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Brands are becoming stronger and more important in China

The 2013 edition marks the third year that we’ve published this definitive study of brand valuations, analysis and insights. The results again illustrate that brands are becoming stronger and more important in China, and strong brands create financial strength.

Some examples:

  • The China Top 50 grew in stock market value by 5.8 percent between July 2010 and September 2012, while the stocks in MSCI index of Chinese stocks fell by 5.6 percent.
  • Chinese brand builders are increasingly active overseas across many categories and including both State Own Enterprises (SOEs) and market-driven organizations, like Lenovo, which has become the world’s largest PC brand.
  • These market-driven brands now comprise 27 percent of the China Top 50, up from 22 percent in 2011. As the study also documents, achieving and sustaining brand strength in China is challenging David Roth CEO, The Store WPP Europe, Middle East, Africa (EMEA) and Asia Welcome and complicated. Like winning at the ancient game of Chinese chess, brand strength requires understanding and evaluating all the possible moves, developing thoughtful strategies, and maneuvering with purpose and determination.

Brand strength is key to sustained commercial success, as this year’s survey demonstrates. For the first time since we first published this study in 2011, The China Top 50 declined in brand value. The decrease, a relatively minimal 1.6 percent, is attributed mostly to the slower growth rate of China’s economy.

In contrast, the Brand Contribution level of the China Top 50 increased. Brand Contribution is the portion of brand value that depends solely on brand, stripping away other factors, like financial performance. The rise in Brand Contribution helped mitigate the decline in brand value caused by economic forces.

Even as China’s economic growth rate slows, it will continue to outpace the rates of other countries. But a somewhat slower economy will accelerate an ongoing shift in consumer attitude. As people become more discriminating about their purchases, they’ll increasingly look to brands for assurances of quality and safety. Building strong and meaningfully differentiated brands, always a wise investment, is crucial in this kind of changing market environment.

The study examines many of the key issues shaping China’s most valuable brands and the Chinese market. We begin the study with highlights of the extensive data and analysis that’s presented in four sections: Part 1. Trends and Insights; Part 2. The Top 50 Results and Analysis, including the ranking of the 2013 China Top 50 according to their valuation results, and profiles of each of the Top 50 brands; Part 3. Best Practices for Building Brands and Part 4. Resources.

WPP’s Millward Brown Optimor conducted the brand valuations based on BrandZ™ Brand valuation methodology. BrandZ™ is the world’s largest and most reliable and comprehensive brand analytics and equity database. It’s available exclusively to WPP companies. Many other WPP companies contributed specialized expertise.

WPP companies that provided commentaries on relevant topics include: CIC, CTR, Grey, Millward Brown, MEC, Ogilvy & Mather, and Wunderman. These other WPP companies also generously contributed analysis and insights that appear throughout the report: AKQA, Burson-Marsteller, Kantar, Kantar Retail, Hill+Knowlton Strategies, Maxus, Mediacom, Mindshare, Ogilvy One, Oracle Added Value, Y&R and Landor. I also want to acknowledge the accounting firm Grant Thornton for its viewpoint about the connection between high brand value and a strong balance sheet.

“The Top 50 Most Valuable Chinese Brands” is part of our rapidly growing library of WPP BrandZ™ reports about brand valuations and the insights and strategies required for building and sustaining valuable brands. These reports also include: the annual “BrandZ™ Top 100 Most Valuable Global Brands,” “BrandZ™ Top 50 Most Valuable Latin American Brands,” “The Chinese New Year in Next Growth Cities,” and “The Chinese Golden Weeks in Fast Growth Cities.”

Like all these excellent reports, “BrandZ™ The 50 Most Valuable Chinese Brands 2013“ offers just a glimpse of insightful and useful market knowledge produced by our combined WPP capabilities in China. Located in Beijing, Shanghai, Guangzhou and many other cities and provinces, WPP companies—with all our significant resources, including over 14,000 employees in Greater China—are here to help you gain competitive advantage. We offer insights, advertising, digital, PR, promotion, marketing, media, retail and shopper marketing—the knowledge and implementation necessary to understand China and build and sustain brand value.

To learn more about how to apply this expertise to benefit your brand, please contact any of the WPP companies that contributed to this report. Turn to page 172 for summaries of each company and the contact details of key executives. Or feel free to contact me directly. Sincerely,

David Roth