Brand contribution measures the impact of brand alone, without financials or other factors, in the mind of the consumer. A high brand contribution score – on a scale of one to five, five being the highest – suggests that a brand is resilient and likely to produce strong future earnings.
Market-driven brands dominate the Top 20 Brand Contribution ranking, with 13 entries. Of the seven SOEs (State Owned Enterprises) ranked, five are Competitive SOEs, state owned enterprises in consumer-facing categories where a strong brand is critical for sustained success.
Even the two ranked Strategic SOEs, China Mobile and China Telecom, are consumer facing. Strategic SOEs, like banks or oil and gas giants, are typically tasked with implementing government policy.
The Top 20 brand contribution leaders come from 11 different categories and from throughout the BrandZTM China Top 100 ranking, from number one, Tencent, the Internet portal, to number 87, Supor, a home appliance brand, suggesting that high brand contribution is possible regardless of category or brand size.
In fact, brands that appear lower in value in the BrandZTM China Top 100 generally score higher in brand contribution. That’s because market-driven brands dominate in the lower ranks, and these brands, compared with the giant Strategic SOEs, depend more on the power of their brands in the marketplace. And they derive more of their brand value from that power, which is an indicator of future growth potential.
Food and dairy and technology are the most represented categories with four brands each. Food and dairy includes three competitive SOE brands, Mengniu, Fortune and Bright, and Yili, which is a market-driven brand. Brand contribution may have been among the factors that helped sustain these brands even as the category lost public confidence after a series of food safety breaches several years ago.
The technology brands – Letv, Baidu, Sina and Tencent – are each market driven. Letv,
which ranks highest in brand contribution, is a streaming video site that’s constantly in front of consumers. Similarly, Baidu is China’s leading search engine, Sina operates the popular Weibo social networking platform and Tencent, China’s most valuable brand, is its ubiquitous Internet portal, a kind of combination of Facebook and Google.