Chinese brands grow total brand value by record amount
China has become one of the most competitive markets in the world with its brands having an exponential rise of 271% in value over the past five years, establishing a reputable presence in the global markets. With many companies seeking after the ‘Chinese Dream’ and many consumers ready to invest, various business opportunities have arisen.
To show the extent of Chinese brand reach, Kantar Millward Brown, a global research agency specialising in brand equity research and WPP, an advertising and marketing services company, have created a brand equity database, BrandZ. The database shows a top 100 ranking for the most valuable Chinese brands for 2018, with BrandZ’s portofolio having almost tripled the growth of the MSCI China Index since 2010.
David Roth, WPP, says, “The game is changing for brands that want to compete successfully in China. The country’s leadership expects brands to pursue a higher purpose; one that improves the lives of Chinese people, helps drive greater economic equality and strengthens the nation. “
“Chinese consumers appear more willing to pay a premium for innovative products and services. More sophisticated in their purchasing decisions, consumers are responding to brands that grab their attention and meet their needs in relevant ways with products and services that are both innovative and different.”
The BrandZ report is a result of people’s opinions for the brands they spend their money on, as well as financial records, market valuations, analyst reports and risk profiles. The brand’s reputation to its customers is a focal point for the determination of the brand’s value due to it being a combination of business performance, product distribution, ethics and leadership.
The brands featured in the report have accomplished record growth with a 23% rise in brand value, from around $557 bn a year ago to $684 bn in 2018. This makes 2018 development the biggest one-year growth since 2014, when the BrandZ China Top 100 ranking was first published.
Doreen Wang, global head of BrandZ, Kantar Millward Brown, says, “Chinese brands are quickly learning how to raise their profile through impactful and memorable advertising. A combination of having the right media mix, message and memorable communication is a sure bet towards accelerating brand value growth.”
At the top of the ranking for the fourth consecutive year, internet-related services and Chinese technology company Tencent is found with a brand value of $132.2 bn, achieving a 25% year-on-year increase.
Seng Yee Lau, senior executive vice president, chairman of Tencent advertising and chairman of group marketing and global branding, says, “Nowadays, digital connectivity and new technological innovations are intertwined with all forms of economic, cultural and social activities. Technology has become an integral part of our everyday lives, now the final piece of the jigsaw is ready to be put into place, and a completely digital China will emerge.”
Other sectors that have achieved a notable increase include education, logistics and technology such as e-commerce company Alibaba, which keeps growing at an exceptional rate of 53% year-on-year, resulting in a brand value of $88.6 billion.
Despite Chinese brands having established a reputable presence within the global business industry and international brands using their growth as a blueprint, the competitive market of the country has resulted in 28 Chinese brands not making it to the Top 100 this year.
Chinese brands are still falling behind in search indexes in comparison to global markets. However, that gap is gradually narrowing, with Google Search Index Data revealing the search volume has increased by 29%, causing Chinese brands to reach more consumers worldwide.
For more from Transform magazine, follow us on Twitter @Transformsays