The total value of the BrandZ™ Top 100 Most Valuable Chinese Brands has risen 13% to $525.6bn in the last year despite China’s slowing economic growth, according to the sixth annual ranking announced today by WPP and Millward Brown.
Tencent remains China’s most valuable brand, growing its brand value 24% to $82.1bn. For the first time ever, market-driven brands – those that are owned by entrepreneurial companies – contribute more than half (51%) of the value of the China Top 100.
The highest new entries are telecoms brand Huawei (no.7; $18.5bn) and online retailer JD.com (no.15; $9.4bn).
The BrandZ research also shows that Chinese brands are now as competitive as multinationals. They
score more highly on two of the key factors that create competitive advantage – building brand
awareness, and connecting with consumers on both a functional and emotional level – but lag behind on differentiation.
BrandZ Top 20 Chinese Brands 2016
Key trends highlights
Brands that are innovative and unique grow eight times faster than their rivals. Ranking the Top 100 by innovation, the top third most innovative brands grew 29% between 2014-2016 compared with 3% for the least innovative. The top third most unique brands grew 29%, compared with 3% for the least unique.
Brand strength drives share appreciation, despite market fluctuations. In January 2016 the stock market performance of the MSCI China index was down 10.7% on its 2010 level, while the share prices of the brands in the BrandZ™ Top 100 had gone up 43.1% over the same period.
Fast-growth categories reflect consumer optimism. Personal care (+61%) and jewellery retail (+61%) were the fastest-growing categories in terms of brand value, followed by real estate, insurance, airlines and travel agencies. This is evidence that consumers are still spending on nonessentials, luxuries and big-ticket items. They are also spending more on products relating to personal care and health.
Banks no longer dominate. Whereas two years ago banks accounted for 30% of the total brand value of the Top 100 they now contribute less than a fifth. Along with the rest of the public sector, banking has been highly impacted as the Chinese economy is increasingly driven by consumer goods and services. The success of entrepreneurial payment and financing options such as Alipay
and Ant Finance, both owned by Alibaba, is also threatening the role of traditional banks in China.
The rise of technology brands. Technology brands account for 27% of the total value of the Top 100, up from 16% just two years ago, and their growth has boosted the strength of the market-driven brands. Three tech brands also top the ranking of brands that generate the highest proportion of their revenue from overseas: Lenovo (68%), Huawei (62%) and ZTE (50%).
Brands must leverage mobile to engage consumers and help them realize the Chinese Dream. Mobile is more important in China than anywhere else: 90% of internet users access the web using a mobile device (CIIIC). The highest performing brands all have a strong mobile presence, not simply as purveyors of products and services, but as partners that help consumers make a better life for themselves and their families. The mobile experience needs to represent the brand in all its aspects: advertising and marketing, social communication, shopping, purchasing, and payment.
Letv and NetEase are the fastest-growing brands. Two tech brands, content provider Letv (no.32) and gaming platform NetEase (no.40), were the highest risers increasing in value by 81% and 73% respectively. Both have profited from creating ‘smart connected businesses’ – using their platforms to offer new products and services that integrate them more deeply into people’s daily lives.