Alibaba leads list dominated by retail, technology brands
Eight brands, from five categories, appear for the first time in the BrandZ™ Top 100 Most Valuable Chinese Brands. Retail is represented with three brands, technology with two, and health care, cars and home appliances with one each.
Six of the brands are market driven, and two are Competitive SOEs (State Owned Enterprises), which means they're subject to market forces even though the Chinese government has an ownership stake.
The dominance of market-driven brands is significant because these newcomers to the ranking are an indicator of how government policy shaped by the Third Plenary, in November 2013, produced more favorable conditions for open competition and brand value creation.
This dynamic is most clearly illustrated by Alibaba, which in its debut appearance in the BrandZ™ China Top 100 ranks number two, based on a brand value of $59.7 billion in the weeks after its Initial Public Offering (IPO) in September 2014. As a publicly traded company, Alibaba now meets the criteria for inclusion in the BrandZ™ ranking.
Alibaba's New York Stock Exchange IPO was historic because it raised the largest amount ever for an IPO, $25 billion. In addition, it lifted the profile of Brand China. As Alibaba became well known to the investment community, it also conditioned consumers outside of China to be aware of Chinese brands, most of which sit just below their radar.
These brands include several in the list of BrandZ™ China Top 100 newcomers. ZTE, a maker of telecommunications and systems, already derives more than half of its revenue from overseas business. One-third of TCL's revenue comes from its international business. The company makes a range of home appliances and focuses now on smart TVs and other entertainment devices.
Great Wall, a well-known car brand that enjoyed success with its SUV sales, particularly in tier two and three cities, also exports to Russia and other overseas markets. While online grocer Yihaodian conducts business only in China, Walmart owns a majority share and uses some of Yihaodian's best practices, if not its brand name, internationally. And around 12 percent of Alibaba's revenue already comes from outside of China.
Of course, China remains the predominant market overall for these newcomers and a source of great potential future growth. These brands reflect the ability of brands to appreciate in value as they deliver the innovative products and services desired by increasingly sophisticated and prosperous Chinese consumers.
Letv, for example, is a streaming video site that also produces its own branded smart TV. The company planned to raise investment financing to strengthen its core businesses and expand into retail and online financial services.
The health care brand Baiyunshan is a traditional Chinese medicine brand that offers both Chinese and western products. It became eligible for the BrandZ™ China Top 100 ranking after its recent acquisition by a publicly traded company.