s ranking.
Health care brand CR Sanjiu (No.48) is the joint biggest riser with a brand value increase of 86 percent (US$841 million), driven in part by Chinese consumers’ growing attention to personal wellbeing. The third highest riser Yunnan Baiyao (up 72 percent, to US$3 billion) also benefited from this trend.
Dairy brand Yili grew 86 percent (US$5.1 billion), making it the other top riser in the ranking and China’s 15th most valuable brand, due in part to rebuilding consumer trust with its ‘open factory’ campaign, which allowed the public and the media to see the production process. Mengniu turned a 31 percent decrease in 2013 into a rise of 30 percent in this year’s ranking (US$3.1 billion) with the same strategy. Tencent (US$33.9 billion) was the fourth top riser with value growth of 68 percent, followed by Shuanghui (US$2.7 billion), up 60 percent.
Bucking the downward trend in the alcohol category, beer brands Tsingtao Beer, Snow Beer and Harbin Beerall achieved double-digit value growth thanks to creative interactions with consumers. Travel service provider Ctrip boosted its value 47 percent after a 39 percent decline last year, having continuously innovated to stand out from the competition with developments including a new mobile hotel booking app.
While SOEs contribute 71 percent of the total value of the Top 100, a direct comparison of the Top 50 shows that market-driven brands are enjoying faster growth – 27 percent compared with SOEs’ 9 percent. Brand contribution is stronger for market-driven brands than SOEs, indicating they have huge potential for development. Young brands – those that have been operating for 20 years or less – contribute to nearly 50 percent of the total value of the Top 100.
Chinese brands lag behind foreign competitors on meaningful difference. While consumers bonded with Chinese brands on the basis of their price and ‘fame’, they find foreign brands stronger on meaningful difference – a key ingredient in a strong brand, which stimulates consumer loyalty and value growth. This shows where Chinese brands need to focus to better compete against foreign brands.
Globalization continues. The Chinese brands that get the highest proportion of their revenue from overseas markets are Lenovo (57%), Air China (34%) and China Eastern Airlines (33%). Global consumers are more likely to buy from Chinese brands in the computer, technology or home appliance categories.
Table 1. The top 20 Chinese brands 2014
|Rank 2013||Brand||Category||Brand value 2014 ($M)||Brand value change 2014 vs 2013 (%)||Rank change||Ownership|
|1||ChinaMobile||Telecom providers||61,399||21%||Strategic SOE|
|2||ICBC||Financial institutions||39,658||-2%||Strategic SOE|
|4||China Construction Bank||Financial institutions||25,510||6%||-1||Strategic SOE|
|6||Agricultural Bank of China||Financial institutions||19,318||12%||Strategic SOE|
|7||Bank of China||Financial institutions||13,636||0%||1||Strategic SOE|
|8||PetroChina||Oil & gas||13,433||12%||3||Strategic SOE|
|9||Sinopec||Oil & gas||13,133||5%||1||Strategic SOE|
|10||China Life||Insurance||12,702||-12%||-3||Strategic SOE|
|11||Ping An||Insurance||11,128||5%||1||Market Driven|
|13||China Telecom||Telecom providers||8,168||-5%||Strategic SOE|
|14||China Merchants Bank||Financial institutions||6,785||0%||Strategic SOE|
|15||Yili||Food and dairy||5,068||86%||6||Market Driven|
|16||Bank of Communications||Financial institutions||4,906||-1%||-1||Strategic SOE|
|17||China Unicom||Telecom providers||4,404||6%||-1||Strategic SOE|
|18||Air China||Airlines||3,653||12%||Strategic SOE|
|19||China Minsheng Bank||Financial institutions||3,416||new||new||Market Driven|