Here, we give you some highlights from the ranking, which is produced annually by Millward Brown in conjunction with WPP, filtering out the obvious, we-already-knew-that findings. An exclusive interview with Doreen Wang, global head of BrandZ at Millward Brown, helped us look into some of the 'whys'.
- The total brand value of the top 100 Chinese Brands is now US$464.2 billion, a rise of 59 per cent since the ranking launched in 2011. This growth has outpaced that in Brazil and Latin America.
- Market-driven brands dominate in terms of value growth, rising 97 per cent since last year. At the same time, SOEs (state-owned enterprises) declined 9 per cent. Whereas five years ago the top five brands were all SOEs, three of this year’s top five are market-driven.
- Retail, cars and technology are the fastest growing categories, with increases of 3,827 per cent, 141 per cent and 78 per cent, respectively.
- Lower economic growth in China and government policy changes contributed to a decline in seven categories, including alcohol, apparel and financial institutions.
The top 10
New entrant Alibaba, the e-commerce giant, appeared for the first time—at No. 2—after its IPO, which raised a record US$25 billion and introduced the power of Chinese brands to the public worldwide. Even without taking Alibaba’s value contribution into account, the retail category grew by 64 per cent.
However, beware: Alibaba's brand power as a corporate brand is less and less clear as the corporation ventures into almost everything other than e-commerce. "There is a danger that its brand power may be diluted. It's time that they think about their corporate branding strategy," said Wang.
Tech brands: Rapid rise in value
Technology companies such as Tencent have become brand powerhouses, and as a result the technology category has now surpassed financial institutions as the highest value category, contributing 23 per cent of the top 100’s total value (US$106.9 billion).
But even technology brands that enjoyed high brand value growth faced challenges—from each other. The members of the so-called BAT trio—search-engine Baidu, Alibaba and Tencent—expanded from their core competencies to enter each other’s domains through alliances and acquisitions.
Each attempted to become the default internet ecosystem for consumers, the one-stop destination where consumers could satisfy all their needs for search, news and entertainment, ecommerce, banking, email and a myriad other services.
Wang also sees the convergence of technology and retail as retailers are partnering with more tech brands to deliver digital products and services, mobile payment solutions and online-to-offline (O2O) commerce solutions, for instance.
"In two or three years, it is very possible to have the top five all technology or tech-related retail brands," Wang said.
Narrowing gap between Chinese and MNC brands
As Chinese companies improve the way they develop and execute marketing strategies with data anaytics, the gap between them and multinational brands within China is also narrowing. Consumers increasingly see little difference between the two, choosing brands based on the value they offer rather than provenance.
Five years ago Chinese and multinational brands were 26 points apart on the BrandZ 'Brand Power Index', which measures a brand’s competitive position in its category. Today their scores are almost identical.
"It is particularly interesting that Chinese brands are doing a huge amount of crossover collaborations that extend to other industries to fuel O2O opportunities and establish touchpoint frequency for themselves," Wang told Campaign Asia-Pacific. "Western brands don't have the same sense of urgency that Chinese brands have in the face of competition."
Globally, two brands derived more than half of their revenue from outside China in 2014: Lenovo (+62 per cent) and ZTE (+53 per cent).
“Consumers increasingly accept Chinese brands because they see them as meaningful and dynamic, not only because they’re well-known," Wang said. "The big question now is what brands must do to be accepted in international markets. Success will depend on playing on China’s unique identity to offer meaningful points of differentiation.”