Top 10 Risers
Each brand rises over 50% in value
Brands align with trends shaping Chinese society
In a year of unusual pressure on growth, with slower economic expansion, China-US trade tensions, and the lockdown to control the spread of the COVID-19 pandemic, each of the Top 10 Risers, brands that increased most in value year-on-year, rose over 50 percent in value and two brands more than doubled in value.
The education category was most represented, with three brands, followed by alcohol with two brands. One brand came from each of these categories: consumer finance, technology, real estate, apparel, and home appliances.
Across these diverse categories the key factor driving the strong value growth were the strength of the individual brands and their alignment with some of the major trends shaping Chinese society, including the desire for self-improvement, concern with health and wellness, urbanization, and premiumization.
With a value increase of 120 percent, the education brand Xueeri led the Top Risers. Xueersi and the education brand New Oriental, which rose 78 percent, operate physical locations throughout China. Having and invested heavily to strengthen their online presence, the brands experienced a demand spike during the lockdown period and expanded their reach people at home, often in lower tier markets, sometimes offering free lessons.
The third education brand, VIPKID, rose 67 percent in value, having finished another successful round of funding to expand its reach as an education brand that connects English-speaking teachers, primarily from North America, with students worldwide, including around 700,000 in China. VIPKID was also among the brands that offered free lessons during the pandemic, increasing awareness of online learning.
Two of the Top 10 Risers are brands of baijiu, the traditional alcohol that Chinese often serve when entertaining and rely on for prestigious gifting. Wu Liang Ye rose 116 percent, National Cellar 1573, 68 percent. Some baijiu brands promoted baijiu consumption for more occasions and expanded their distribution channels to raise demand among China’s middle class. The brands enjoyed significant stock market appreciation.
Formed as a peer-to-peer lender by Ping An, the financial services giant, Lufax was well positioned to expand after the government regulations favored expanding the consumer finance sector to stimulate more spending and drive consumption.
ZTE, China’s second-largest telecom equipment maker, rebounded after the US government lifted sanctions that prohibited the brand from buying components from American companies. The US contemplated additional sanctions. Meanwhile, China Mobile selected ZTE to supply almost 30 percent of the roughly 300,000 5G base stations is plans to install this year.
Supor, which specializes in small home appliances, increased 53 percent in value. The brand benefited from its strong positioning in China’s fast- growing lower tier markets. Cooking at home drove interest in small appliances during the pandemic lockdown.
Athleisure apparel brand Anta connected with the consumer interest in health and wellness and the Chinese government’s promotion of sports as a way to develop world-class Chinese athletes. It acquired the Finnish-owned Amer Sports and planned to leverage its extensive store network to distribute new brands, including Wilson tennis rackets and Salomon ski boots. Despite store closings during the pandemic lockdown, Anta increased 56 percent in value.