The total brand value grows a record 30% to US$889.7 billion. Alibaba has been crowned the most valuable brand in China for the first time in the annual BrandZ™ Top 100 Most Valuable Chinese Brands ranking, published by WPP and Kantar in Beijing, having grown its brand value by 59% year-on-year to US$141 billion.
Despite China’s slower economic growth and international trade tensions, the total value of the BrandZ Top 100 Most Valuable Chinese Brands increased 30% to US$889.7 billion, the highest annual rise since the ranking launched in the year 2011.
The growth has been fuelled by brands accelerating their expansion into China’s lower-tier cities, which have seen rapid development and rising consumer buying power, and increasingly positive attitudes to Chinese consumer brands with a global presence.
Thirteen of the 24 categories increased in value, with entertainment seeing the largest year-on-year growth of 186%, followed by Education (57%) and Retail (55%).
Technology accounted for more brands than any other categories in the Top 100 (11), contributing 26% of the ranking’s total value and dominating the top 10 leaders in terms of Overseas Presence with six brands – double the number of last year.
These include telecom and smartphone giant Huawei (No.6, US$33.2 billion), smartphone maker Xiaomi (No.11, US$20.6 billion), Lenovo (No.47, US$2.9 billion), the world’s largest drone-maker DJI (No.50, US$2.8 billion), ZTE (No.72, US$1.2 billion) and robot company UBTECH (No.85, US$910 million).
The study, expanded in 2019 to include four new categories – consumer finance, entertainment, lifestyle platforms and transport – reveals how the digitization and sophistication of Chinese consumers are creating a unique marketplace of products and services available with unprecedented speed and convenience.
Innovators in AI, e-commerce, New Retail, and social media perform strongly. The fastest rising brands are video streamers iQiyi (No.28, US$5.6 billion) and Youku (No.31, US$5.0 billion), up 158% and 136% in value respectively.
For the first time, the ranking also incorporates unicorn brands based on their most recent valuations publicly available to reflect the dynamism of the Chinese market and the impact of these brands.
Xiaomi, services booking app Meituan (No.13, US$19.9 billion), food delivery app Ele.me (No.24, US$7.3 billion) and consumer finance brand Lufax (No.26, US$6.9 billion), which specialises in peer-to-peer lending, are the most valuable brands among a record number of 17 newcomers to the ranking this year.
Their success, according to BrandZ, has been driven by a mobile-centric, convenience-driven Chinese lifestyle.
The Top 10 BrandZ™ China Top 100 Most Valuable Chinese Brands
|Rank 2019||Brand||Category||Brand value 2019 (US$M)||% Change vs 2018|
|4||China Mobile||Telecom Providers||39,103||-21%|
|9||China Construction Bank||Banks||22,841||14%|
There is vast potential for further brand growth overseas as China moves beyond the industrial focus of its Belt and Road initiative towards establishing leadership in areas including AI, robotics, Internet of Things (IoT) and green energy.
One such business is Home Appliances and IoT brand Haier, ranked 15th in the Top 100 with a brand value of US$16.3 billion.
The report also shows the investments brands make to build value are measurably rewarded in the stock market. The BrandZ China Top 100 stock portfolio, comprising the same 100 brands, has outperformed the MSCI China Index by almost four times, growing 111% since July 2010 vs. 28%.
David Roth, WPP, says:
China’s stock market volatility over the past year has provided a real-life stress test for valuable brands, which continued to outperform the market.
Put simply, valuable brands deliver superior shareholder returns. US$100 invested in the MSCI China Index in 2010 would be worth around US$128 today. That US$100 invested in the BrandZ™ China Top 100 would now be worth US$211.
The threshold to enter the BrandZ China Top 100 has more than doubled from US$311 million in 2018 to US$681 million in 2019, demonstrating the continued pace of growth for Chinese brands increasingly recognized as leading the way in innovation. Against a backdrop of heightened competition and disruption, building stronger brands is what it takes to stay in the game.
Alibaba’s brand value has grown 136% over the past five years in BrandZ’s Top 100 Most Valuable Chinese Brands, outperforming the Top 100 overall which increased 92% over the same period.
Since first appearing in the ranking in 2015 following its IPO, Alibaba’s rise to the number one spot in 2019 reflects the growth of a brand which has contributed to transformational changes in the Chinese market.
In BrandZ’s “Brand Power” metric of brand equity, Alibaba scored particularly strongly for being “Meaningful”, suggesting the brand is known for coining the term “New Retail” has successfully created closer connections with its consumers.
The Brand Power metric also looks at how brands perform in being Different (distinctive), and Salient (coming to mind at the moment of consideration). While Chinese brands generally score well for being Meaningful and Salient, they do not perform as well in being viewed as truly distinctive from the competition or as trendsetters.
Doreen Wang, Global Head of BrandZ at Kantar, adds: “Whether going abroad or expanding domestically, the potential for brand growth is huge for China’s most valuable brands.
But realizing it requires the knowledge and expertise needed to surmount new challenges. This report highlights the importance of Chinese brands to build a difference in the domestic and global marketplace.”
The BrandZ™ Top 100 Most Valuable Chinese Brands report is based on a deep understanding of what motivates consumers, how to fulfill their expectations and how to build powerful and valuable brands that consumers and investors love.
BrandZ’s top-five 2019 takeaways for building valuable brands in China:
- Build difference – As the China market becomes even more competitive the importance of Difference increases
- Go deep – China is growing fastest in lower-tier cities; relying on insights gained from competing in coastal metropolises can help – but can also create misunderstanding
- Refine the brand experience – Standing out from sameness requires delivering a memorable brand experience by personalizing one or more aspects of the brand
- Be intelligent – To produce the extreme convenience lifestyle favored by Chinese consumers, the path to success involves a combination of human and artificial intelligence
- Build a powerful brand – At the point of sale – physical or online – a powerful brand enjoys an important edge against all other brands trying to convert consumers to customers.