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China 2014: Category Updates

Category Value Change 2014 vs. 2013

The BrandZ™ Top 100 Most Valuable Chinese Brands 2014 ranked bands in 21 categories, with eight new categories added to the report.

Of the categories with comparable year-on-year data, all but two—alcohol and consumer electronics in brand value, in sharp contrast to last year when only three categories improved. This general rebound suggests that, although the overall rate of China’s economic expansion slowed, growth continued and was distributed across many sectors as consumers enjoyed increasing choice of products, services and brands.

The new categories—cars, catering, education, furniture, hotels, jewelry retail, personal care and real estate—together form a picture of emerging opportunities in a rebalancing China. These categories may exceed the overall economy in growth rate during the next few years.


Most categories rise in value

The health care category rose?in value because of actions that brands took to meet the needs?of China’s aging population and?to accommodate the increasing consumer concern with personal well-being. The rise also reflects a rebound in a category that declined in value in the 2013 ranking.

Similarly, brand value appreciation for the food and dairy category indicates both a category rebound and brand initiatives— acquisitions, partnerships and marketing campaigns—to improve food quality, variety and safety. The category experienced some consolidation as the Chinese brands sought greater scale for competition with international brands both at home and abroad.

The growth of technology reflects the strong presence of Chinese brands in the category, and the rapid uptake of mobile among Chinese consumers.


Two decliners and some exceptions

The declining categories—alcohol and consumer electronics reflect sharp changes in Chinese society. Sales of baijiu, the traditional Chinese alcohol, declined because the government’s opposition to extravagant spending. The government policy also affected wine sales, which in addition felt the impact of imported brands and reports of harmful chemicals in some products.

The problems encountered by home electronics are not specific to China, but rather indicate the competitive pressures on an industry reacting to profit margin erosion and e-commerce disruption of bricks and mortar distribution.

The apparel category is?unusual because its brand?value appreciated despite a?sharp dichotomy between sub- categories. Fashion brands, such?as women’s shoes, gained in?brand value. However, sportswear declined because of slow demand and problems with excess inventory and overstoring. The business casual sector also felt pressure.

Most, but not all of the categories in the BrandZ™ Top 100 Most Valuable Chinese Brands 2014?are comparable year-on-year. However, the report combines baijiu, the traditional Chinese white liquor, beer and wine into a single category, alcohol. And the 2014 report eliminates e-commerce as a separate category.

In addition, the travel agency and consumer electronics categories are included to provide useful information, but with the caveat that only a limited number of brands from those categories are included in the BrandZ™ Top 100 Most Valuable Chinese Brands 2014.