Chinese brands come of age
Brand value rises 22 percent, market-driven brands outperform SOEs, technology surpasses banks in category value
To produce the 2015 Top 100 Most Valuable Chinese Brand report, identifying and ranking the most valuable brands was only the start of the process. Millward Brown and WPP then analyzed the creation of brand value in China, uncovering the drivers that can help brand owners – both Chinese and western – build valuable brands in a rapidly changing China.
The development of valuable brands in China – and the future expansion of these brands onto the world stage – is interconnected with China’s explosive growth during the past 35 years, the emergence of a prosperous middle class and the economic rebalance from production to consumption. Consider just of few this year’s highlights:
- Brand value increased 22 percent year-on-year, surpassing the growth of the BrandZ™ Top 100 Most Valuable Global Brands and the most valuable brands of Brazil and Latin America.
- The Internet portal Tencent doubled in brand value and claimed the number one position in the BrandZ™ China Top 100, displacing China Mobile, which has held the top spot until now.
- Alibaba, the ecommerce giant, appeared in the BrandZ™ China Top 100 for the first time – at number two – after its IPO (Initial Public Offering), which raised a record $25 billion and introduced the power of Chinese brands to the public worldwide.
Eligibility criteria and definitions
Brands included in the BrandZ™ Top 100 Most Valuable Chinese Brands meet four eligibility criteria. Included brands are:
Created by a mainland Chinese enterprise;
Owned by a publicly traded enterprise; and
Report positive earnings.
Financial brands derive at least 20 percent of earnings from retail banking.
Brand contribution is a BrandZ™ measurement of a brand’s uniqueness in the mind of the consumer and the impact of brand alone, without any other factors, on future earnings. Brand contribution is expressed with a scale of 1-to-5, 5 highest.
Brand power is a BrandZ™ measurement of a brand’s competitive position in its category. It roughly correlates with volume share. Brand power is a BrandZ™ component of brand equity, which is the consumer predisposition to choose one brand over another.
Meaningful, Different, Salient
These are the three BrandZ™ components of brand equity: Meaningful, Different and Salient. Success on these components predisposes consumers to choose a brand and pay a premium for it.
Meaningful: Consumers feel an affinity for the brand or think it meets their needs.
Different: The brand feels different from other brands or sets trends for its category.
Salient: The brand comes to mind quickly and readily when activated by ideas relating to category purchase.
This acronym stands for State Owned Enterprise, companies in which China’s central government, or a local jurisdiction, has an ownership stake. To better understand the dynamics of these brands, BrandZ™ divides them into two categories:
Strategic SOEs: These brands are in categories, such as banking or oil and gas, which are instrumental to development of the national economy. The government tasks these brands with implementing policy. Examples: Bank of China, Sinopec.
Competitive SOEs: These are brands in consumer-facing categories, such as alcohol or food and dairy. Building brand equity is an important success determinant. Examples: Moutai, Mengniu.
The SOEs included in the BrandZ™ Top 100 Most Valuable Chinese Brands are publicly traded.
Market-driven brands are privately owned and responsive to customers and marketplace forces.
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