Education brand Xueersi leads, with 139 rise
Brand strength and market forces drove exceptionally strong valuation growth in the BrandZ™ Top 100 Most Valuable Chinese Brands, as illustrated by the performance of the Top 20 Risers, the brands that appreciated the most in value year-on-year. The No. 1 Top Riser, the education brand Xueersi, increased in value 139 percent.
Xueersi also led the Top Risers a year ago, with a value rise of 58 percent, a strong result but less than half of its percentage increase this year. A year ago, Xueersi was the only Top 20 Riser whose value increased more than 50 percent. This year half of the Top 20 Risers increased by more than 50 percent, and the other half increased by 36-to-49 percent.
Top riser value growth was distributed across 10 categories. Home appliances was most represented category, with five brands, followed by alcohol with three brands, and education, technology, retail, and hotels with two brands each. One brand appeared from real estate, cars, insurance, and travel.
The fastest-rising home appliance brand is Gree, which rose 78 percent in value, in part because China’s unusually hot summer created business for the nation’s largest air conditioner maker. The other appliance Top Risers are: Vatti, up 54 percent; Robam, 49 percent; Midea, 40 percent; and Supor, 39 percent.
Brands of Baijiu, China’s traditional clear liquor, exceeded the impressive 36 percent growth of the alcohol category overall. Wu Liang Ye, the No. 2 Top Riser, increased 92 percent in brand value. Baijiu brands have been rebounding steadily from the impact of government restrictions on lavish entertainments.
The three Baijiu brands in this year’s Top 20 Risers—Wu Liang Ye, Luzhou Laojiao, and Moutai—also appeared in last year’s Top Riser ranking. Several factors, including a consumer shift to premium drinks, accelerated growth. After a strong revenue rise and stock market performance, Moutai became the world’s most valuable liquor company in market capitalization, ahead of Diageo.
The strength of the education category, with both Xueersi and New Oriental again among the Top Risers, reflects the priorities of Chinese society: the determination to succeed; and the commitment of Chinese parents to provide their children with the tools necessary for success. The education brands mostly focus on the rote learning required to advance in China’s test-driven education system, or to score high on the testing for study abroad. However, Xueersi enriched its curriculum with a program for developing critical thinking ability. And the education brands expanded access with more online courses.
In the technology category, iQiyi, a streaming video site owned by Baidu, appeared in the Top Riser list for the first time, with a brand value increase of 64 percent resulting from strong brand positioning and its announced IPO. NetEase, an online game marketer, made the Top 20 Riser list for the third consecutive year, rising 36 percent in value. The brand, which also operates a cross-border e-commerce site, Kaola.com, increased its mobile presence and also boosted its revenue from advertising, email, and other services.
Having helped drive China’s e-commerce phenomenon, with differing strategies, the two retail Top Risers, Alibaba and JD.com, reaped the benefits of success, with value rising, respectively, 53 percent and 50 percent. Alibaba’s multiple platforms connected buyers and sellers in China and abroad. And its other platforms, including Alipay, enabled users to conduct business or engage in social media without leaving Alibaba’s vast ecosystem. On China’s Single’s Day, a shopping holiday in November, Alibaba generated $25 billion in sales.
JD.com leveraged its strength in logistics, adding more distribution locations. It also strengthened its partnerships with Tencent and Walmart. By integrating its shopper data with Tencent’s WeChat, JD.com expanded its ability to connect with consumers at all time, particularly when they are interested in shopping. Both JD.com and Alibaba purchased, or created partnerships, with supermarkets, adding physical locations and accelerating their move into grocery.
In the remaining categories—cars, real estate, insurance, and travel agencies—the brand that appears in the Top Riser list significantly outperformed its respective category. Car brand Geely increased 75 percent in value, while the cars category rose 5 percent. Geely sold over 1 million vehicles and launched its Lynk brand, which it developed with Volvo and intends to introduce outside of China.
Although the real estate category increased a healthy 28 percent in value, the brand value of Evergrande Real Estate appreciated 88 percent, making it the No. 3 Top Riser, based primarily on a surge in stock price that recognized the potential of the company’s holdings in smaller, fast-growth cities, and its strategic shift from scale to profitability.
With the success of its broad financial services portfolio, shares of Ping An surged, and the brand increased 36 percent in value, the most of any insurance brand. The online travel agency Ctrip assembled a broad assortment of services to focus primarily on Chinese travelers, and value increased 36 percent, on top of a 32 percent value increase a year ago.