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China 2015: TOP PERFORMERS | Brand Value Growth

Market responsiveness, rather than size or government support, today drives brand value growth in China, as reflected in the BrandZTM ranking of brands according to year-on-year value growth.

Of the Top 10 in brand value growth, eight are market driven- brands. And both SOEs (State Owned Enterprises) are classified as Competitive SOEs. These brands are more responsive to market forces than Strategic SOEs, such as banks, oil and gas companies or telecoms, which act in part as agents of government policy.

Almost doubling in value, with a 95 percent increase in brand value, Tencent leads the list of the fastest rising brands. This performance is particularly impressive because it follows several years of strong value gains. The Internet portal acquired new search, social media and gaming businesses.
It continued to benefit from the popularity of WeChat, the messaging and sharing application.

Technology and education are the most represented categories, with two brands each. Technology and education are expanding categories that help propel brand growth, which is not the case for all of the other six categories represented: alcohol, cars, hotels, jewellery retail, food and dairy and travel agencies. 

There are examples of fast-rising brands that have excelled in challenging categories, however, indicating the potential of a strong brand to outperform its category. Perhaps the best example is Pearl River, a beer that increased 48 percent in brand value, while the alcohol category declined 22 percent in overall brand value as consumption slowed. Pearl River focused on expanding geographically and establishing its premium beer credentials.

And although the brand value of the hotels category remained flat, Hanting grew 45 percent in brand value. Hanting continued its rapid roll out of locations and gained 90 percent of its bookings from its loyalty program members.

In food and dairy, a category still recovering from food safety breaches of a few years ago, Mengniu, which rose 57 percent in brand value, emphasized a new focus on food that’s healthy and nutritious.

It’s difficult to reduce the success of all brand value growth leaders to one common theme or shared attribute, but many brands attempted to better understand their customers and meet their changing needs.

Xueersi and New Oriental, which grew 64 percent and 56 percent, respectively, in brand value, are in the education category, which itself appreciated 57 percent in brand value, mostly on the strength of these brands and their agility in understanding consumer desire for education. Xueersi added physical locations and grew its online business. Enrollment surpassed one million for the first time. New Oriental launched an online education joint venture with Tencent.

Certain brands, such Ctrip and BYD, the number two and three in the brand value growth ranking, helped drive the overall brand value growth of their categories. Ctrip entered into several important strategic partnerships and reached the point where it transacted 80 percent of sales online or by mobile. A leader in the production and marketing of electric and hybrid vehicles, BYD benefited from government policies that encouraged the purchase of energy efficient cars.