59% five-year growth outpaces BrandZTM Global Top 100
This is the fifth anniversary edition of our BrandZTM report on the most valuable Chinese brands. In just five years our BrandZTM report has become the definitive annual resource for the understanding Chinese brands and the dynamics that drive value growth.
We began this project with a ranking of the Top 50 most valuable Chinese Brands and expanded to 100 brands last year to more fully examine the rapid emergence of China’s valuable brands across 21 categories of products and services.
Identifying and ranking the most valuable brands was only the start of the process. We then analyzed the creation of brand value in China, uncovering the drivers that can help brand owners – both Chinese and western – build valuable brands in a rapidly changing China.
The development of valuable brands in China – and the future expansion of these brands onto the world stage – is interconnected with China’s explosive growth during the past 35 years, the emergence of a prosperous middle class and the economic rebalance from production to consumption. Consider just of few this year’s highlights:
- Brand value increased 22 percent year-on-year, surpassing the growth of the BrandZTM Top 100 Most Valuable Global Brands and the most valuable brands of Brazil and Latam.
- The Internet portal Tencent doubled in brand value and claimed the number one position in the BrandZTM China Top 100, displacing China Mobile, which has held the top spot until now.
- Alibaba, the ecommerce giant, appeared in the BrandZTM China Top 100 for the first time – at number two – after its IPO (Initial Public Offering), which raised a record $25 billion and introduced the power of Chinese brands to the public worldwide.
Several consequential trends influence these impressive developments. Over the past five years, the growth of the BrandZTM China Top 50 has increased 59 percent. And during that period, brand value growth has shifted sharply from the SOEs (State Owned Enterprises) to market- driven brands.
Between July 2010 and October 2014, a BrandZTM stock portfolio, comprised of valuable brands with high brand contribution – a BrandZTM measure of brand strength – increased 85 percent in value compared with the MSCI, a weighted index of Chinese stocks, which grew only 4 percent.
In other words, your $100 invested in a BrandZTM stock portfolio comprised of valuable brands with high brand contribution would be worth $185 today. Invested in the MSCI, your $100 would be worth only $104. Clearly, the investments made to create valuable brands deliver superior shareholder returns.
These developments are important for anyone building brands in China for several reasons: (1) The market is open to more competitive activity; (2) Consumers are more receptive to brands; (3) Brand building is more critical than ever; and (4) The ROI for building meaningfully different brands comes in revenue, profit and stock market appreciation.
And as Chinese brands rapidly understand and create brand value, they increasingly aspire to international and global stature and look abroad for brand acquisition, collaboration and investment opportunities.
In summarizing the strategic framework for why the opportunity to build valuable brands in China is enormous
and expanding, I’ve just touched the surface. This report adds to the framework and provides the market research and analysis that form its foundation. Brand experts from around 20 WPP operating companies in China contributed insights and thought leadership and brand building essays
that provide deeper strategic understanding and tactical advice for implementation.
At WPP, the global communications services leader, our companies have been engaged in China for over 30 years. Today, almost 15,000 people, including associates, work across China in Beijing, Shanghai, Guangzhou and
many other cities. We provide advertising, marketing, insight, data management, media, digital, shopper marketing and PR expertise. It’s part of our global presence in 111 countries.
By linking all this talent, creativity, wisdom, and horizontality, we amplify global trends and insights that help our clients in useful and unique ways. We invite you to access our unrivaled BrandZ resource library. Along with the BrandZTM Top 100 Most Valuable Chinese Brands, the library includes these titles: the BrandZTM Top 100 Most Valuable Global Brands; the BrandZTM Top 50 Most Valuable Indian Brands; and the BrandZTM Top 50 Most Valuable Latin American Brands.
You’ll also find insights about the Chinese market in these BrandZ reports: The Power and Potential of the Chinese Dream; The Chinese New Year in Next Growth Cities; and The Chinese Golden Weeks in Fast Growth Cities. To download these and other BrandZ reports, please visit www.brandz.com. For the interactive BrandZTM mobile apps go to www.brandz.com/mobile.
The backbone of all this intelligence remains the WPP proprietary BrandZTM, the world’s largest, customer-focused source of brand equity knowledge and insight, and the BrandZTM brand valuation methodology of Millward Brown, a WPP company. First we analyze relevant corporate financial data and strip away everything that doesn’t pertain to the branded business. Then we take a critical step that makes BrandZ unique and definitive among brand valuation methodologies.
We conduct ongoing, in-depth quantitative consumer research with more than 170,000 consumers annually, across more than 30 countries, to assess consumer attitudes about, and relationships with, over 10,000 brands. Our database includes information from over two million consumers. It reveals the power of the brand in the mind of the consumer that creates predisposition to buy and, most importantly, validates a positive correlation with better sales performance.
At WPP, we’re passionate about using our creativity to create and build strong, differentiated brands that deliver lasting shareholder value. To learn more about how to apply our experience and expertise to benefit your brand, please contact any of the WPP companies that contributed expertise to this report. Turn to the resource section at the end of this report for summaries of each company and the contact details of key executives. Or feel free to contact me directly.
CEO, The Store WPP EMEA and Asia