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BRAND VALUE RISES 13% DESPITE TURBULENT YEAR
CONSUMERS PURSUE THE CHINESE DREAM AS BRANDS EXPAND MOBILE STRATEGIES
4 5
TOP 100 Most Valuable Chinese Brands 2016
WELCOME
In turbulent times, brand strength protects and propels the winners
2010. Compare that result with the performance of a stock portfolio comprised of brands from the BrandZ™ China Top 100 with the highest scores in Brand Contribution, a BrandZ™ measurement of brand strength. Over the same period, the portfolio of Brand Contribution leaders rose 103.5 percent.
Let’s pull back the lens even further so we can begin to see the outlines of future brand growth in China. Today, the BrandZ™ China Top 10 still accounts for almost two-thirds of total ranking value, a legacy of the production-driven economy and the central role of state-owned brands. However, the BrandZ™ China Top 10 only grew 3 percent in value, while the growth rate of brands 11-to-100 was over 30 percent. These faster-growing brands predominately are market-driven, as are nine of the 10 brands that entered the BrandZ™ China Top 100 for the first time. In other words, as China rebalances to a consumption-driven economy, the faster growing brands are those that depend less on government and more on effectively meeting consumer needs in ways that are Different and Meaningful.
THE UNPARALLELED CHINA RESOURCES OF WPP
Which raises the question, how does a brand best compete in this rapidly changing Chinese market? That’s where we can help. This sixth annual edition of the BrandZ™ Top 100 Most Valuable Chinese Brands represents a fraction of the knowledge, insight, and expertise available from brand experts at WPP companies in China.
WPP is the world’s communications services leader. Our companies have
been engaged in China for over 30 years. Today, 15,000 people, including associates, work across China in Beijing, Shanghai, Guangzhou and many other cities. We provide advertising; insight; branding and identity, direct, digital, promotion and relationship marketing; media investment management, retail and shopper marketing; and public relations and public affairs. It’s all part of our global presence in 112 countries.
By linking all this talent, creativity, and wisdom, we amplify global trends and insights that help our clients in useful and unique ways. We call this powerful perspective “horizontality.” It includes our unrivaled Brand™ resource library, which we invite you to access. Along with the BrandZ™ Top 100 Most Valuable Chinese Brands, the library includes these titles: the BrandZ™ Top 100 Most Valuable Global Brands; the BrandZ™ Top 50 Most Valuable Indian Brands; the BrandZ™ Top 50 Most Valuable Latin American Brands; the BrandZ™ Top 50 Most Valuable Indonesian Brands; and Spotlight on Myanmar - the ‘Leapfrog’ Nation.
You’ll also find insights about the Chinese market in these BrandZ™ reports: Unmasking the Individual Chinese Investor; The Power and Potential of the Chinese Dream; The Chinese New Year in Next Growth Cities; and The Chinese Golden Weeks in Fast Growth Cities. To download these and other BrandZ™ reports, please visit www.brandz.com. For the interactive BrandZ™ mobile apps go to www.brandz.com/mobile.
The backbone of all this intelligence remains the WPP proprietary BrandZ™, the world’s largest, customer-focused source of brand equity knowledge and insight. It is big data at its biggest, with 4.5 billion individual data points.
Using the BrandZ™ brand valuation methodology of Millward Brown, a WPP company, we analyze relevant corporate financial data and strip away everything that doesn’t pertain to the branded business. Then we take a critical step that makes BrandZ™ unique and definitive among brand valuation methodologies.
We conduct ongoing, in-depth quantitative consumer research with more than 200,000 consumers annually, across over 50 markets, to assess consumer attitudes about, and relationships with, over 100,000 brands. Our database includes information from over three million consumer interviews. It reveals the power of the brand in the mind of the consumer that creates predisposition to buy and, most importantly, validates a positive correlation with better sales performance.
At WPP, we’re passionate about using our creativity to create and build strong, differentiated brands that deliver lasting shareholder value. To learn more about how to apply our experience and expertise to benefit your brand, please contact any of the WPP companies that contributed expertise to this report. Turn to the resource section at the end of this report for summaries of each company and the contact details of key executives. Or feel free to contact me directly.
Sincerely,
David RothCEOThe Store WPP, EMEA & [email protected]: davidrothlondonBlog: www.davidroth.com
Consider these circumstances. An economy slows to 6.9 percent GDP growth from annual growth of 10 percent or more during much of the past decade. The stock market reaches a record high in June, loses about a third of its value by the end of summer, but ends the year up, actually outperforming the S&P 500. These events are the very definition of market volatility. And they describe the context for the 2016 BrandZ™ Top 100 Most Valuable Chinese Brands.
The events of China’s past year provided the perfect crucible for testing the fundamental principle behind all of our BrandZ™ work, which is that brand strength provides the fortitude to endure the most extreme market fluctuations and emerge successfully. In these circumstances, would you expect brand value to decline? Or do you think brand value might creep up slightly? Despite the difficult economic challenges, the value of the 2016 BrandZ™ China Top 100 rose a healthy 13 percent.
Let’s adjust the lens so that we are not focused on last year alone, but on a larger timeframe that encompasses the more than three decades since China embarked on economic reform, when the swells of industrial expansion lifted a lot of brands. Even as the current turbulence tossed some brands, the ballast of brand strength stabilized many others.
Here’s one demonstration of brand strength: The MSCI China, a weighted index of Chinese stocks ended 2015 10.7 percent lower than its level in
David RothCEO
The Store WPP, EMEA & [email protected]
Twitter: davidrothlondonBlog: www.davidroth.com
BrandZ™ Top 100 Most Valuable Chinese Brands 2016 Total Brand Value
$525.6 BILLION TOP 100
TOTAL VALUEINCREASED
13%FIRST TIME: Market-driven brands comprise over half the value of theBrandZ™ China Top 100.
Five of the Top 10 brandsare market-driven
$82.1 BIL.
1
TECHNOLOGYMarket-Driven
24%
TELECOM PROVIDERSState-Owned
$57.2 BIL.
22%
RETAIL Market-Driven
$47.6 BIL.
3-20%
BANKSState-Owned
$34.3 BIL.
4-1 %
TECHNOLOGYMarket-Driven
$26.8 BIL.
5-13%
BANKSState-Owned
$19.7 BIL.
6-6%
TECHNOLOGYMarket-Driven
$18.5 BIL.
7NEW
BANKSState-Owned
$16.2 BIL.
85%
INSURANCEMarket-Driven
$15.6 BIL.
941%
INSURANCEState-Owned
$15.5 BIL.
1053%
TOP 10 MOST VALUABLE CHINESE BRANDS
CATEGORY VALUE CHANGES
NEWCOMER BRANDS OVERSEAS REVENUE
7 15 31 52 69Technology - Market-Driven
76Baby Care - Market-Driven
81So� Drinks - Market-Driven
93Jewelry Retailer - Market-Driven
98Airlines - Market-Driven
99Cars - State-Owned
Mizone
Retail - Market-Driven Real Estate - Market-Driven Technology - Market-DrivenYouku Tudou
Personal Care - Market-Driven
Three brands derived at least half of their revenue from overseas business.
Revenue % from International Business $ Total Brand Value
68% 50%62%
PersonalCare
61%
$1.6 Bil.Total Category Value
3Brands
JewelryRetailer
61%
$2.0 Bil.Total Category Value
4Brands
RealEstate
50%
$14.4 Bil.
10Brands
Total Category Value
Insurance
44%
$40.6 Bil.
6Brands
Total Category Value
Airlines
39%
$11.5 Bil.
5Brands
Total Category Value
TravelAgencies
39%
$2.0Bil.
2Brands
Total Category Value
Cars
38%
$2.6Bil.
3Brands
Total Category Value
Technology
32%
$141.1 Bil.
10Brands
Total Category Value
HomeAppliances
31%
$8.5 Bil.
7Brands
Total Category Value
Alcohol
30%
$20.8 Bil.
11Brands
Total Category Value
Furniture
29%
$462 Mil.
1Brand
Total Category Value
Hotels
11%
$1.1 Bil.
3Brands
Total Category Value
Healthcare
5%
$5.8 Bil.
3Brands
Total Category Value
Education
3%
$1.4 Bil.
2Brands
Total Category Value
Food & Dairy
3%
$15.0 Bil.
6Brands
Total Category Value
Banks
3%
$98.8 Bil.
9Brands
Total Category Value
Retail
-2%
$61.0 Bil.
4Brands
Total Category Value
Oil & Gas
-15%
$23.4 Bil.
2Brands
Total Category Value
Catering
-29%
$342 Mil.
1Brand
Total Category Value
Apparel
-46%
$1.3 Bil.
3Brands
Total Category Value
Baby Care
NEW
$460 Mil.
1Brand
Total Category Value
So� Drinks
NEW
$398 Mil.
1Brand
Total Category Value
Top 100 Rank
Top 100 Rank
Top 100 Rank
Top 100 Rank
TelecomProviders
$70.9 Bil.
3Brands
Total Category Value
-1%
TOP 10 RISERS
1
273%
$2.8 billionMarket-DrivenBrand Value Rank 32Technology
$1.9 billionMarket-DrivenBrand Value Rank 40Technology
81%
LETV
370%
$411 millionState-OwnedBrand Value Rank 80Insurance
468%
$3.3 billionMarket-DrivenBrand Value Rank 26Retail
559%
$389 millionMarket-DrivenBrand Value Rank 82Home Appliances
659%
$273 millionState-OwnedBrand Value Rank 95Home Appliances
754%
$2.5 billionMarket-DrivenBrand Value Rank 33Home Appliances
853%
$15.5 billionState-OwnedBrand Value Rank 10Insurance
951%
$11.5 billionState-OwnedBrand Value Rank 13Alcohol
1049%
$724 millionMarket-DrivenBrand Value Rank 63Home Appliances
Brand Value $3.8 billionState-OwnedTechnology
Brand Value $1.5 billionMarket-DrivenTechnology
Brand Value $18.5 billionMarket-DrivenTechnology
16 CATEGORIES 5 CATEGORIES NEW 2 NEW CATEGORIES
1 2 3 5 6 7 8 9 104 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2729
2830
3132
3334
3536
3738
3940
4142
4344
4546
47
4849505152535455 W565758596061626364656667686970717273747576777879
10090
9192
9394
9596
9798
9980
81
8283
8485
8687
8889
TOP 100
Download the Mobile appwww.brandz.com/mobile
www.brandz.com
14 60 90 108 200 228
230
232
234
236
242
244
246
247
248
249
210
224
115
144
158
192
188
92
96
98
102
64
68
72
76
80
82
20
24
36
40
42
50
54
9
TOP 100 Most Valuable Chinese Brands 2016
OVERVIEW
BRANDZ™ CHINA TOP 100 STOCK PORTFOLIO
TOP LINE RESULTS
Top 100 rises 13% in difficult year
Market-driven brands now over half of ranking value
Consumer mood is optimistic; priorities changing
Chinese brands close Brand Power gap with MNCs
THE CHINESE DREAM
ECONOMY, DEMOGRAPHICS, AND CONNECTIVITY
CROSS CATEGORY TRENDS
TAKE AWAYS
OUR INSIGHTS
1. CONSUMER INSIGHT: Price matters, but consumersnow seek quality and premium
2. DIFFERENCE: Chinese brands must communicate Difference
3. CORPORATE REPUTATION: Decline in Corporate Reputation impacts both multinationaland Chinese brands
4. INNOVATION: Drives brand value and greater market penetration
5. DIGITAL COMMUNICATION: Consumers are on mobile, but engaging them is challenging
6. CREATIVE QUALITY: Big ideas turn media into magic
OUR INSIGHTS
THE CHINA TOP 100 RANKING
THE CHINA TOP 100 BRANDS IN BRIEF
THE TOP PERFORMERS
Top 20 in Brand Contribution
Newcomers
Top 20 in Global Revenue
Top 20 Risers in Brand Value
CATEGORY UPDATE
Category Overview
Categories in Brief
Q&A WITH SENIOR EXECUTIVES OF TOP 100 BRANDS
Edward Cheng, Corporate Vice President, Tencent
Wang Zhenghua, Chairman, Spring Airlines
OUR INSIGHTS
INTRODUCTION
SIX CRITICAL OBSERVATIONS FOR BUILDING BRAND VALUE
THE CHINA TOP 100
BRAND BUILDING PERSPECTIVES RESOURCES
THOUGHT LEADERSHIP
DIGITALBy Jason Yu, General Manager, Kantar Worldpanel China
E-COMMERCEBy Oceanne Zhang, Director of Retail Insights and
E-Commerce, Kantar Retail
PHYSICAL WORLD OPPORTUNITYBy Leon Zhang, Director,
Millward Brown Vermeer
BRAND AS CAPITAL ASSETBy Doreen Wang, Global Head of BrandZ™, Millward Brown
THE NEW NORMALBy Charles Laporte Aust, Vice President and Jacco ter Schegget, President, OgilvyOne China
MARKET SEGMENTATION
Sports MarketingBy John Kristick, Global CEO and Jin Wei Toh, Regional Head, APAC
ESP Properties
Youth Marketing By Lucy Yu, Business Development Director, Millward Brown
Senior Marketing By Theresa Loo, Chief Knowledge Officer and Lily Xiong, Associate Research Director, Ogilvy & Mather China with Zod Fang, Director, GroupM Knowledge China and Liu Yu, Vice President, GeTui
CHANGING MEDIA LANDSCAPE
Managing Change and Complexity Maneesh Choudhary, Head of Client Service and Solutions and Jenny Ma, Group Account Director, Millward Brown Beijing
E-commerce and M-commerce By Nils Roehrig, Chief Digital Officer, GroupM China
Social Media By Sam Flemming, Founder & CEO, Monica Zhao, Head of Research Innovation, Kantar Media CIC and Theresa Loo, Chief Knowledge Officer, Ogilvy & Mather
Agency ResponseBy Patrick Xu, CEO, GroupM China
OUR INSIGHTS
BrandZ™ Valuation Methodology
BrandZ™ Eligibility and Definitions
BrandZ™ Reports, Apps and iPad Magazines
WPP Companies
WPP Company Contributors
WPP Company Brand Building Experts
BrandZ™ China Top 100 Teamand Acknowledgments
About WPP
Brands Valuation Contact Details
WPP in China
BrandZ™ Online and Mobile
8
P EO P L E S E E T H E C H I N E S E D R E A M
OF A B E T T E R L I F E ON T H E N E A R HOR I ZON .
01INTRODUCTION
OVERVIEW
BRANDZ™ CHINA TOP 100 STOCK PORTFOLIO
TOP LINE RESULTS
THE CHINESE DREAM
ECONOMY AND DEMOGRAPHICS
CROSS CATEGORY TRENDS
TAKE AWAYS
OUR INSIGHTS
12 13
OVERVIEW
Value rises 13% despite slowereconomy and stock market slide
in Brand Power, the BrandZ™ measurement of brand equity. Brand Power parity means that Chinese and multinationals are in many ways equally competitive. And the trend favors Chinese brands. In 2010, multinationals scored 115 in Brand Power and Chinese brands scored 89. Today both score 100, which is average.
TECHNOLOGY AND MOBILE DRIVE VALUE
The rising value contribution of market-driven brands is also reflected in the relative proportion of value contributed by the 23 categories examined in the 2016 BrandZ™ China Top 100 ranking.
A stock portfolio comprised of the BrandZ™ Top 100 Most Valuable Chinese Brands demonstrated the impact of brand strength. It significantly outperformed the MSCI China, a weighted index of Chinese stocks, increasing over time and protecting gains even during the stock market tumult, when the MSCI lost value. (Please see related story.)
In a historic inflection, the majority of value in the BrandZ™ China Top 100 shifted to market-driven from state-owned brands. The technology category, especially mobile Internet brands, rose in prominence, as the stimulus of China’s economic growth continued to rebalance from production to consumption.
Technology, a category comprised of market-driven brands, accounted for 27 percent of BrandZ™ China Top 100 value. Two years ago, technology produced just 16 percent of value. At that time banks accounted for the largest segment of brand value, 30 percent. Banks now contribute less than a fifth.
Two technology brands, online video provider Letv, and NetEase, the developer of Internet technology and games, registered the largest year-on-year brand value increases, 81 percent and 73 percent, respectively. Four technology brands were among brands that derived a major portion of revenue from overseas business:
telecommunications giant Huawei; Lenovo, a world-leading computer and mobile technology company; smartphone maker ZTE; and Tencent, the Internet portal.
Three of the five market-driven brands in the Top 10 are in the technology category, including Huawei, which joined the BrandZ™ China Top 100 for the first time. The other technology brands in the Top 10 are Tencent, China’s most valuable brand, which rose 24 percent in brand value after almost doubling in value a year ago, and the search engine Baidu. In addition, online marketplace JD.com, a strong challenger to Alibaba, entered the ranking at number 15.
The BrandZ™ Top 100 Most Valuable Chinese Brands
2016 increased 13 percent in value, a lower increase
than the previous year, but a strong performance at a
time when China’s economy slowed and the stock market
fluctuated with extreme highs and lows. In this choppier
period, brand strength became an even more critical
success determinant.
OPTIMISTIC CONSUMERS MOBILIZE TO PURSUE CHINESE DREAM
For the first time, market-driven brands produced over half the total value of the BrandZ™ China Top 100, 51 percent, and five of the Top 10 brands were market-driven. Just two years ago only two of the Top 10 were market-driven.
Signaling enormous potential, brands ranked 11-to-100 grew over 30 percent in value, while the Top 10 grew only 3 percent. Currently, the Top 10 produce almost two-thirds of total value.
Similarly, nine of the 10 brands that joined the BrandZ™ China Top 100 for the first time were market-driven.In addition, Chinese brands achieved parity with multinational brands
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
14 15
Meanwhile, Alibaba, number three in the BrandZ™ China Top 100, continued to expand its ecosystem with the acquisition of the video entertainment brand Youku Tudou, which joined the BrandZ™ China Top 100 for the first time, at number 52. BrandZ™ lists e-commerce brands, like JD.com and Alibaba, in the retail category, but these brands illustrate the impact of technology, and specifically mobile engagement with consumers.
Of China’s 668 million Internet users, 89 percent, 594 million users, accessed the Internet with a mobile device, as of June 2015, according to the China Internet Information Center (CNNIC). Brands increasingly rely on mobile to engage with Chinese consumers and assist their efforts to realize the Chinese Dream of a better life for themselves and their families. Consumers spend over two hours a day on their mobile devices, according to Millward Brown’s AdReaction study.
CONSUMERS OPTIMISTIC DESPITE TURBULENT MARKET
Despite the slower economy and the erratic stock market, Chinese consumers remained optimistic that they would achieve the Chinese Dream over the next decade, and they continued to spend both on necessities and even on big-ticket items. Some postponed buying a car or home, but few canceled those purchase plans.
Reflecting greater consumer buying power and sophistication, shopping patterns changed. The growth rate of FMCG sales declined as consumers shopped less frequently. They sought to save money on items viewed as commodities, while for other items,
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
16 17
particularly in personal care and healthcare, consumers willingly paid a premium when justified.
Research by WPP revealed these consumer trends, which impacted the brands and categories examined in the BrandZ™ China Top 100 ranking. A BrandZ™ report investigated the attitudes and behaviors of the consumers who were also small investors in the China stock market. Kantar Worldpanel examined changing shopping patterns. (Please see consumer mood story.)
Consumers were also more skeptical and impatient with products of low quality or unacceptable safety standards. Corporate Reputation in China declined from a score of 101, around average, to a below average score of 97, as measured by RepZ, a BrandZ™ metric. The decline in Corporate Reputation touched both local Chinese brands and multinational brands operating in China. (Please see Corporate Reputation story.)
However, consumers sustained their optimism even as GDP growth slowed to 6.9 percent, the Shanghai Composite Index lost about a third of its value during the summer of 2015, and external forces also battered the economy, including the drop in crude oil prices, which ended 2015 at $37 a barrel.
The government reinforced consumer optimism. Following government intervention, the Shanghai Composite Index rebounded, and ended the year up over 12 percent, beating the S&P 500. Consumers also have faith in realization of the Chinese Dream of a more prosperous, equitable, and internationally respected nation, as first articulated by Xi Jinping three years ago.
OVERVIEW
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
18 19
GOVERNMENT INITIATIVES ADVANCE THE CHINESE DREAM
President Xi and the Chinese government introduced several domestic and international measures to advance the Chinese Dream. The Belt and Road initiative is intended to connect China with nearby and more distant trading partners. It references the Silk Road, the network of trading routes that laced China and the surrounding territories starting with the Han Dynasty around 2,000 years ago.
The government also accelerated development of a virtual network with Internet+, the plan to prepare China for economic growth in a post-industrial, connected world of mobile devices, big data, cloud computing and the Internet of Things. China’s three state-owned telecom providers accelerated the
rollout of 4G and the move to 5G. The 2015 World Internet Conference, held in China, drew attention to China as an Internet technology leader.
In his speech at the World Internet Conference, and in his personal diplomacy, Xi has demonstrated determination to raise the international profile of China and facilitate trade. Since taking office in 2013, Xi has visited over 30 countries, in part to strengthen strategic commercial relationships with countries and regions, including India, Russia, the UK, the US, and Middle East.
To stimulate domestic consumption, the government introduced cross border e-commerce zones with lower tariffs on imported merchandise. Chinese consumers enjoyed lower online prices and faster delivery for imported goods. The first cross border e-commerce zone was established in March 2015, in
Hangzhou. The government plans to set up zones in Shanghai, Guangzhou and 10 other cities.
In another step to stimulate economic growth, the government rescinded China’s one child policy. Larger families are expected to impact just about every category of products and services, including food and dairy, education, real estate, and baby care. The introduction of the baby care category in the BrandZ™ China Top 100 this year is a preview of the anticipated growth.
Government limitations on extravagant official entertainment or gift giving, aimed at curtailing corruption, continued to impact certain categories, like alcohol. But many of the most successful brands have effectively repositioned and now reach a wider audience, through broader distribution channels with more modest pricing.
With all these changes, China remains a
singular opportunity for brand growth –
but a more complicated and competitive
opportunity. Growth is slower and the
greatest potential is deeper in the country
and harder to reach. Using the Internet,
particularly mobile, brands are engaging
with consumers in smaller cities, towns and
villages, and strengthening relationships
with customers in the coastal cities. These
dynamics affect all brands regardless of
ownership.
For multinational brands, being foreign is no
longer an adequate differentiator because
local Chinese brands have caught up in
Brand Power, the BrandZ™ measurement
of brand equity. And Chinese brands, both
state-owed and market-driven, have invested
heavily to build Salience and be easily
recalled when a consumer is in a purchasing
mind frame. But Salience alone is insufficient
without being Different in a Meaningful way.
Chinese brands need to build Difference.
At the same time, communicating and
engaging with consumers has become more
challenging because of changing media
habits. Over half of all media investment will
be spent on digital in 2016, GroupM predicts.
And reaching consumers can be tricky.
They prefer to watch video ads on TV. But
they spend more than half of their screen-
watching time on mobile devices, primarily
smartphones.
Finally, the geography of Chinese brand
competition is changing. An encounter with
a Chinese brand can happen anywhere in
the world. Ten years ago, only one Chinese
brand, China Mobile, ranked in the BrandZ™
Top 100 Most Valuable Global Brands. Today,
14 Chinese brands are included in the Global
ranking, and that number is expected to rise
as Chinese brands build global presence.
For example, Haier, the home appliances
brand, is expected to firmly establish in the
US with the acquisition of General Electric’s
appliance division.
Brand success in China requires high
awareness, meaningful differentiation,
compelling creative work and an integrated
media plan, with traditional and mobile
components, to reach Chinese consumers at
the right time with the appropriate message
in the most effective medium. More than
ever, brand builders need the combination
of strategic thinking and effective execution
of a chess champion or, even better, a
master of XiangQi, the Chinese board game
invented during the Han Dynasty.
Implications for Brands
OVERVIEW
Chinese President Xi Jinping and Queen Elizabeth II during a state visit to the United Kingdom in October 2015.
Photo by David Roth
JUL 2010
180%
160%
120%
140%
100%
80%
60%
40%
20%
0%
JAN 2011 JUL 2011 JAN 2012 JUL 2012 JAN 2013 JUL 2013 JAN 2014 JUL 2014 JAN 2015 JUL 2015 JAN 2016
-20%
STOCK PERFORMANCE
Stock portfolios of the most valuable Chinese brands outperform market
During the early part of the year, the stock market rose sharply as investors pursued opportunities to make rapid profits. This activity continued to drive up stock prices until the bubble burst, on June 12. Following an initial recovery and government intervention, the market fell sharply again, on August 24.
Between June and September, the Shanghai Composite Index lost about a third of its value, before recovering some value by the end of the year. The MSCI China, a weighted index of Chinese stocks ended 2015 10.7 percent lower than its level in 2010.
In sharp contrast, the BrandZ™ China Top 100 Portfolio ended the year 43.1 percent above its 2010 level. This stock portfolio consists of all the brands in the BrandZ™ Top 100 Most Valuable Chinese Brands.
The extreme fluctuations of China’s stock market in 2015
provided a “stress test” for the resilience of brands and the correlation between brand
strength and shareholder return on investment.
Valuable brands deliver superior shareholder returns
A separate stock portfolio of the brands in the BrandZ™ China Top 100 with the strongest Brand Contribution was up 103.5 percent since 2010. Brand Contribution is a BrandZ™ measurement of brand strength, the influence of brand alone on earnings, with other factors stripped away.
In other words, $100 invested in the MSCI China in 2010 would be worth only about $90 today. That $100 invested in the BrandZ™ China Top 100 would be worth $143, and it would more than double to $204 in the Brand Contribution Portfolio because of the brand strength of the component stocks.
These results demonstrate several important realities: (1) brand strength provides stability, even in the most volatile market conditions; (2) investments brands made to build value are measurably rewarded in the stock market; and (3) valuable brands deliver superior shareholder returns.
BrandZ™ China Portfolios vs. MSCI China July 2010 to January 2016
01 > Introduction - Overview TOP 100 Most Valuable Chinese Brands 2016
20 21
Source: BrandZ™ / Millward Brown, Bloomberg
For extensive analysis of attitudes and behavior influencing the
Chinese stock market and the impact on brands, please see
Unmasking the Individual Chinese Investor,
a new BrandZ™ research report, available at brandz.com.
■ BrandZ™ China Brand Contribution Portfolio (Brands in the China Top 100 ranked highest in Brand Contribution. Brand Contribution is a BrandZ™ measurement of brand strength)■ BrandZ™ China Top 100 Portfolio (All China Top 100 brands)■MSCI China (a weighted index of Chinese stocks)
103.5%
43.1%
-10.7%
AM B I T I ON S A N D E N E RG Y S OA R W I T H P O S S I B I L I T I E S
I N T H E MOR E M A R K E T- D R I V E N E CONOM Y.
TOP 100 GROWTH
Top 100 valuerise keeps pacewith rate of Top100 Global brands
China’s GDP growth slowed to 6.9 percent in 2015, down from 7.3 percent the prior year, according to China’s National Bureau of Statistics. The Shanghai Composite lost about a third of its value between June and September before recovering by the end of the year. Brands were not immune to this volatility, of course, but inoculated with high Brand Power the most valuable brands survived and even thrived. Brand Power is the BrandZ™ measurement of brand equity.
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016 increased 13 percent in value to $525.6 billion. Although the increase is lower than the 22 percent rise a year ago, brand value rose despite the countervailing forces of China’s slower economic expansion and extreme stock market fluctuations.
A comparison of the stock market performance of MSCI China, a weighted index of Chinese stocks, and the BrandZ™ Portfolio of the Top 100 Most Valuable Chinese Brands, shows that in January 2016, the MSCI was down 10.7 percent from its 2010 level, while the BrandZ™ China Top 100 Portfolio was up 43.1 percent. A related China BrandZ™ Top 100 stock portfolio comprised of brands with exceptional brand strength more than doubled in value over the same period.
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
24 25
13%BrandZ™ Top 100 Most Valuable Chinese Brands 2016 Total Brand Value
$525.6 BILLION
These results demonstrate that brand strength provides stability, even in the most volatile market conditions; investments brands make to build value are measurably rewarded in the stock market; and valuable brands deliver superior shareholder returns.While market volatility and global economic forces, including the low prices for crude oil, pressured certain brands and categories, they also opened opportunities for smaller, entrepreneurial brands, able to perform with more agility than some of the State Owned Enterprises (SOEs).
The China BrandZ™ Top 10 grew only 3 percent in value, as it transitions to market-driven brands, while lower ranks, filled with market-driven brands, grew sharply in value; brands ranked 11-to-50 increased 36 percent and 51-to-100 increased 34 percent.
Considered in a worldwide context, the 2016 China BrandZ™ Top 100 13 percent increase is comparable to the 14 percent brand value rise of the BrandZ™ Global Top 100. It was faster than the growth rate of the BrandZ™ Latam Top 50, but slower than the BrandZ™ India Top 50, which experienced exceptional growth, driven by a robust economy, consumer empowerment, and financial sector strength.
The BrandZ™ China Top 100 grows 13 percent…
… And the China Top 100 keeps pace with Global Top 100
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016 increased 13 percent in value to $525.6 billion, after growing 22 percent a year earlier.
The 13 percent growth rate of the BrandZ™ China Top 100 was comparable to the 14 percent brand value change of the BrandZ™ Global Top 100.
Source: BrandZ™ / Millward Brown
2014 to 2016 BrandZ™ China Top 100 Value Change BrandZ™ ranking growth rates
India Top 50
Global Top 100
China Top 100
LatAm Top 50
Economic and stock market fluctuations
are inevitable in a market-driven economy.
However, brands do not inevitably need to rise
and fall extremely with the economic cycles. A
strong brand, or brand equity, strengthens the
brand immune system and helps moderate the
impact of economic swings.
Even when external forces impact competitors,
resilient, strong brands can grow in value, gain
market share, achieve strong financial results,
and deliver superior returns to investors.
Implications for Brands
$379.8 Billion
2014
$464.2 Billion
2015
$525.6 Billion
2016
+22% +13%
33%
14%
13%
2%
MARKET-DRIVEN BRANDS
Market-driven brands now exceedhalf of ranking value for first time
These developments demonstrate how China’s economy is changing in fundamental ways as the government invites more market competition to enable private enterprises, encourage consumption, create wealth, and distribute it more equitably. The BrandZ™ results also signify the growing importance of brands.
Since 1978, when Deng Xiaoping first introduced market reforms, Chinese consumers have experienced a government-driven economic transformation that created or improved products and services in most sectors of the economy. Today, Chinese consumers want more. The brand choices they make will help shape the country’s prosperity over the next period of economic change.
It is only around three years since Xi Jinping articulated the idea of
Market-driven brands comprise over half the brand
value of the BrandZ™ Top 100 Most Valuable Chinese
Brands for the first time since the ranking was introduced
in 2011. In addition, the China Top 10 is now evenly split
between market-driven and state-owned brands.
rebalancing the economy. This process is not completed overnight, even in China, however the results of the BrandZ™ China Top 100 indicate how extensively change is happening. Market-driven brands now comprise 51 percent of the BrandZ™ China Top 100 brand value, compared with only 29 percent, in 2014.
Over those three years, the amount of BrandZ™ China Top 100 value driven by State Owned Enterprises (SOEs) declined to 49 percent from 71 percent. Similarly, five of the Top 10 brands are market-driven in the 2016 BrandZ™ China Top 100, compared with only two brands in 2014. And five of the Top 10 are SOEs, compared with eight three years ago. Perhaps more important than changes over the past three years, is the potential for even greater change throughout the BrandZ™ China Top 100 ranking.
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
26 27
Market-driven brands are 51 percent of Top 100 Value…
… And half of the Top 10 are market-driven
Market-driven brands comprise over half of the value of the BrandZ™ Top 100 Most Valuable Chinese Brands for the first time.
The BrandZ™ China Top 10 is now evenly split between market-driven and state-owned brands.
Source: BrandZ™ / Millward Brown
Share of China Top 100 value by ownership Number of brands in China Top 10
28
37
55
2014
2015
2016
29%71%
47%53%
51%49%
2014
2015
2016
■ State-Owned■ Market-Driven
■ State-Owned■ Market-Driven
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
28 29
These results suggest that the
Chinese market is more open
to competition, but they do
not say that success is assured.
Challenging well-known, well-
established SOEs still requires
having a product or service
that benefits the consumer
in a Different and Meaningful
way, along with investment to
communicate those benefits
and build Salience.
And SOEs, now under greater
pressure, need to project
more than Salience to remain
competitive. SOEs also need
to rebuild Difference, which
eroded over time because
SOEs won with dominance,
not Difference. It is critical for
SOEs to differentiate now, in
a rebalancing economy, with
more competition from market-
driven challengers.
These challengers have an
important opportunity. Often
fast-growing, energetic
brands lower in the ranking,
they receive less media and
investor attention than the
better-known, higher value
brands. With communications
and promotion investment
these brands, with important
stories to tell, could draw more
attention from media, investors,
and customers.
Implications for Brands
Value is still concentrated at the top of the ranking. The Top 10 produce 64 percent of the value. However, the value growth rate of the Top 10 is declining, while value growth rate is increasing dramatically throughout the rest of the ranking. The value of the BrandZ™ China Top 10 increased by only 3 percent; but the brands ranked 11-to-50 rose 36 percent in brand value, and brands ranked 51-to-100 rose 34 percent.
Market-driven brands, which grew 22 percent in brand value, drove this distribution of value throughout the ranking, primarily. But Competitive SOEs grew 20 percent in brand value. Competitive SOEs are state-owned brands in consumer-facing categories, like food and dairy, where brand equity is an important success determinant. In contrast, Strategic SOEs grew only 3 percent in brand value. These brands, in categories like oil and gas, are closely aligned with the government and involved with policy implementation.
This contrast, between higher value/slower growth brands toward the top of the ranking and lower value/faster growth brands toward the bottom, means that over time the BrandZ™ China Top 100 should begin to resemble the BrandZ™ Global Top 100 where the Top 10 account for only 35 percent of value, which is much more evenly distributed.
Brands below Top 10 grow faster in brand value…The rate of Top 10 value growth is declining, while throughout the rest of the BrandZ™ China Top 100 ranking the rate of value growth is increasing dramatically.
BrandZ™ China Top 100 Brand Value year-on-year change by ranking range
… And value is distributed more evenly in the Global 100 vs. the China 100Brand value is concentrated at the top of the BrandZ™ China Top 100, compared with the BrandZ™ Global Top 100, where value is more evenly distributed throughout the ranking. However, fast-growing market-driven brands are driving rapid value rise lower in the BrandZ™ China 100 ranking, while value is growing at a fairly even pace throughout the Global ranking.
Source: BrandZ™ / Millward Brown
% Brand value year-on-year change
SOEs decline in DifferentBetween 2014 and 2016, SOEs declined 14 points in Different, from a score of 119 to 105. SOEs are still better than average, a score of 100, in Different. But if the steady decline continues, SOEs will become more vulnerable to market-driven competitors.
Source: BrandZ™ / Millward Brown
Change in Brand Power component scores 2014 to 2016
MARKET-DRIVEN BRANDS
3%28%
10%
18%
22% 13%
36%
34%
Ranking 1 - 10
Total Value
Ranking 11 - 50
Ranking 51 - 100
■ 2014 vs. 2015 ■ 2015 vs. 2016
35%
64%
43%
5%
22%
31%
State-Owned Market-Driven
MEANINGFUL -2 +1
DIFFERENT -14 -0
SALIENT +12 +10
■ Ranking 1 - 10■ Ranking 11 - 50■ Ranking 51 - 100
3%
14%
8%
19%
36%
34%
BrandZ™ Global Top 100
2014 vs. 2015
BrandZ™ China Top 100
2015 vs. 2016
declining volume of exports. Not surprisingly, high housing prices was a greater source of pessimism among younger people, ages 18-to-30.
Because of the general optimistic frame of mind, over 80 percent of investors surveyed in the BrandZ™ report said that the stock market volatility would have little or no effect on their spending. They expected to limit cutbacks for necessities and moderate spending for luxuries and entertainment, if necessary.
They also planned to continue spending for telecommunications services and education. Big-ticket spending was well protected, too. Few people planned to cancel the purchase of a car, home or vacation because of the stock market setbacks. Most may postpone purchase of a home, but few will cancel these plans. Vacations are most sacrosanct.
CONSUMER MOOD
Optimistic consumers spend,but priorities begin to change
The rate of spending on fast moving consumer goods (FMCG) is declining because consumers are becoming more pragmatic and sophisticated as shoppers. Consumers sought discounts in the FMCG categories they viewed as commodities. In other FMCG categories, especially related to personal health, consumers were willing to pay a premium. With growing disposable income, Chinese consumers also are spending more on travel and entertainment.
These findings are contained in two recent WPP reports. BrandZ™ research examined the attitudes and behaviors of China’s individual investors toward the end of 2015, after the stock market declined precipitously.
Chinese consumers had many reasons to feel pessimistic last year. But they did not. Despite the slowdown in economic growth and extreme stock market fluctuations, Chinese felt optimistic about the economy and the stock market. These factors only had a modest effect on spending, even for big-ticket purchases.
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
30 31
Chinese investors feel optimistic about the stock market…
… Faith in government to fix problems drives optimism in stock market…
… And faith in government drives optimism about the economy
Almost three-quarters of investors say they are fairly or extremely optimistic about China’s stock market, despite the sharp drops in overall value.
Investors who feel optimistic about China’s stock market offer believe the government is trying to improve the economy.
Of the three quarters of investors who are optimistic about the economy, two-thirds believe that China’s economy is in transition and will become healthier.
Source: BrandZ™
Source: BrandZ™
How do you feel about China’s stock market performance?
Why do you feel optimistic about China’s stock market?
Why do you feel optimistic about China’s economy?
Kantar Worldpanel analyzed the FMCG shopping patterns of Chinese households.
Almost three-quarters of China’s small investors feel optimistic about the stock market based on faith that the government will continue to drive economic growth and correct any stock market difficulties along the way. These attitudes are fairly consistent across age, gender, income, city of residence and investment experience.
Around three-quarters of Chinese individual investors also feel optimistic about the economy. Two-thirds of the optimists believe that China’s economy is in transition and will become healthier. A somewhat smaller
group, 60 percent, is confident that the government is trying to improve the economy. And for 55 percent, China’s increased international stature reassures them about the nation’s economy. Their optimism is reflected in the vitality of the retail industry, which grew at a monthly rate of 10 percent or more during 2015, according to China’s National Bureau of Statistics. Retail spending also is indicative of China’s economic growth driver shifting from production to consumption. Although the 6.9 percent annual GDP growth in 2015 was less than half of GDP growth at its peak, in 2007, consumption now contributes a greater proportion to GDP, which is also comprised of investment and net exports.
The pessimists, a minority, worry that economy is declining, inflation is rising, and housing prices are high. Some expressed concern about China’s
■ Extremely Optimistic■ Fairly Optimistic■ Don’t know/No idea
■ Only somewhat Pessimistic
■ Extremely Pessimistic
2%
22%
2%
11%
62%
■ The government is trying to improve overall economy ■ The government is issuing new trading policy■ The system of the stock market is turning transparent
and mature ■ The government will rescue the stock market
performance■ Others
59
58
52
22
1
67
60
55
46
41
■ China is in economic transition, and the economic environment will become healthier and better■ The government is trying to improve the economy■ The international status of China is improving■ Economic solutions and policies to strengthen China’s economy are being implemented■ National leaders’ visits to other countries will bring more business opportunities
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
32 33
Source: BrandZ™
How did the two stock market drops affect your plans to purchase these items?
This optimism and determination to maintain spending habits happened in the context of the increasing affluence and sophistication of Chinese consumers and the refinement of consumption behavior. Chinese are shopping less but spending more on each trip because they increasingly are concerned not with price alone, but value and quality.
The change in shopping behavior is clear in FMCG spending, where the rate of growth has declined from 11.8 percent in 2012 to 3.5 percent in 2015, according the research by Kantar Worldpanel. The research divides the 26 FMCG categories studied into
The stock market swings had little effect on spending…
Premium brands gain market share
… Even big-ticket spending plans continue
Over half of Chinese investors said the stock market correction will have little effect on spending, and 28 percent expect no effect.
Of FMCG brands that increased market penetration, added new buyers, 64 percent sell products at premium or even super premium prices.
Few investors plan to cancel the purchase of a car, home or vacation because of the stock market setbacks. Most may postpone purchase of a home, but few will cancel these plans.
Source: BrandZ™
Source: Kantar Worldpanel
How did the two stock market drops affect your regular shopping behavior?
Winning brands increased penetration (gained new buyers), losing brands decreased penetration.Price Index = Brand Average Price/Category Average Price X 100
two groups: those with prices rises exceeding inflation and those lagging inflation.
The results identify 16 categories with prices rises exceeding inflation, in which consumers are willing to pay a premium, and 10 categories that lag inflation, in which consumers expect to pay a promotional price for a commodity product. For example, consumers will pay a premium for bottled water, but expect to buy carbonated soft drinks on promotion. Of FMCG brands that increased market penetration, meaning they added new buyers, 64 percent sold products at premium or even super premium prices.
Consumers are optimistic and continue to spend,
but they spend differently. How consumers spend
on essentials varies by FMCG category. And it
is important for brands to understand whether
their customers are willing to pay a premium for
perceived value or instead are willing to purchase
only on promotion.
Outside of FMCG, brands in categories like travel
and leisure have an opportunity to accelerate
growth as consumers shift their spending
from filling needs to satisfying wants. Chinese
consumers, especially in the larger cities, continue
to pursue their aspirations regardless of changes in
the economy and stock market.
Opportunities are available to both Chinese
and multinational brands. But Chinese brands
are gaining advantage. They have achieved
parity with multinationals in Brand Power, the
BrandZ™ metric of brand equity that correlates
with market share. Chinese brands gained market
share an average of 10 percent in 18 of the 26
FMCG categories studied in the report by Kantar
Worldpanel. Multinationals grew share in only
eight categories, averaging gains of 3 percent.
Implications for Brands
CONSUMER MOOD
■ Yes, it has strong impact
■ Yes, but it is small impact
■ No impact
■ Super Premium (Price Index >150)■ Premium (Price Index 120-150)■ Medium (Price Index 80-120)■ Low (Price Index <80)
28%
53%
15% 20% 13%
32%
7%
28%
24%
48% 44% 38%
19%
37% 36% 49%5%9%
55%
40%
CarHouse/
ApartmentVacation/
Recreation
■ Make planned purchases■ Postpone planned purchases■ Cancel planned purchases
Losing
Brands
Winning
Brands
CHINESE VS. MNC BRANDS
Chinese brands now equalmultinationals in Brand Power
Brand Power correlates with market share. Chinese brands gained market share an average of 10 percent in 18 of 26 FMCG categories studied in a Chinese shopper report by Kantar Worldpanel. Multinationals grew share in only eight categories, averaging gains of 3 percent.
Brand Power parity means that Chinese and multinationals are in many ways equally competitive. And the trend favors Chinese brands. In 2010, multinationals scored 115 in Brand Power and Chinese brands scored 89. Today both score 100, which is the average score.
The Brand Power score is derived from three components: Meaningful, consumers feel an affinity for the brand or think it meets their needs; Different, consumers view a brand as unique in some way, even trendsetting; and Salient, consumers think of the brand quickly when a purchase opportunity arises.
Chinese brands have achieved parity with multinational brands in Brand Power, the BrandZ™ measurement of brand equity. Over the past six years, Chinese brands strengthened in Brand Power, while the multinationals weakened.
01 > Introduction - Top Line Results TOP 100 Most Valuable Chinese Brands 2016
34 35
Examining these components reveals that Chinese and multinationals score the same in Brand Power for different reasons. Chinese brands now exceed multinational brands in Salience, but lag multinationals in Difference. Chinese and multinational brands are about equal in Meaningful. (Please see Part 2: Six Critical Observations for Building Brand Value.)
Chinese brands made this competitive progress in part because of the increased knowledge and sophistication
Chinese brands reach Brand Power parity with multinationals …Over the past six years, Chinese brands have strengthened in Brand Power, while the multinationals weakened.
Source: BrandZ™ / Millward Brown
Brand Power is the BrandZ™ measurement of brand equity; Brand Power average score = 100
… But consumers view Chinese brands as less DifferentChinese consumers describe multinational brands with characteristics like sexy and different, and view Chinese brands as friendly and kind.
Consumer view of Chinese and multinational brand characteristics across 16 categories.
Adventurous Assertive
Brave
Caring
Creative
Desirable
Di�erent
Friendly
Fun Generous
Idealistic In Control
Innocent
Kind
Playful
Rebellious
Sexy
Straightforward
Trustworthy Wise
… And the Chinese brand archetypes are less assertive than the multinationalWhen those 20 brand personality characteristics are combined into brand archetypes, consumers view Chinese brands as the Friend, for example, while multinationals become the Rebel.
Source: BrandZ™ / Millward Brown
Consumer view of Chinese and multinationals across nine categories
Chinese brands have momentum
in building Brand Power. They have
grown in Salience and now surpass
multinational brands, which are
weakening in Salience. Chinese brands
need to build on their Salience and
communicate how they are Different.
Multinationals need to halt the slip in
the Brand Power. Like Chinese brands,
multinationals will need to communicate
with consumers more effectively. They
need to rebuild Salience with marketing
communication that catches the
attention of Chinese consumers.
For multinationals, however, it may be
time to stress not how they are Different,
but rather how they are the same as
Chinese brands in the sense that they
understand the Chinese consumer, and
will help consumers build better lives for
themselves and their families.
Implications for Brands
of Chinese consumers who increasingly select brands for their value. Chinese brands overall have improved products and services and have effectively communicated in a way that builds awareness.
They have been less effective communicating their distinctiveness, however. In BrandZ™ research, Chinese consumers described Chinese and multinational brands according to 20 personality characteristics. They described multinational brands as
sexy, desirable and different, and the Chinese brands as friendly, caring and kind.
And when those 20 characteristics are combined into BrandZ™ brand archetypes, Chinese brands become the Friend or the innocent Maiden, for example, while multinationals become the Rebel or the Seductress. The less aggressive character of the Chinese brands makes being perceived as Different more difficult.
2010 2011 2012 2013 2014 2015
■ Chinese Brands■ Multinational Brands
■ Chinese Brands■ Multinational Brands
115 115 101 104 101
89100 100 96 99
100
Seductress
SexyDesirable
Dreamer
IdealisticDifferentCreative
Maiden
InnocentKind
Friend
FriendlyStraightforward
Rebel
Rebellious
Chinese
Brands
Multinational
Brands
21%1%1%
9%
8%
19%
22%
17%
10%7%
THE CHINESE DREAM
Individuals sustain confidence in realizing the Chinese Dream
Over the past four years, the Chinese Dream has become more deeply embedded in national life, not simply as a useful government slogan, but also as an idea embraced by the Chinese people as the expression of their hopes and expectations. This conclusion comes from BrandZ™ research into the attitudes and behaviors of the Chinese consumers who invest in the stock market.
The research, conducted after the two deep stock market declines in 2015, found that these individuals remain optimistic about the stock market, the economy, and the possibility of realizing the Chinese Dream. The research follows an earlier BrandZ™ examination of the Chinese Dream called, The Power and Potential of the Chinese Dream. (For more details, please visit brandz.com.)
In November 2012, Xi Jinping described a vision
of a nation, strong at home and internationally
respected, whose citizens enjoy the benefits of greater
prosperity. He called this vision the Chinese Dream.
01 > Introduction
36 37
Confidence in the Chinese Dream is strong despite stock market…Even following the two steep stock market declines in 2015, almost two-thirds of individuals who invest in the stock market feel confident or extremely confident that they will achieve the Chinese Dream during the next decade.
How confident are you that in the next 10 years you will achieve your expectation of the Chinese Dream?
Source: BrandZ™ / Millward Brown
■ Extremely confident■ Fairly confident■ Don’t know ■ Only somewhat confident■ Not confident at all
5%
30%
2%
21%
42%
Consumers are likely to favor brands that help advance the Chinese Dream by offering quality products and services that improve lives. These offerings not only help realize the Chinese Dream, they elevate the view of China as a producer and marketer. This burnished image of Brand China facilitates overseas business growth.
The new research report, Unmasking the Individual Chinese Investor, finds that the top three aspirations of Chinese havenot changed much since the earlierresearch, in 2014. They are: a good life for my family; live in a powerful country; and be healthy. The desire for a good life increased in importance. Almost two-thirds of Chinese investors called it the single most important aspect of the Chinese Dream, compared with 54 percent of respondents in 2014.
And the Dream resonates, especially among young people, according to the recent report. (For more details, please visit Brandz.com.) Compared with 2014, people are more likely to say that the Chinese Dream, as articulated by the government, represents their own opinions. In 2014, two-thirds of respondents said they believed that the Chinese Dream strengthens social cohesion. Now, three-quarters of respondents agree with that statement.
Similarly, in 2014, 65 percent said that the Chinese Dream is the dream of the Chinese people. Now three-quarters agreed with that statement. (Note: The respondent groups differ.) Almost two-thirds are confident that they will achieve the Chinese Dream during the next decade. Less than a third are only somewhat confident about achieving the Chinese Dream. And only 5 percent completely lack confidence in realizing the Chinese Dream.
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
38 39
… A good life for self and family remains most important…
… As the Chinese Dream evolves from political slogan to personal conviction
The priorities of the Chinese Dream remain fairly consistent over time for Chinese individuals. A good life for the family tops the list for almost two-thirds.
Chinese Dream has become a unifying theme now more deeply embedded in national life, not simply a useful government slogan, but also as a theme embraced by the Chinese people.
Source: BrandZ™
2015: Select five components of the Chinese Dream that are most important to you.
2015: To what extent do you think these descriptions of the Chinese Dream represent your opinions?
Fundamentals of the Chinese
Dream have not changed over
the past four years. People want
to become wealthier and able to
afford more creature comforts.
But attitudes toward aspects of the
Dream seem to be impacted by
events and personal experience.
While the components of the
Chinese Dream remain consistent,
their relative importance is
somewhat fluid. The importance
of home ownership has declined
somewhat, for example, possibly
because more people now own
homes and those that do not may
be waiting for a better time to buy.
Consumers are likely to view more
favorably brands that align with the
Chinese Dream, at least implicitly.
These brands demonstrate that
their mission is not only about
making a profit. Rather, in making
a profit, these brands create the
products and services that enable
Chinese individuals and families
to improve their lives, and China
to develop as a stronger, more
prosperous and equitable nation.
Implications for Brands
THE CHINESE DREAM
■ A good life for my family■ Live in a powerful country■ Be healthy■ Sustainable economic development■ Financial security■ Have the same opportunities as everyone else■ Good opportunity■ To be able to retire comfortably■ Pursuit of happiness■ Be successful at work■ Individual freedom■ A good job■ Home ownership■ Rags to Riches■ Be richer■ Achieve more than parents’ generation■ Become famous
65%54%
51%50%
39%39%
36%31%
29%25%
19%
76%75%
73%73%
72%72%
70%68%68%68%
64%
14%13%12%
11%9%
3%
■ Chinese Dream strengthens the social cohesion
■ Chinese Dream is the dream of Chinese people
■ Chinese Dream makes me feel confident in the development of this country
■ Chinese Dream makes the country more energetic
■ Chinese Dream makes me feel confident in my future
■ Chinese Dream and my personal dream are in concordance
■ Chinese Dream has brought positive changes to our social environment
■ Chinese Dream attracts people from other counties to come and fulfill their own dreams
■ Chinese Dream’s values extend beyond national boundaries
■ Chinese Dream is the dream of the government
■ Chinese Dream is demonstrated by China’s social system
Photo by David Roth
XINJIANG
MONGOLIA
KYRGYZSTAN
INDIA
NEPAL
BHUTAN
BANGLADESH
MYANMAR
NORTH KOREA
SOUTH KOREA
JAPAN
RUSSIA
RUSSIA
VIETNAM
LAOS
QINGHAI
SICHUAN
YUNNAN
XIZANG
GANSU
NEI MONGOL
SHAANXI
SHANXI
HENAN
SHANDONG
HEBEITIANJIN
LIAONING
JILIN
HEILONGJIANG
HUBEI
HUNAN
GUIZHOU
GUANGXI
JIANGXI
JIANGSU
FUJIAN
ZHEJIANG
ANHUI
GUANGDONG
CHONGQING
BEIJING
SHANGHAI
ECONOMY, DEMOGRAPHICS, AND CONNECTIVITY
01 > Introduction
40 41
TOP 100 Most Valuable Chinese Brands 2016
9.6 MILLION SQ. KM. (3.7 MILLION SQ. MI.)
LAND AREA2
(World’s fourth largest nation, slightly smaller than the US)
1.37 BILLION
TOTAL POPULATION
POPULATION BY AGE2
US $10.355 TRILLION
GDP
GROSS NATIONAL SAVING FOREIGN DIRECT INVESTMENT
(Over half the US GDP and over two times larger than Japan’s)
(2014 % of GDP)2
Figures are from the World Bank for 2014 unless otherwise noted. The 2015 population, GDP growth rate, and percent of urban population are from the National Bureau of Statistics of China. 1 China Internet Network Information Center (CNNIC) as of June 20152 CIA World Fact Book, 2015 estimates unless noted
US $7.590 BILLION
GDP PER CAPITA
(somewhat less than Bulgaria)
US $2.3 TRILLION
EXPORTS2
(2014, number one worldwide, followed by the EU and the US)
20050
3%
15%
12%
9%
6%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
GDP RATE OF GROWTH
11.4%
2005
US $8,000
US $7,000
US $6,000
US $5,000
US $4,000
US $3,000
US $2,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
GDP PER CAPITA GROWTH
$1,740 $2,082$2,673
$7,590
$3,441$3,800
$4,515
$5,574$6,265
$6,992
12.7%14.2%
9.2%7.8%
9.6%
10.6%9.5%
7.7% 7.3% 6.9%
48.5%
China
$289.1 Billion
China
32.2%
India
$33.9 Billion
India
19.2%
EU
$22.9 Billion
Russia
39.1
Russia
15.6%
Brazil
$96.9 Billion
Brazil
18.8%
US
$131.8 Billion
US
1981 1991 2001 2011 2012 2013 2014 2015
10%
20%
30%
40%
50%
60%
0%
URBAN POPULATION (Percent of total population)
27%37%
20%
51% 52% 53% 54% 56.1%
65 years and over
55-64 years
25-54 years
15-24 years
0-14 years
10.01%
11.14%
47.95%
13.82%
17.08%
MEDIAN AGE2
36.8
China
27.3
India
31.1
Brazil
37.8
US
40.4
UK
668 MILLION
186 MILLION
594 MILLION
480 MILLION
TOTAL INTERNET USERS
RURAL INTERNET USERS
TOTAL MOBILE INTERNET USERS
TOTAL SMARTPHONE USERS
48.8% Internet
Penetration
88.9% Internet Users
on Mobile
CROSS CATEGORY TRENDS
Mobile transforms Chinese market, as brands face challenges of growth
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
42 43
Mobile has become an integral part of everyday life for Chinese consumers. On mobile, they talk, text, shop, order food, hail taxis, book travel, trade stocks, pay for products and services, deposit money into their bank or transfer money to friends. These activities happen on mobile in other countries and regions, but not to the same extent. In most places mobile is an option; in China it seems autonomic. It is an expression of the Chinese Dream and a pathway to its fuller realization. About half of all e-commerce in China happens on mobile compared to just over a fifth in the US and around a third in the UK.
The implication for brands is clear: consumers are on smartphones at least two hours a day, according to
MOBILEMillward Brown’s AdReaction study, and mobile is the place to engage them. But it is also important for brands to understand why mobile is such a large phenomenon, how to best use mobile, and when mobile may not be the best medium. Numbers tell much of the story. Internet users in China reached 668 million in June 2015 and 549 million of those users, almost 90 percent, accessed the Internet on a mobile device.
In other words, the number of Internet users in China is more than twice the population of the US and almost the population of Europe, and most of those individuals are walking around with a smartphone.
These numbers alone would appeal to any brand marketer, but there is more. The total number of Internet
users represents less than half of China’s population of over 1.3 billion. And penetration is relatively low in rural China, where the Internet users make up just over a quarter of China’s total Internet users. A big brand opportunity is about to become bigger.
MOBILE USE SEEMS AS
NATURAL AND NECESSARY
AS BREATHING
Like many national markets, China is not homogenous. But it is distinct in several ways. First, the population of over 1.3 billion is dispersed in cities and villages across a landmass almost the size of the US. Initially, it was sufficient to reach the rising middle class in the coastal cities. But now buying power, and interest in brands, is increasing throughout the country.
Second, many countries have a generation gap, a normal difference in attitudes between the young and their parents. In China, this difference is exaggerated because parents experienced a different China than the one in which their children grew up. Parents remember scarcity and limited
MEDIAaccess to western goods. Anyone over thirty has experienced relative abundance and overwhelming online shopping options.
Third, reaching these varied audiences – rural, urban, younger and older – is tricky. Smartphones are becoming ubiquitous, but TV remains the preferred medium for watching ad videos, especially in rural China. The only certainty is the primacy of digital, which now accounts for about half of all media spending, up from only 11 percent in 2010. The shift to digital will accelerate even more as the government drives its Internet+ agenda aimed at transforming the character of the economy from industrial China to connected China.
NEVER A SIMPLE MEDIA MARKET,
CHINA NOW IS MORE
COMPLICATED
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
44 45
For Traditional Chinese Medicine (TCM) products, being Chinese is the key product advantage, of course. But Chinese brands expanding internationally increasingly emphasize their global ambitions rather than their national provenance. This is often the case in the appliance and technology categories, which are accelerating their shift to global brand builders from their earlier role as Original Equipment Manufacturers (OEMs), makers of products that were marketed under western brand names.
Haier, the manufacturer of white goods and other appliances is in the process of acquiring the appliance division of General Electric. Hisense appliances are widely available in the US. Huawei sold 100 million branded smartphones in 2015, many of them in Europe. Smartphone maker ZTE sponsors five NBA teams in the US. It is 10 years since Lenovo purchased the IBM personal computer division, and two years since its purchase of Motorola Mobility from Google. Today, 68 percent of Lenovo revenue comes from outside China.
The international presence of Chinese brands includes other categories, such as cars, where export proceeds region by region, first to emerging markets in Southeast Asia, Africa or Latin America. The car brand Changan, which appears for the first time in the BrandZ™ China Top 100 this year, is expanding exports. The government of China is aggressively facilitating trade with initiatives like the One Belt, One Road to create a network of trading partners, a modern version of the Silk Road. In the meantime, Chinese Internet brands, like Alibaba and JD.com, and Chinese social networks like WeChat, are raising international awareness of, and access to, Chinese products.
Tencent, the Chinese Internet portal and gaming leader, is exporting its online games, trying to build a large and revenue-driving global audience. A Chinese conglomerate recently bought Brookstone, the US retailer of consumer electronics and gadgets. The brand will become another sales channel for Chinese brands, perhaps featuring niche products from Chinese start-ups like those producing smart watches to compete with Apple and Samsung.
GOING GLOBAL
BRANDS EMPHASIZE
GLOBAL STATURERATHER THAN
CHINESE PROVENANCE
CROSS CATEGORY TRENDS
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
46 47
STAGES OF GROWTH
As a brand grows and pursues new opportunities it becomes important to periodically do an identity check, to see how much the brand has shifted from its original core idea or mission, and to what extent the evolved brand matches the needs and desires of existing and prospective customers.
In general, the more faceted a brand becomes, the more difficult it becomes to summarize and coherently communicate the brand idea. Companies like Alibaba and Tencent, which have built large platforms, or ecosystems, with many components, face this challenge of clearly articulating a unifying idea. It is a symptom of success.
As they manage brand portfolios in the virtual world, Alibaba and Tencent face some of the challenges that organizations like Unilever and P&G confront in the physical world. Global ambitions of the Internet giants add urgency because clarity is a prerequisite for success when introducing a brand to consumers outside of the home market.
GLOBAL AMBITION REQUIRES CLARITY OF BRAND IDENTITY
Chinese consumers are purchasing international brands, but less for the status or bling and more for assurances of quality and safety at affordable prices. Status motivated purchasing when international brands first proliferated a decade ago. Consumers with newly obtained disposable income became giddy from the available choice. Status is still a purchase factor but brand provenance, history and storytelling are becoming more of a factor in brand choice, particularly in luxury.
INTERNATIONAL BRANDS
In addition, a lot of shopping shifted from the physical world to cyberspace, where, in part because of the government’s establishment of cross border e-commerce zones, foreign goods are available at lower prices with faster delivery, along with greater assurance that products are genuine, not fake.
This development is an opportunity for international brands to enter or expand throughout China by being present on any of the leading Internet marketplace sites. The increased availability of international brands is another reason for Chinese brands to continue to improve product quality and communicate Meaningful points of Difference.
CONSUMERS DESIRE OVERSEASBRANDS, BUT FOR
NEW REASONS
CROSS CATEGORY TRENDS
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
48 49
BEYOND O2OThe retail lexicon cannot keep up with the speed of change. A few years ago, omnichannel described the goal of being present in a consistent way everywhere and all the time. Then O2O required coordinating the offline and the online brand manifestations so that all customer engagements happened seamlessly. Bricks and mortar brands drove much of this conversation as they formed their online counter lives. More recently, the dynamic is also working in reverse, as Internet brands attempt
to build up their offline presence. E-commerce giant Alibaba purchased almost a 20 percent stake in Suning, the consumer electronics retailer that operates about 1,600 stores. The trend goes beyond China, which is relatively advanced in harmonizing brand activity in the physical and virtual worlds. Amazon opened its first bricks and mortar bookstore in November 2015, in Seattle. But in China, compared with the US, the potential for new physical retail space is much greater.
VIRTUAL BRANDS SEEK PHYSICAL
PRESENCE
After giving birth to a strong brand, the complementary challenge is protecting it. Brands are vulnerable. As they grew, they attract more attention, particularly on social media. Several of China’s most valuable and influential brands experienced these growing pains. Government regulator charges of counterfeit merchandise on Taobao hurt the reputation of the Alibaba online market. Baidu, China’s largest search engine, faced
GROWING PAINS
allegations of fraudulent activity on its site. Online travel leader Ctrip blamed vendor partners for incidents involving fraudulent tickets. Corporate reputation has declined in the consumer mind, as measured by RepZ, a BrandZ™ metric. There is no substitute for integrity. But in an imperfect world, with the intense radar of social media, building, protecting, and repairing brand reputation sometimes requires the intervention of communications experts.
BIRTHING A BRAND BEGINS
A LIFETIME OF RESPONSIBILITY
CROSS CATEGORY TRENDS
TAKE AWAYS
12 Prescriptive ideas for buildingbrand strength in today’s China
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
50 51
Mobile is ubiquitous in China, a way of life, not only a medium of communication. Brands need to be present on mobile not simply as purveyors of products and services, but as partners helping consumers with daily living. The brand in all its aspects needs to be represented on mobile: advertising and marketing, social communication, shopping, shopper marketing, purchasing, and payment. The brand question in the West might be, what is our strategy for mobile? In China, with some overstatement, mobile is the strategy.
Brands that focus exclusively on their products or services operate from too narrow a vision. Consumers believe in the pursuit of what the government has called the Chinese Dream, the effort to create a China that is more prosperous and equitable at home and more highly regarded abroad. Brands play a role in the realization of this Dream. Consumers are likely to feel more favorably toward brands that contribute to the national welfare with products and services that are genuine, safe, and exist in harmony with the environment.
(For more information, please see the BrandZ™ report, The Power and Potential of the Chinese Dream, at www.wpp.com/wpp/marketing/brandz/the-chinese-dream.)
Chinese brands have rapidly increased market share across most fast moving consumer goods (FMCG) categories. They accomplished this feat at the expense of multinationals. Several factors drove this change, not least of which was heavy media spending to raise awareness. But now that many Chinese brands have become well known, sustaining sales requires also being Different in a Meaningful way. Chinese brands have been less effective at explaining how they are functionally or emotionally unique. That is the critical next step.
Innovation does not necessarily mean total reinvention. Innovation means introducing something new, a product or packaging, for example, which did not exist before. Innovation is not simply an update, and it is not a one-off. Innovative brands introduce new ideas with enough regularity to create a sense of anticipation among customers. Innovation helps build brand value and it correlates with market penetration.
Trust is an effective way to build Difference in China. Rebuilding brand Trust has been a global issue since the financial crisis of 2008 and 2009. In China, product performance and safety issues over the past several years eroded Trust. But Trust is an important differentiator in China. For consumers worldwide, brands that are seen as creative and desirable are mostly likely to be viewed as Different. In China, Trust strengthens Difference.
The BrandZ™ China Top 10 grew 3 percent year-on-year in value, while brands ranked 11-to-100 increased over 30 percent. Because of their size and impact, Top 10 brands draw a lot of the media’s attention. But with additional investment in creative messaging and effective activation, energetic brands lower in the ranking have an opportunity to greatly raise their profile among consumers and investors, which is increasingly important.
1 42 53 6Mobilize Advance the Chinese DreamCommunicate Difference InnovateBuild Trust Raise the profile
01 > Introduction TOP 100 Most Valuable Chinese Brands 2016
52 53
For a while, Chinese brands prospered by creating products that were good enough for the local market or somewhat better for export. Those days, for the most part, have past. Chinese consumers want, can afford, and are willing to pay for more than good-enough products. Global consumers are becoming more familiar with Chinese brands, and purchasing them.
More pragmatic now, Chinese consumers expect promotional pricing in certain FMCG categories like household cleaners. In these categories, when they find little differentiation, consumers treat products like commodities and select the brand that’s on promotion. Brands need to find and communicate a valid point of differentiation.
Except for traditional Chinese medicine (TCM), or Baijiu, the Chinese white alcohol, Chinese provenance is not of primary importance to overseas consumers. In overseas markets, Chinese brands need to raise awareness and build positive impressions. They need to offer products of global quality, while adjusting for local desires and preferences. Prominence abroad earns a dividend at home when Chinese consumers regard the brand as global rather than local.
Chinese consumers spend the greatest portion of their screen-watching time on their mobile phones. Many FMCG brands are shifting investment to digital for more targeted and effective reach. In other categories, where mass appeal is still paramount, brands maintain spending levels in TV and other traditional media. TV continues to be a central source for trusted information in smaller cities, and media there is more affordable than in large markets like Shanghai or Beijing.
Despite the economic slowdown and the stock market fluctuations, consumers are willing to pay a premium, when it is justified, especially for FMCG categories like personal care or heathcare. Outside of FMCG, more Chinese brands are adding premium-priced offerings, often less expensive than equivalent items from multinationals. This opportunity for local Chinese brands presents a challenge for multinationals. It is another example of the increasing parity of Chinese and multinational brands in the mind of the Chinese consumer.
Chinese brands have invested heavily to increase Salience, or awareness. And that investment has paid off. In BrandZ™ research, Chinese brands exceed multinationals in Salience. In other words, when a Chinese consumer is considering a purchase in a particular category, a Chinese brand is now more likely to come to mind. At that moment, being selected for purchase depends on having a compelling point of Difference, preferably sufficient to command a price premium. Chinese brands still lag multinationals in Difference. Building Difference requires the right strategy, expressed in a creative big idea, and communicated with a well-conceived media plan.
7 108 119 12Be best in class Expect pragmatic shoppersBe global, sell local Mix media effectivelySeek premium when justified Marry great creative
with effective media
TAKE AWAYS
5554
Running – the most popular sporting activity in China in 2015. Surprised? Well, there are a number of reasons for the surge in its appeal.Changing demographics are partly responsible: compared to ten years ago, the population of young and unmarried people in China has increased significantly. Given that the majority of avid runners are youthful and single, the rise in the number of joggers is a natural consequence. And of course, the benefits to health and appearance from running are of significant appeal. What body conscious young man or woman doesn’t want to look like a lean, mean running machine?Then there’s the fashion aspect. Running shoes, jackets and trousers have become statement pieces of clothing
in China. They carry aspirational logos such as Nike, Adidas and New Balance, so people naturally gravitate towards purchasing them. Having purchased them, you might as well use them.Running is a simple (although not always ‘easy’) activity – and if you don’t do it at the gym, it’s free. Most runners in Shanghai tend to go running after work at night. It’s increasingly sociable too; with the advent of WeChat groups and Nike Plus - runners can share their experiences with others and use social networks to post and boast of their achievements. (That’s ‘PB’ in runners’ parlance).
HAIDONG GUANStrategy DirectorGrey [email protected]
TRENDS
THE HOTTEST SPORT IN CHINA
TOP 100 Most Valuable Chinese Brands 2016
OUR INSIGHTSYears from now, 2015 will be recognized as a major inflection in the evolution of brands in China, the year when a handful of loosely connected events in the political and economic arenas interacted to change the relationships of Chinese brands with both owners and consumers.
This pivot began with the sudden, sustained undermining of the market for luxury products by the anti-corruption campaign of the Xi Jinping administration. Brands that had dominated consumer desires for a decade became less desirable.
Yet the size and purchasing power of the middle class continues to grow explosively, and consumers are increasingly confident in their ability to choose, based on individual tastes and context. Combine this with Chinese management styles
in non-SOE companies favoring semi-autonomous and highly adaptive business units, and the belief that that speed to market is more important than product perfection.
The result is a systemic shift towards a rapidly evolving kaleidoscope of niche brands and brand ecosystems, adapting to consumer and market needs in close to real time.
This will prove a boon for Chinese consumers, and will change the worldview of China from that of fast follower to trend leader. For agencies, this will mean finding ways to align and embed with clients even more intimately, to co-create communications and keep up with the pace of change.
PETER MACKExecutive [email protected]
FISHER YUBrand Strategy [email protected] Associates
SHIFT
THE COMING EXPLOSION IN CHINESE BRANDS: LET A THOUSAND FLOWERS BLOOM
While many are impressed by the gigantic transaction numbers (which keep growing every year), few make serious efforts to understand the brand drivers behind the figures. We are now entering the next phase of e-commerce – digital shopping
has become a daily practice for Chinese consumers, and mobile connectivity makes such shopping possible in any place, at any time. With this, the e-commerce marketing paradigm has shifted to brands and platforms that can offer a total brand experience rather than a narrow focus on sales and aftersales services. There
are two key strategic initiatives being taken by leading brands:
1. Integrated experience across all touch-points and channels: Innovative brands are overcoming the online and offline barriers to create a seamless and immersive experience. For example, Sephora Beauty Workshop has 12 individual stations equipped with USB ports, iPads, and WiFi, so customers can look at Sephora’s existing Skin IQ, Fragrance IQ, and Color IQ technologies and watch beauty tutorials to enjoy an indulgent, digitized and personalized shopping experience. Similarly,
the InterContinental hotel group is leveraging VR and 3D imaging to bring the on-property, in-room experience alive for hotel guests when they plan a booking.
2. Continuous engagement along the entire consumer journey: The old concept of the top-down marketing funnel is not working any more as consumers are shopping everywhere, all the time. The rapid development of e-commerce shortens the physical distance between brand and consumer. However, the emotional distance between brand and consumer is also contracting as people are now consuming the entire brand experience over a much shorter interval. Winning brands are focusing on designing an experience along the consumer journey versus creating a brand experience impulse (awareness-to-preference). For that reason, we see brands (P&G, L’Oreal et al) heavily investing in building a brand-owned, digital eco-system (rather than building on third-party platforms).
OgilvyOne believes that upgrading creative and content excellence in line with a “continuous, omni-channel” commerce strategy will help brands to win the future of digital commerce.
MIKE ZHUHead of eCommerce
and AnalyticsOgilvyOne Shanghai
INTEGRATION
CREATING TOTAL BRAND EXPERIENCE
BEYOND E-COMMERCE TRANSACTIONS
As revealed in the latest Kantar Worldpanel report, the FMCG retail market in China grew only 5.4 percent
in 2014 compared with 11.8 percent three years ago. Conversely, online sales rose 34 percent in the same year. Shoppers who merely switched from offline to online channels are estimated to have generated approximately 40 percent of e-commerce growth in
2014. The disappointing performance of physical retail, together with the rapid growth of e-commerce, has led to a general pessimism towards the fate of the physical retail store.
However, a recent study from A.T. Kearney reveals that 95 percent of retail sales are still captured by retailers with a bricks-and-mortar presence. Clearly, the physical store
still plays a critical part in the shopping experience for retailers, brands and consumers. Even the giant of online bookstores, Amazon.com, realized the importance of physical retail and opened its first ever Amazon Books (in Seattle) in October this year, putting all its online success formulae into the physical environment, delivering a complete O2O brand experience for its consumers.
So, retail needs to take a new form. Retailers must embrace the hyper-connected consumers of today, and create a personalized, multi-device, empowering and hassle-free omni-channel shopping journey, resulting in a delightful brand and retail experience before, during and after store visits. The retail store can no longer be just a physical sales floor; it has to incorporate the best of online shopping in store.
BARRY LEUNGPresident
Always Marketing Services, [email protected]
EVOLUTION
RETAIL NEEDS TO TAKE A NEW FORM
CH I N A ’ S A P PA R E N T C H AO S A N D F R E N E T I C E N E RG Y
B E L I E A B A S I C H A R MON Y T H AT G U I D E S P ROG R E S S .
02SIX CRITICAL
OBSERVATIONS FOR BUILDING BRAND VALUE
1. CONSUMER INSIGHT
2. DIFFERENCE
3. CORPORATE REPUTATION
4. INNOVATION
5. DIGITAL COMMUNICATION
6. CREATIVE QUALITY
OUR INSIGHTS
58 59
1. CONSUMER INSIGHT
Price matters, but consumers now seek quality and premium
If required to cut back, people would start with luxury and entertainment. Necessities, like food, would experience limited spending reductions. Investors are also reluctant to cut back on their telecommunication expenses, perhaps a necessity, and the cost of education for themselves and their children. Spending cutbacks are more moderate among higher income people.
These spending considerations rest on other significant and long-term shifts in consumer purchasing patterns. Chinese consumers are shopping less frequently, but spending more on each trip. A study of 26 categories by Kantar Worldpanel found a “new normal”, where the growth rate of Fast Moving Consumer Goods (FMCG) purchasing is flattening, but consumers are willing to pay more for certain products.
Remarkably, given the slowdown of China’s economy and the extreme ups and downs
of its stock market, Chinese consumers continue to spend, almost as if these
market changes are part of normal life. BrandZ™ research about the attitudes and
behaviors of individual Chinese investors, conducted autumn 2015, found that people
remain optimistic and plan little change in their spending across most categories.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
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Chinese consumers continue to spend despite the stock market…Spending remains relatively unchanged, especially on basics, despite the stock market declines.
How did the two stock market declines affect your spending in these categories?
Source: BrandZ™ Unmasking the Individual Chinese Investor report
Luxury Items
Entertainment
Dining Out
Healthcare and Exercise
Personal Electronic Devices
Clothing and Fashion
Transportation
Personal Care
Telecommunications
Household Appliances
Groceries
Household Utilities
Education (Adults and Children)
6% 57%
13% 38%
20% 30%
12% 29%
17% 28%
17% 27%
14% 26%
12% 24%
9% 21%
13% 13%
14% 12%
18% 11%
20% 10%
■ Increase Spending■ No Change■ Decrease Spending
1. CONSUMER INSIGHT
Partially in reaction to the food scandals that shocked China several years ago, consumers are willing to pay a premium for safety assurance in certain categories, particularly those related to health and personal care. In less sensitive categories, consumers shop for sales. Consumers will pay a premium for bottled water, for example, but expect to buy carbonated soft drinks on promotion.
Consumers are becoming smarter. In categories where they do not perceive
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
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a useful difference between brands, they shop for price. The ability to command a premium is not about category alone, however. Category influences – but does not exclusively determine – a product’s destiny. Brand plays an important role, too. Brands that score highest in Different, the BrandZ™ measurement of how a brand is unique or trendsetting, can command price premiums that are 58 percent greater than the brands that score lowest in Different, according to BrandZ™ research.
… And consumers are willing to pay more in certain categories… … But brand Difference strongly influences willingness to pay a premium
Chinese consumers are more willing to pay a price premium in categories that relate to the health and wellbeing of themselves and their families.
Chinese brands that score highest in Different, the BrandZ™ measurement of a brand’s ability to be unique and set trends, can justify charging a premium that is 58 percent higher than brands that score lowest in Different.
Source: Kantar Worldpanel Source: BrandZ™
Note: “Promotion” is perception of shoppers
Premium Index: A brand’s ability to charge more than brands in the same category. Average = 100Different: BrandZ™ measurement of a brand’s ability to be unique and set trends. Average = 100. Top third are Most Different, bottom third are Least Different.
Chinese consumers are changing in
their attitude and behavior. In attitude,
they remain optimistic, despite
economic and stock market challenges,
and they intend to keep spending. At
the same time, they are becoming more
sophisticated as consumers, which is
reflected in their purchasing behavior
and shifting spending priorities
The rate of spending on FMCG
products is slowing. Consumers seek to
buy commodity products on promotion
but are willing to pay a premium for
other items, usually related to personal
care and health. And they devote
a larger portion of income to non-
essentials like travel, entertainment, and
other experiences.
A brand, in just about any category, can
command premium prices with product
innovations that can satisfy this need
for a special experience. In addition,
Chinese consumers are diverse. The
more affluent consumers are willing to
pay a premium for some products that
many consumers might expect to buy
on promotion. And the premium prices
of Chinese brands are still less than the
luxury prices of many multinationals.
Implications for Brands
0%-5%
0%
10%
20%
30%
40%
COMMODITIZATION
BR
AN
D P
RO
MO
TIO
N P
ERC
ENT
PREMIUMIZATION
AVERAGE ANNUAL SELLING PRICE GROWTH PERCENT
5% 10% 15% 20%
Toilet TissueFacialTissue
Fabric Softener
Shampoo
Baby Diapers
Infant Formula
Hair Conditioner
Toothpaste
ToothbrushSkin Care
Instant NoodlesColour Cosmetics
RTD Tea
Biscuits
Juice
Milk
Yoghurt
Bottle WaterBeer
Candy
Personal Wash
Kitchen Cleaner
CSDChocolate
Chewing Gum
Premiumizing categories
Commoditizing categories
Fabric Detergent
84 Least Different
Brands
133 Most Different
Brands
+ 58%
2. DIFFERENCE
Now Salient, Chinese brands must communicate Difference
Since 2014, Chinese brands have done a good job improving their Salient scores with media investment that significantly raised brand awareness and drove sales, as documented in research by Kantar Worldpanel, which found that Chinese brands gained market share over multinationals in 18 of 26 fast moving consumer goods categories.
Chinese brands continue to struggle with being
seen as Different, one of the three components of
Brand Power, the BrandZ™ measurement of brand equity. Different means
consumers view a brand as unique in some way, even
trendsetting. The other Brand Power components
are: Meaningful, consumers feel an affinity for the brand
or think it meets their needs; and Salient, consumers
think of the brand quickly when purchasing
opportunities arise.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
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In this changed competitive environment it is important that both Chinese and multinational brands maintain Salience, but Salience alone will not sustain competitive advantage. It also is necessary to explain how a brand is Different and Meaningful; why it is unique and worthy of purchase.
Chinese brands grew more Salient, but declined in Different…
... And multinational brands lead Chinese brands in being seen as Different
Of the three components that comprise Brand Power, the BrandZ™ measurement of brand equity, Chinese brands rose in Salient, remained flat in Meaningful, and declined in Different.
Multinational and Chinese brands are comparable in the Meaningful, a component of Brand Power, the BrandZ™ measurement of brand equity. Chinese brands also lead in Salient, but trail multinationals in Different.
Changes in Brand Power component scoresMeaningful, Different, Salient average score = 100Based on BrandZ™ Top100 most valuable Chinese brands
Meaningful, Different, Salient average score = 100Based on 179 brands across 11 categories in 2015
Source: BrandZ™ / Millward Brown
Source: BrandZ™ / Millward Brown
Chinese brands remained flat in Meaningful and declined in Different, during the past three years. Multinationals also remained relatively flat in Meaningful and continue to score substantially higher than Chinese brands in Different. Multinationals scored 106 in Different, a good score, while Chinese brands scored 90, well below the average of 100.
The wide disparity is significant. It means that Chinese brands are at a disadvantage when trying to distinguish themselves, either functionally or emotionally, especially from multinationals, which Chinese sometimes view as Different simply because they are foreign. As Chinese brands improve their Different scores, however, multinationals will need more than provenance alone to build Difference.
Once brands establish ways in which they are Different in Meaningful ways from the competition, they need to communicate not only to maintain Salience, but also to explain how they are Meaningful and Different, and why those benefits help consumers.
■ 2014■ 2015 ■ 2016
■ Multinational Brands■ Chinese Brands
Meaningful Different Salient
117 114 113
115 109 118
117 107 124
Meaningful Different Salient
98 106 94
96 90 99
2. DIFFERENCE
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
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Brands that are Meaningful, Different, and Salient grow share fasterBrands grow market share faster when they are strong in all three components of Brand Power: Meaningful, Different, and Salient.
Source: BrandZ™ / Millward Brown
Certain brand characteristics correlate with being Different…
… Being Trustworthy especially differentiates brands in China
In China, the four personality characteristics that consumers most associate with being Different are: Creative, Desirable, Trustworthy, and Wise.
Trustworthy correlates more closely with Different in China, compared with other regions of the world.
% correlation between BrandZ™ brand characteristics and Different
Correlation between Different index and brand characteristics. It is a spectrum showing the color coding from highly positive correlation to highly negative correlation
Source: BrandZ™ / Millward Brown
It is not a question of being Different just for the sake
of being Different. There are benefits associated with
being Different. Brands seen as Different are more likely
to command a price premium, for example.
A first step is to develop the brand personality
characteristics most associated with being seen
as Different. BrandZ™ analyzes brands worldwide
according to 20 personality characteristics. In China,
the four personality characteristics that consumers
most associate with being Different are: Creative,
Desirable, Trustworthy, and Wise.
In most of the world, Creative and Desirable correlate
most closely with Different. But not in China; in China,
Trust correlates most closely with Different. It may
be that because the product safety scandals in China
fomented such distrust in brands, Trust is the strongest
lever for being seen as Different.
After establishing Difference, the next step is
communicating it. Chinese brands usually establish
awareness, first. It is more effective to establish the
meaningful difference before building awareness.
Brands that develop all three aspects of Brand Power,
or brand equity, increase market share more quickly.
Implications for Brands
Creative
Trustworthy
Wise
Desirable
Strong in Meaningful, Different, Salient
Weak in Meaningful, Different, Salient
5% 10% 15% 20%
48%
41%
65%
41%
Adventurous
Global Asia EuropeNorth
AmericaSouth
America China
Assertive
Brave
Caring
Creative
Desirable
Di�erent
Friendly
Fun
Generous
Idealistic
In Control
Innocent
Kind
Playful
Rebellious
Sexy
Straightforward
Wise
Trustworthy
Highly positive Highly negative
% Growth in Survey-Based Market Share
3. CORPORATE REPUTATION
Decline in CorporateReputation impactsboth multinationaland Chinese brands
The good news is that the erosion of Trust following the food scandals of a few years ago has stabilized. The bad news is that Corporate Reputation continues to decline. Trust alone strengthens a brand, but a trusted brand surrounded by the fortifying power of Corporate Reputation provides greater protection from the unpredictable vicissitudes of the marketplace. Trust in a brand is firmer when its corporate parent has a reputation for integrity and social responsibility.
The rebalancing of China’s economy is not only about slower growth, it also pertains to the changing expectations that consumers have about the brands they choose and the organizations that own those brands. More affluent and sophisticated, Chinese consumers seek not only price, but also value. And the calculus of value increasingly includes products that are safe and socially responsible.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
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… SOEs felt the impact of public distrust… … And both Chinese and multinational brands suffered reputation loss
Consumer impressions of two SOEs, Sinopec and PetroChina, became more negative, impacting Corporate Reputation and resulting in a decline in RepZ score, although both brands still score relatively high, 125 and 126, respectively. Chinese consumers do not seem to differentiate between Chinese and
multinational brands on the topic of Corporate Reputation, which is declining at about the same pace in both instances.
Changes in RepZ scores and brand imagery 2013 to 2015. Based on BrandZ™ analysis of brand personality characteristics, and RepZ, the BrandZ™ measurement of Corporate Reputation. Average RepZ score = 100
Decline in RepZ sccore
RepZ, the BrandZ™ measurement of Corporate Reputation. Average RepZ score = 100
Source: BrandZ™ / Millward Brown Source: BrandZ™ / Millward Brown
Corporate Reputation declined across categories in China…Corporate Reputation declined to below average over the past several years, as consumer reaction to corporate misdeeds circulated widely and rapidly on social media.
RepZ is a BrandZ™ measurement of Corporate Reputation based on a composite of four factors: Success, Fairness, Responsibility, and Trustworthiness. Average RepZ score = 100RepZ scores for 16 categories 2010 vs. 2015
Source: BrandZ™ / Millward Brown
2010
Average
2011 2012 2013 2014 2015
100 101101101
9897
101 105
100 105
101 105
99 106
90 117
87 124
Arrogant
Arrogant
Dishonest
Dishonest
Uncaring
Uncaring
-20
-22
■ 2013■ 2015
■ Multinational Brands■ Chinese Brands
2010 2011 2012 2013 2014 2015
102 101 101 101 98
97
97
99 101 100 101 98
Brands have a major opportunity
to improve Corporate Reputation
by contributing more to Chinese
society and communicating more
about their contributions. They
can begin by focusing on any of
the four RepZ™ components.
Strong Corporate Reputation
helps ensure that brands will
progress rapidly from awareness
(consumer knowing about the
brand) to trial (consumer testing
the brand) to bonding (consumer
preferring it over other brands).
Brands with higher RepZ enjoy
greater market share.
This prescription applies to
both Chinese and multinational
brands. Multinationals that have
built Corporate Reputation in
China based on their business
success will strengthen Corporate
Reputation by demonstrating
that their presence in China
goes beyond profitability alone
and is rooted in a long-term
commitment to helping advance
the welfare of the nation and its
people.
Implications for Brands
3. CORPORATE REPUTATION
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Chinese brands depend on responsibility to build Corporate Reputation…
… And Corporate Reputation impacts brand connection with consumers
The comparison of RepZ scores between Wang Lao Ji, the popular tea, and Coca-Cola, reveals that Coke has a higher RepZ score in China, but it is based more in the Success component, its profitability and business leadership, while the Wang Lao Ji score is stronger in Responsibility.
Strong Corporate Reputation helps ensure that brands progress rapidly in their contacts with consumers, from Awareness to Trial and Bonding.
RepZ, the BrandZ™ measurement of Corporate Reputation. Average RepZ score = 100
Impact of Corporate Reputation, RepZ score, on level of consumer Awareness, Trial, and Bonding% of consumers moving up pyramid levelsTop third and bottom third of RepZ scores
Source: BrandZ™ / Millward Brown
Source: BrandZ™ / Millward Brown
BrandZ™ measures Corporate Reputation with an index called RepZ, where 100 is average. RepZ measures how consumers view corporations based on Trustworthiness and three other components: Responsibility (attitudes toward environment, society and employees); Fairness (pricing and interaction with suppliers and others); and Success (innovativeness and financial performance). (For more information, please visit BrandZ.com)
Corporate Reputation in China declined from a score of 101, around average, to a below average score of 97. In general, Chinese consumers express confidence in the government’s ability to manage the economy and sustain economic growth. However, even the major State Owned Enterprises (SOEs) have not been immune to the decline in Corporate Reputation that has touched both local Chinese brands as well as multinational brands operating in China.
Corporate Social Responsibility (CSR) activities can help repair Corporate Reputation. But consumers expect a corporation’s social commitment to be more than a marketing add-on. They respond most positively when the commitment to the social good is a genuinely connected to the corporate mission.
In China, that means producing products and services that help individuals, families, and the nation advance to what the government has articulated as the Chinese Dream, a better life for individuals and a respected country internationally. The take away for corporations is to pursue growth without degrading the environment and offer products that are safe and useful, and make life better or easier.
Success
Responsibility
RepZ Index
Bonded
Trial
Aware
98 117
98 113
96 117
96 92
97 116
98 91
97 114
95 105
97 103
36 11
70 48
95 81
■ 2013■ 2014 ■ 2015
Wang Lao ji
Strong Corporate Reputation (Top Third)
Weak Corporate Reputation
(Bottom Third)
51% 23%
74% 59%
4 . INNOVATION
Innovation drives brand value and greater market penetration
Brands that introduce genuinely innovative products or services that help improve the lives of consumers in some meaningful way rise faster in brand value, potentially. Potentially, because it is important not only to innovate, but also to effectively communicate the reason for the innovation and the benefits it provides. Brands that innovate and then communicate effectively grow much faster in brand value.
BrandZ™ research compared two sets of brands, those that consumer’s viewed as innovative, as trendsetters, and those they considered “unique.” Over a three-year period, 2014 to
Innovation, real innovation, accelerates brand value growth. Adding another variant may be justified and generate some additional revenue, but it will not stick in the consumers’ mind as a stroke of creativity that elevates the brand nearer to the pantheon of brands that bring into the world something brand new, or at least smart and exciting.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
72 73
… Brands that increased market penetration innovated more
Innovative, unique brands grew brand value eight times faster…
Winning brands, those that increased market penetration, launched more and re-launched less.
Over a three-year period, 2014 to 2016, the most innovative and unique brands increased almost 30 percent in brand value, while the less innovated and unique brands increased less than 5 percent.
% of brands Losing brands decreased penetration, lost buyersWinning brands increased penetration, gained buyers
Based on 79 brands selected from the 2014-2016 BrandZ™ China Top 100 because consumers say these brands “set trends” or are “unique.” Top third are Most Innovative or Most Unique; the rest are Less Innovative or Less Unique.
Source: Kantar WorldpanelSource: BrandZ™ / Millward Brown
2016, the most innovative and unique brands increased almost 30 percent in brand value, while the less innovative and unique brands increased less than 5 percent. In other words, the most innovative and unique brands grew in brand value eight times faster than the least innovative and unique brands.
Along with accelerating brand value growth, innovation also correlates with market penetration. In a related study, Kantar Worldpanel compared the effect of a “new launch” (an addition that did not exist, a new product, function or packaging, for example) and a “re-launch” (an update on something that did exist). Brands that
launched more and re-launched less experienced greater market penetration.
This result can be interpreted as a quality vs. quantity story. A strategic launch can have more impact, possibly for less financial investment, than a series of re-launches. Less can be more, much more. Innovation is important in any country market, but it is especially important in the new normal of today’s China with slower growth and more sophisticated consumers who continue to spend, but are much more discerning about the products and services they purchase.
Innovation is not a one-off. The global
telecommunications giant, Huawei, which entered
the BrandZ™ China Top 100 Most Valuable Brands
this year at number seven, is regarded by consumers
as an innovator, not because of one particular
smartphone model, but because of the brand has
made a habit out of introducing new equipment and
services.
Apple is the gold standard for forming a brand
identity from habitual innovation. But the point is
not that all brands should be, or could be, like Apple.
Imitation is not innovation. Rather, a brand needs
to innovate in ways that are true to its particular
identity. The investment in innovation pays a
dividend in accelerated brand value and market
penetration.
Implications for Brands
% Change in Brand Value % Change in Market Penetration % Change in Market Penetration% Change in Brand Value
■ Most Innovative■ Less Innovative
■ New Launch: An addition that did not exist■ Re-Launch: an update on something that did exist
■ Most Unique■ Less Unique
Innovative Brands Losing BrandsUnique Brands Winning Brands
3% 32%3% 22%29% 68%29% 78%
T H E N AT I ONA L MOOD I S O P T I M I S T I C I N C H I N A ,
W H E R E P E O P L E L I T E R A L LY DA NC E I N T H E S T R E E T S .
5. DIGITAL COMMUNICATION
Chinese consumersare on mobile, but engaging them canbe challenging
Advertising and marketing communication in China is evolving differently and faster than in the West. Almost half of all ad spending goes to digital, and just over a third to TV. The proportions are reversed in the US, with less than a third of spending devoted to digital and 42 percent invested in TV, according to GroupM research report, This Year, Next Year. GroupM forecasts digital spending in China will be 4.5 times greater in 2016 than it was in 2010. Digital spending in the US grew just over 60 percent, during those years.
China had almost 670 million Internet users and 595 million people on mobile in June 2015, according to the China Internet Network Information Center (CNNIC). Almost double the population of the US, those digital users represent an enormous market opportunity for brands that communicate effectively with digital. Reaching these consumers on the appropriate device, at the best time, with the most effective content can be challenging.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
76 77
… And significant digital investment goes to online videoMuch of the digital advertising spending in China goes into online videos. Although the rate of spending on digital online videos is leveling somewhat, it is still expected to increase 41 percent increase year-on-year in 2016.
Source: GroupM / iResearch statistical data and iVideo Tracker
Digital ad spending outpaces all other media…Digital advertising spending is growing rapidly in China. GroupM forecasts that digital will comprise about half of all advertising media investment in 2016.
% change in advertising media spending Source: GroupM Advertising Expenditure Forecasts, June 2015
Much of the digital advertising investment in China is spent on videos. Although the annual growth rate of spending on digital online videos is leveling somewhat, it is still expected to increase 41 percent in 2016, which means a rise of 660 percent over the past five years. Chinese consumers prefer to watch these video ads on TV, but that is not the device with which they spend the majority of their time.
■ Digital■ TV■ Others
■ Actual year-on-year change in media investment ■ Percent of year-on-year change
44%59%
42% 35%
37% 30% 27 % 16%19%
11%31% 49%
2010 2016e
20110
¥10 BIL.
¥20 BIL.
¥30 BIL.
¥40 BIL.
¥50 BIL.
¥60 BIL.
0
20%
40%
60%
80%
100%
120%
2012 2013 2014 2015 2016 2017 2018
¥4.25 bil./US$650 mil.
98.3%
56.5%
47.2%54.9% 50.3 %
41.0 %32.5 %
26.7 %¥6.66 bil./
US$1.01 bil.
¥9.80 bil/ US$ 1.49 bil.
¥15.19 bil./US$2.31 bil.
¥22.82 bil./US$3.47 bil.
¥32.18 bil./US$4.89 bil.
¥42.64 bil./US$6.48 bil.
¥54.03 bil. / US$8.21 bil.
Brands need to consider the key
points: (1) digital is growing rapidly,
so it is important to be in digital;
(2) consumers prefer mobile, so
it is important to be on mobile (3)
consumers like watching video, so
clever, persuasive video ads make
sense; but (4) consumers prefer to
watch video ads on TV (where they
spend 22 percent of their viewing
time) rather than on mobile devices
(where they spend 56 percent of
their viewing time).
Many brands resolve the device-
format disconnection by being
present on mobile not with video,
but instead with less traditional
content. For example, brands
often invest in compelling content
on Tencent’s WeChat messaging
app, which has approximately 650
million monthly active users.
For brands that use video across
devices, it is important to create
content that corresponds to the
consumer mindset, which varies by
device. Because consumers are less
patient when on mobile devices,
videos need to instantly grab and
hold attention, a goal that often
can be accomplished with humor.
Ultimately, solutions vary by
brand and need to be part of
an integrated media plan that
is well conceived and executed
across digital devices, in ways that
are appropriate, coherent and
persuasive. Brands that succeed
will communicate to both broad
and targeted audiences of China’s
consumers.
Implications for Brands
5. DIGITAL COMMUNICATION
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
78 79
… But consumers are more receptive to ads they watch on TVConsumers spend most of their screen-watching time on smartphones, over two hours a day on average, but they are much more receptive to the advertising they see on TV.
How long did you spend on your digital device yesterday?While on this device, how receptive are you to advertising?
Source: Millward Brown/AdReaction Study
Many of the fast moving consumer goods (FMCG) brands that typically advertise on TV are shifting to digital for a more favorable return on media investment. The cost is less on digital, and the reach is more focused. When they do spend on TV, Chinese and multinational FMCG brands are more likely to invest in Smart TV because the interactivity appeals to the younger consumers they want to reach.
Ironically, technology brands now are more likely to advertise on TV because they are at a relatively early stage of development that requires building awareness with a wide audience. Often, the technology brands advertise on TV in smaller, less expensive media markets where TV remains an important information source. E-commerce brands that want to sell merchandise online to the residents of China’s rural villages and smaller cities advertise on TV to establish credibility and build trust.
… Consumers spend the majority of screen- watching time with mobile devices…
Chinese consumers spend over half, 56 percent, of their screen-watching time on a mobile device, with the balance of their time divided roughly equally between desktop computers and TVs.
% share of daily screen time
Source: Millward Brown/AdReaction Study
Chinese consumers spend almost half of their screen-watching time on a mobile device. They divide the balance of their screen-watching time roughly equally between desktop computers and TVs. When on a mobile device Chinese consumers most likely are on a smartphone, where they spend over two hours a day, on average. Chinese consumers do not like watching advertising videos on smart phones, however. They are much more receptive to video advertising seen on TV, according to Millward Brown’s AdReaction Study.
Consequently, there is a disconnection between device and format. Mobile is the preferred device of Chinese consumers. Video is their preferred format. Chinese consumers rather watch video advertising on TV, which occupies much less of their viewing time. Brands have responded to this dilemma in a variety of ways.
■ Mobile ■ Desktop■ TV
■ Smartphone ■ Laptop
■ Tablet ■ TV
56%22%
23%
0
10
20
30
0 50 100 150 200 250
MA
RKE
TIN
G R
ECEP
TIV
ITY
SCALE OF OPPORTUNITY (MINUTES USING DEVICE YESTERDAY)
6. CREATIVE QUALITY
Big creative ideas can turn strategy into magic
The big idea is especially relevant in China. When Chinese consumers consider a purchase, the top brands in the category may come to mind, but too often they are not distinctive. Local Chinese brands have successfully built Salience, but not Difference. A strong ad with a creative big idea can supply the critical point of Difference.
The right idea also helps cut through the manifold distractions of so much communication, especially on social media. Marketing communication that lacks a creative big idea risks becoming
A lot depends on the big idea, the over-
arching thought that communicates the brand
offering and advantage in a compelling and memorable
way. A great creative idea provokes reaction. It can turn strategy into magic.
02 > Six Critical Observations For Building Brand Value TOP 100 Most Valuable Chinese Brands 2016
80 81
Winning brands maintain media investmentThe BrandZ™ China Top 10 increased digital media investment by an average of 20 percent in 2015. In contrast, the 10 brands that dropped from the Top 100 ranking decreased digital media investment by an average of 52 percent. Losing brands slashed overall spending 36 percent. Winning brands moderated overall investment.
Source: BrandZ™; CTR, MI Full Media Tracking (TV, Radio, Newspaper, Magazine, OOH, Metro, Internet)
just more noise. A recent case study illustrates the point.
In one of China’s most expensive ad campaigns, a used car brand recently hired 10 celebrities to appear during a series of 60-second spots inserted around a favorite TV program. The celebrities exhorted viewers to visit the brand’s website, a total of 20 times in each ad. Millward Brown’s LinkNow research found the audience disengaged and unmotivated to purchase second hand cars as a result of the ad.
The ad failed to engage and motivate because repetition of a message alone is not a recipe for communication success. The message needs to include a credible benefit. A message presented at a high decibel level, but without a benefit, often is experienced as intrusive, irritating, and disturbing – even if celebrities are doing the shouting.
Audiences respond more positively when brands communicate with a creative big idea. In BrandZ™ research ranking advertising by the level of consumer approval, the Top 10 Brands score 26 percent higher in Brand Power, a BrandZ™ measurement of competitiveness, and 30 percent higher in brand value, than the next 10 brands.
The message needs to reach the right audiences, of course. Winning brands are the offspring of harmonious marriages, where a creative big idea and a well-conceived media plan work in concert. The Top 10 brands, in the BrandZ™ Top 100 Most Valuable Chinese Brands, increased digital media investment by an average of 20 percent in 2015. In contrast, the 10 brands that dropped from the Top 100 ranking decreased digital media investment by an average of 52 percent. The losing brands also slashed overall media investment by a third, while the winning brands only moderated spending, even in a turbulent year.
With creative big ideas Chinese brands can differentiate
from the competition in compelling and memorable
ways. Achieving that goal requires working with
marketing communication specialists that respect and
cultivate creativity, have the research and analytics
acumen to determine the right strategy, and the media
expertise to shape the best implementation plan.
Winning brands maintain significant media investment
even in difficult times.
Implications for Brands
Winning Brands(Top 10 Most Valuable Brands)
Losing Brands(Dropout 10 Brands)
-17% Average Media
Investment Change
-36% Average Media
Investment Change
+20% Average Digital
Investment Change
-52% Average Digital
Investment Change
■ Increase ■ Decrease
OUR INSIGHTS
82 83
Consumer adoption of mobile devices is growing in leaps and bounds, especially
in China where people seem to feel compelled to order everything online for delivery to their doorstep. The phenomenon empowers consumers to become smarter, while also getting them to focus on individuality and demand personalized services. They don’t like being educated,
but want to take control by themselves. Owing to such changes in behavior, brands are facing both challenges and opportunities.
Smart marketers have realized that mobile data terminals provide an unprecedented opportunity to understand consumers in depth, and with the help of mobile technology, they get to reach consumers more effectively. Brand owners can easily identify a consumer and track his/her
behavior accordingly. By further analysis, brands can reach their target audiences via interactive technologies and media mix to gain conversions. Mobile has now become the core of marketing campaigns. Marketing mechanisms are therefore designed and developed around mobile terminals through which content is distributed. It looks like mobile marketing is all set to take the form of a native ecosystem. Soon, the traditional hard-ads will be replaced by soft forms of content and services. Brands need to adapt to these rapid changes to present themselves in the right place, at the right time, and more importantly, with a more ‘mobile’ friendly image. Not portraying its services effectively by mobile will be a hindrance to growth for a brand. The use – and misuse – of mobile may yet prove to be the key determinant of the future of Chinese brands.
BENJAMIN WEIGeneral Manager
GroupM Connect [email protected]
MOBILE
THE NEXT BATTLEFIELD FOR BRANDS
Why is it that Chinese brands have gained share over multinational brands for the third consecutive year? According to Kantar Worldpanel’s recent “Asian Brand Power” report, one of the key reasons is their ability to deliver world-class innovation with a local twist. Chinese brands recognize that consumers want to move with the times whilst honoring traditions.
Yunnan Baiyao’s premium toothpaste, for example, won 6.3 million new consumers1 in its first year, using ingredients from traditional Chinese medicine as its “reason to believe”. Similarly, Six Walnuts created a new category of liquid nutritional supplements based on the dietetic powers of the “king
of nuts”, and have seen sales double for five years in a row. They cleverly used restaurants as their initial launch pad before expanding distribution to convenience stores. Endorsement by Chen Luyu, often described as “China’s Oprah”, further helped them increase their penetration by 8.7 million households last year1.
Other brands can learn from these successes by ensuring cultural insights are part of the innovation process as well as the subsequent launch plan. Reflecting national culture, pride and values in an authentic way will play a critical part in the success of your brand in China.
JULES YOUNGGlobal Account DirectorKantar, [email protected]
AUTHENTICITY
WORLD-CLASS INNOVATION WITH CULTURAL INSIGHTS
1Source: Kantar Worldpanel, China
TOP 100 Most Valuable Chinese Brands 2016
How far have we gone with the sophistication of branding in the past 20 years? Modern brand management and integrated communications have helped brands to establish genuine connections with their customers. We have seen brands trying to appeal with emotional promises, some even making bold claims of higher purposes and ideals.
It is all good… if brands are living up to these claims and promises. With the exponential growth of digital platforms and social media in China, the balance of information has tilted in favor of the customers, meaning brands are under constant scrutiny. False claims and empty promises are easily seen through. More than ever, consumers are more suspicious
and demanding of brands’ behaviors. They are calling for “Brands that Do” not just “Brands that Say”. Huawei is a good example of a brand that “Does things” first, before they “Tell people”. To a large extent, the brand’s recent ascent is the reward for its long dedication to tech innovations and product delivery. Now, the brand is a genuine challenger on the world stage.
Perhaps other brands in China will start reflecting on the way they attribute their resources. Instead of bidding for the sky rocketing 15-second commercial break on CCTV’s New Year’s Eve show, maybe it is time to consider putting more resources into R&D investment or in improving the customer experience.
MICKEY CHAKChief Planning OfficerOgilvy & Mather [email protected]
VALIDATE
BRANDS THAT DO
For many years the two anchors in Chinese people’s lives (Confucianism and Communism) have promoted conformity as the desired, safe way of going about life. However,
as the macro socio-economic conditions change, values and aspirations are starting to shift. People are becoming more exposed to Western views
on individualism and the desire to express a distinct identity from parents and peers.
Today’s China is buzzing with progressive ideas – imported, home grown or both, increasingly revolving around the idea of self. Aspirations are no longer bound to the conformity of one’s role within the group, but are evolving toward a more personal and empowering horizon. As a result,
we are seeing more lateral thinking practised and individual expressions encouraged – from acts of creativity to small disruptions of rules.
This growing shift towards individualism can be a powerful tool for more emergent and premium brands that want to connect with consumers. Indeed, some brands are already tapping into this phenomenon across all areas of communication including packaging, events, digital and advertising. For example in above the line communications the trend is to focus on a person’s story and aspirations with visual compositions centred around him/her, documentary style cinematography and copy that uses words like “I”, “me”, “my dream”, and so forth. Ultimately we are now discovering tailor-made products and services that allow individuals to express themselves in a more personal, customized way that showcases their true inner emotions and desires.
PANOS DIMITROPOULOSDirector of Cultural Strategy
Added Value [email protected]
CULTURAL STRATEGY
MOVING FROM MASS CONFORMITY TOWARDS
INDIVIDUAL DISTINCTIVENESS
OUR INSIGHTS
84 85
The healthcare industry in China saw unprecedented growth a few years ago, but now we need to work harder to make these brands’ launch trajectories as steep as possible. Following the three simple rules below will help organizations to think more strategically when
looking for brand growth drivers. 1. It’s not just about using insights from
awareness and usage metrics anymore. The world has moved on, and a strong brand growth framework will allow research and marketing teams to collaboratively identify where the best return on your yuan is.
2. Healthcare is different, especially in China where Chinese traditional medicine makes up a large percentage of the market. Taking a consumer framework and overlaying it on healthcare will not work. In addition, pharma sales forces in China are under unprecedented scrutiny. E-detailing is
becoming part of the sales mix, and social channels such as WeChat have become important platforms for not only consumers but doctors too. Focus on three pillars:
• Brand access – Is your drug present on the National Reimbursed Drug List (NRDL) or regional lists? Do hospital policies support its use? How widespread is its distribution? And can patients afford it in a market where, despite government reforms, up to three-quarters of costs are still paid out-of-pocket?
• Brand execution – Do you have the right mix of traditional and digital channels? What messages are consumers and doctors receiving?
• Brand experience – What is in the mind of a doctor or consumer when they are deciding what to prescribe/pick up from the pharmacy shelf?
3. Implement high quality research and marketing recommendations.
ADELE LICommercial DirectorKantar Health, China
PHARMA
RULES FOR BRAND GROWTH
Recently Landor researchers have noticed a seeming shift in the basic attributes that underlie brand strength and financial success. In 2015, the nature of this shift was examined using a global multi-phase approach with analysis from Landor/Y&R Brand Asset Valuator and a qualitative analysis of consumers in the USA, Europe and China. The resulting synthesis identified a new leading indicator of future success for a brand – how good it is at being Agile. The six traits that are common (in varying degrees) to every Agile Brand are identified as principled, responsible, adaptive, multichannel, globally-aware, and having open communication with users.
The Agile Brand in China differs from its global counterparts,
however, in the degree to which the last four of these six traits are strongly evident and a quantitative factor for success in brands across categories and demographics.
This insight gives starting points for agencies and brand owners looking for ways to improve. Does the brand have the habit of adapting? Is it leveraging all channels at its disposal? Even if not an export product, is it abreast of how its category is behaving in global markets? Has it established a communication channel with users? From pharmaceuticals to mobile phones, real estate to banking, the data shows that agility means success.
PETER MACKExecutive DirectorLandor [email protected]
AGILITY
THE AGILE BRAND – CHINESE STYLE
TOP 100 Most Valuable Chinese Brands 2016
According to our latest AdReaction study, multi-screen users in China are amongst the world leaders when it comes to watching video content across devices, especially on digital channels. Chinese multi-screen consumers
aged between 16 to 45 years old watch 4 hours and 3 minutes of video content on a daily basis – almost 40 minutes more than the global average. It also shows that the receptiveness of Chinese consumers towards video ads on their smart phones (9 percent) is one of the lowest across the world (19 percent). The challenge for marketers in China is that consumers like watching video on their digital devices but are resistant to video ads.
A recent study of ours showed only 50 percent of the ads successfully transferred from TV to online. One of the main reasons for this is context. The consumer’s mindset while consuming TV and online content is completely different; digital devices (Lean forward) operate in a different audience context from TV (Lean back).
The online ecosystem has issued a challenge to marketers to adapt their creative to a new environment where there is a significant variation in advertising receptivity across formats. How do we optimize video ads for digital devices to engage consumers, and avoid being skipped across screens? Here are some essential considerations: • Prioritize eye-catching visuals to
enhance stopping power; strong images and eye-catching color can help here
• Be distinctive; breaking category codes can help achieve stand out in a digital environment
• Brand needs to come in early, clearly and consistently to have a stronger impact in the cluttered online environment
• Build stronger emotional resonance to get close to consumers and build positive receptiveness to ads
RAJSHEKHAR MYLAVARAPUDigital Director, Shanghai
Millward BrownRajshekhar.Mylavarapu@
millwardbrown.com
RECEPTIVITY
IMPACTFUL ADVERTISING IN
THE DIGITAL WORLD
In the era of mobile internet, information is readily available to consumers through multiple channels. Since the consumers’ ability to assimilate can’t keep up with the lightning speed of information, content that is in line with their interests and also user-generated-content are gaining greater priority than ever before.
The internet has made consumers more active players in brand communication. With the development of technology, a majority of consumers are keen to express themselves online, whether on social networks, WeChat Moments advertising comments or “Popups” on video websites. An individual has much more control over the expression of their online identity than in real life face-to-face interaction.
WeChat Moments feed advertisements with push ads and comment spaces not only create a virtual “lobby” context for customers to post their opinions of these brands but also provide space for them to interact with their WeChat friends. Hence, it has significant “customer cluster effect”. Such “space-providing” feature helps WeChat to turn “hard advertising” into “soft advertising”, which enhances the effectiveness. Brand owners should consider this as a priority: either provide quality content for your audience or “save space” for customers to interact with one other. In the process, your brand will gain more recognition subtly, but persuasively.
ZOD FANGDirectorGroupM Knowledge [email protected]
SOFT ADVERTISING
CREATING “SMART SPACES” FOR CONSUMER ENGAGEMENT IS A MUST
CON S UM E R S A R E S P E N D I NG MOR E W I S E LY ,
B U T T H E Y CON T I N U E TO S P E N D , E V E N ON L U X U RY .
03THOUGHT
LEADERSHIP
DIGITAL
E-COMMERCE
PHYSICAL WORLD OPPORTUNITY
BRAND AS CAPITAL ASSET
THE NEW NORMAL
88 89
90 91
03 > Thought Leadership TOP 100 Most Valuable Chinese Brands 2016
DIGITAL
TIME FOR FMCG BRANDS TO PRIORITIZE THEIR DIGITAL STRATEGY
FMCG BRANDS MUST RESPOND QUICKLY AS THE BALANCE OF SALES
POWER SHIFTS TO ONLINE
While FMCG bricks and mortar stores experienced tepid performance last year, the opposite was true in China’s robust e-commerce landscape. Here, online sales rose 34 percent in 2014 as e-commerce retailers expanded penetration and online shoppers dramatically increased their purchasing frequency. The pure-play online retail outlets continue to dominate the market, but large omnichannel retailers are now beginning to emerge. Brands must respond to the rise of e-commerce channels – and fast.
China’s online retail world is being shaped by digital consumers’ distinct preferences and habits. Our study found that shoppers who bought products online, where they would have otherwise purchased in store, generated approximately 40 percent of e-commerce sales growth. This means that approximately 60 percent of sales growth was organic and the result of new purchases that shoppers would not have made without the digital option.
Online, Chinese shoppers exhibit the same lack of loyalty as they do in physical stores. The more they shop, the more places they go to, both offline and online. However, certain behavioral differences exist between the two channels:
Chinese shoppers buy a relatively limited number of FMCG product categories online but in a more focused way. The top 10 categories represent 77 percent of online sales, but only 43 percent of offline sales. Another interesting finding is that for certain products such as skincare or infant formula, Chinese consumers will shop across a variety of physical
stores but they tend to exhibit more purchasing loyalty to their preferred online outlets.
Among the most common traits of online shoppers – and one opening up significant opportunities – is their interest in taking advantage of promotions and imports. Promotions result in only 14 percent of physical store sales. That rate is more than doubled online, where 38 percent of sales take place during the most popular promotional offerings.
Online shoppers are also more willing – or simply more able – to purchase products from overseas: imports account for only 10 percent of purchases offline, but 40 percent online.
Some brands are building their strategic partnership with the likes of Tmall and JD.com as a way to sell their blockbuster products via the digital channel. We have also observed brands increasingly using their hero SKUs to attract new consumers. For example, leading make up brand Maybelline used its Pure Mineral BB Cream to attract 800,000 new consumers in 2014 through its online channel alone, according to Kantar Worldpanel. Chinese brands are relatively more aggressive in their online activity. Pechoin, a skin care brand with a history dating back to the 1930s, has really focused on building its profile in the digital space. It’s perhaps a lesson to others that Pechoin was the only brand in its category to exceed sales of RMB 100 million (U.S. $16 million) on Singles Day, according to its website.
Clearly, as consumers and competitors alike become increasingly digital, FMCG brands must invest to understand how to use China’s booming e-commerce market to reach and recruit new customers. Implementing an effective digital strategy must be the brand’s priority.
Jason YuGeneral ManagerKantar Worldpanel [email protected]
92 93
03 > Thought Leadership TOP 100 Most Valuable Chinese Brands 2016
E-COMMERCE
WHAT TO EXPECT: 7 TRENDS FOR CHINA E-COMMERCE In 2015, online FMCG sales
represented 7 percent of total FMCG sales; however, this proportion is anticipated to reach 30.5 percent by 2020. As competition in this sector intensifies, every eTailer is expanding the range of goods
it offers online. The fresh food segment has already been fiercely contested. It’s most likely that this uptick will result from every sizable e-commerce platform pushing heavily into this field and investing in or acquiring strong vertical fresh food e-commerce companies.
In 2014, China topped the global e-commerce market with sales of US $458 billion (RMB2.8 trillion). Second in line was the United States with sales of US $297 billion. If the Internet penetration rate in China and proportion of Chinese netizens who shop online follow the pattern seen in the U.S., the number of online shoppers in China will reach 891 million by 2020 – that’s more than double the number of shoppers in 2015, according to Kantar Retail estimates. The revenue from these e-commerce sales should account for 26.7 percent of total national retail sales by 2020.
FMCG and fresh food will be the fastest-growing categories
Cross-border activity is an emerging theme of the e-commerce world, and it is rising sharply under the auspices of policy incentives. Import duties on most categories were reduced in 2015, meaning shoppers pay only the personal postal article tax when they purchase foreign goods through cross-border e-commerce platforms. This creates a clear price advantage for cross-border e-commerce.
Major eTailers have already established their special cross-border e-commerce brands such as Tmall Global, Jumei Global, JD Worldwide, and SF Haitao. Twelve national pavilions have been set up on Tmall Global and nine on JD Worldwide. Professional cross-border eTailers as represented by Ymatou.com have also entered a phase of fast growth, setting up overseas warehouses and cross-border logistics in quick succession.
Cross-border e-commerce will experience 10x growth within five years
So, what’s going to drive this tremendous growth in Chinese e-commerce over the coming five years?
We have identified the following seven trends.
Oceanne ZhangDirector of Retail Insights and eCommerceKantar Retail [email protected]
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E-COMMERCE
With the gradual saturation of e-commerce in Tier 1 cities, small and medium-sized cities have become the new drivers of e-commerce growth. The days of advertising gimmicks, such as wall painting and driving caravans around towns and villages, have passed. A round of key cultivation and investment in rural e-commerce has started. Taobao has tailored a web page for rural areas. It has also set up franchised Taobao service stations with multiple ways of educating shoppers, and purchasing,
receiving, and delivering goods on their behalf. Currently, Taobao service stations cover 17 provinces, of which 63 are county-level stations and 1,803 are village-level stations. JD.com has established directly operated county-level service centers and set up “JD Bang” home appliance franchise centers. At this point in time, these two levels of service centers span 32 provinces, municipalities, and autonomous regions of mainland China, covering more than 1,000 counties in total.
Rural areas and small and medium-sized cities will drive rapid growth
Mobile phones are already the most-used device for network connection by the Chinese, and the proportion of mobile shopping for all major eTailers is also growing dramatically. Alibaba’s GMV from mobile shopping accounted for 68.67 percent during Singles’ Day. To reach that, it has established a large, effective mobile ecosystem through acquisitions, investments and alliances, all of which bring mobile traffic into its three shopping platforms – Taobao,
Tmall, and Juhuasuan – from essential mobile APPs such as Weibo.com, UC Browser, Amap and Xiami.com.
In 2014, JD.com formed a strategic alliance with Tencent and gained home-page placement on WeChat and Mobile QQ, thus monetizing a huge amount of traffic. It is estimated that 48 percent of JD.com’s transactions were completed on mobile devices in 2015.
Mobile devices will be the critical platform
Internet finance will significantly boost e-commerce development. Alibaba gained an advantage by getting into this arena early. As a latecomer to the industry, JD.com set up its financial system within a fairly short period, modeling it on Alibaba’s. However, its launch of the “Blank Note” interest-free consumer credit
service stole a march even on Alibaba. Other innovations in financing could open up even more avenues for e-commerce. Crowdfunding, for example, which originated as a method of financing startups, has become a new way of developing, marketing and advertising new products on e-commerce platforms.
Internet finance will be another battlefront
Logistics has always been the core competency of eTailers, and it is also pivotal to shoppers’ satisfaction with the shopping experience. With eTailers expanding into lower-tier cities and e-commerce rising quickly in rural areas, logistics, timeliness and efficacy are not only a question of securing the last mile, but also of conquering a last hurdle for both eTailers and brand owners.
At present, all eTailers are striving to build their logistics capabilities and expand their areas of coverage for fast delivery. A comparison of the provinces where key eTailers provided next-day delivery between 2014 and 2015 reveals that fast-delivery areas have expanded significantly. eTailers also upgraded their delivery teams and facilities at the same time.
Logistics as the enabler
During the early stages of e-commerce, the three main motivations for shopping online were price, assortment, and convenience. Following the normalization of e-commerce in China, the three main motivations for shopping online became value, assortment and
experience. In response to these new shopper priorities, Alibaba and JD.com launched a variety of initiatives in recent years targeting the user experience – before, during, and after the sale – all of which aim to fulfill each shopper’s requirements and create the perfect shopping experience.
Value, assortment and experience as key consumption drivers07
TOP 100 Most Valuable Chinese Brands 2016
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PHYSICAL WORLD OPPORTUNITY
A NEW TREND IN BUILDING INTERNET BRANDSRETHINK THE FUNDAMENTALS AND BUILD BRAND EQUITY IN THE “PHYSICAL WORLD”
Last year, for the first time, a technology brand – Tencent – seized the top spot in the Top 100 most valuable Chinese brands rankings. 2015 was also the first time that the overall brand value of technology brands surpassed that of financial services brands. Throughout the remainder of the year, internet brands continued the growth trend, with leaders BAT (Baidu, Alibaba, Tencent) enjoying strong performances.
While “Internet+”, “O2O” and “digital” have become the sweet spots for traditional industry brands trying to innovate and seize new opportunities in the internet age, we have observed a new trend among internet brands. That is, leaders are placing emphasis on rethinking the fundamentals of their brand and brand building efforts, as they aim to enhance their brand influence in the “physical world”. We perceive two key areas of development:
RETHINK THE RELATIONSHIP BETWEEN BRAND AND CONSUMER
Successful internet brands are usually the pioneers of innovative solutions to address a specific untapped consumer need, regardless of whether it is as yet an unmet or unrealized need. Previously, a superior product experience was seen as the most important aspect for the
brand. However, with the gradual development of brand ecosystems, it has become increasingly difficult to define brands merely through a single product experience.
This has led leading internet brands to shift from solely focusing on providing an innovative product experience and instead aim at the higher purpose of how to make a difference in consumers’ everyday life. In reality this has resulted in a shift of branding from “product + community” marketing to creating a deeper emotional connection with consumers. For example, Tencent has continually communicated emotional themes such as “human interaction” and, “Love is all around” to consumers since its 12th anniversary.
RETHINK THE RELATIONSHIP BETWEEN BRAND AND SOCIAL DEVELOPMENT
Internet brands will continue to drive social development in a unique and previously unseen way, more often than not causing disruption to an existing industry. For example, China’s Xiaomi is consistently challenging the traditional consumer electronics industry; Didi has significantly changed the way in which people approach travel; and both Taobao and Jingdong have served to replace the traditional retail industry by moving it from the high street to online. In this landscape
of disruption, it is not surprising that we see a series of “Going back to Tangibles” initiatives from traditional brands such as Gree and TCL, and a few defensive moves from taxi drivers or taxi companies due to disturbance by Didi, which lead to stricter government regulation of the new methods.
In light of China’s unique cultural background and economic “rebalancing”, it is even more the case that building a successful brand requires not only commercial growth but also a societal purpose, and the internet industry is no exception. Alibaba is a good example of a company that has been able to be both disruptive and also widely accepted by the general public. It has been able to do this by always staying true to a higher purpose, that is, making business easy to do anywhere.
Even in the fast-changing ever-disruptive internet industry, the essence of brand remains unshaken. For this reason, internet brands that strive for excellence should further explore their brand purpose. By placing emphasis on the relationship between brand and consumer; brand and other stakeholders in the industry chain / ecosystem; as well as brand and social development, internet brands can better build brand equity beyond the internet, and in doing so, transform the world in a more effective way.
With their rapidly increasing brand value, internet brands are playing a crucial role in social development and fundamentally transforming
consumers’ lifestyles and purchase behaviors. This is driving a transformation of the relationship between brand and consumers.
Leon ZhangDirectorMillward Brown [email protected]
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BRAND AS CAPITAL ASSET
BRAND BUILDING: AN INVESTMENT IN FUTURE FINANCIAL SUCCESS
Marketing is not a cost. Marketing is the most important investment any company should make to ensure long-term financial success. Brand strength leads to superior shareholder returns. At BrandZ™, we’ve proved this connection: if you’d invested $100 on the stock market (the MSCI world index) in 2006, your return in 2015 would be $30. However, if you’d picked your portfolio from the BrandZ™ Top 100 the return would be $103 – three times greater. Brand building also brings resilience in challenging times. While the share price of all brands dropped during the economic downturn, it took strong brands just six months to recover – versus three years for average brands.
In China, it is widely acknowledged by businesses that strong brands help to generate a price premium and increase sales volumes. For many of the stock market’s leading performers it is the ‘brand’ that those businesses have built up that drives their market success. More organizations focus on building great brands so that they can benefit from market share, premiumization and business longevity.
While brand is not a passive asset, like the goodwill that is left over when the value of other assets has been subtracted, its role in business success is too important for financial analysts to ignore.
PRIZE ASSET
Brand is one of the most valuable financial asset types of modern corporations. It contributes more to shareholder value creation than any other tangible or intangible asset. Millward Brown research shows the additional value realized by brands to be as much as 50 percent of intangible capital.
Apple (AAPL:NDQ) is a good example of a tech business that uses brand to command a price premium and drive business sales. As one of the highest-ranking brands in our BrandZ™ Top 100 ranking of the Most Valuable Global Brands, its brand is valued at $148 billion. But in 2014, a growing perception that Apple was no longer redefining technology for consumers – which was reflected by a lack of dramatic new product launches – contributed to a 20 percent decline in Apple’s brand value. In 2015, the success of iPhone 6 and the launch of new products such as Apple Watch, Apple Pay pushed Apple back to the position of most valuable brand in the world.
Autohome Inc. (ADR: NYSE): Autohome Inc. is the leading online automobile news, social media and purchase site in China, providing independent and interactive content to automobile buyers and owners. Its brand was valued at $120 million at IPO. Autohome Inc’s CEO, James Qin, believes that IPOs are the time to focus the business away from
products and toward the needs of existing and future customers, and what a brand will do to support and grow this base. With the support of BrandZ™ methodology, the Autohome board decided to expand into auto e-commerce and the used car business, with an aligned brand vision “Lead everything Auto” to be executed through brand development plans. Revenue year-on-year increased by 82.1 percent to $100.5 million for the first quarter of 2015, reflected by stock market growth of over 72 percent. The number of Chinese brands in the BrandZ™ Global Top 100 has risen from just one in 2006 to 14 in 2015, and their total Brand Power has increased 1,004 percent. Chinese brands have learned from and followed Western brands, and now they have started to lead. The majority are not yet truly globalized, but they’re ambitious and growing in value extremely fast – and they will change the global competitive landscape.
Doreen WangGlobal Head of BrandZ™Millward [email protected]
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BRAND AS CAPITAL ASSET
TO WIN IN THE NEXT DECADE, BUILDING DIFFERENCE IS THE MUST-DO FOR CHINESE BRANDS
Here’s one big challenge Chinese brands are facing: compared to multi-national brands in China, Chinese brands are lagging way behind on “being different”. For example, in consumers’ minds, local brands are less trend-setting and lack experience of telling compelling brand stories. In a world with so much product similarity, brands which consumers view as “different” achieve higher value. Those that have remained in the top half of the BrandZ ranking over the last 10 years are scored very highly on “difference” by consumers, and have grown 124 percent in brand value. In contrast, brands in the bottom half of the ranking score lower and have increased only 24 percent in value.
Difference can enable a brand to command a higher price and yield a higher profit. It isn’t just about the product; differentiation can also be found through purpose, personality, values, and design. Category leaders like Coca-Cola and BMW need to guard leadership and keep refreshing their brand messages to be always unique.
As China is experiencing the historical Internet+ technology explosion, it’s a critical time for technology companies to build strong brands. Chinese brands should consider a comprehensive review of the brand’s value proposition in order to answer two important questions: “What does my brand stand for” and “What purpose can we fulfill to make a positive difference in people’s lives”. We need to move beyond the product functional benefit – “what”, to emotional benefits and purposeful benefits – “why” – why we do what we do? As a good recent example, Smartizan T2 phone created a “pair-up solution” to help senior citizens fix smartphone issues via the remote “same-time” help app on their children’s phones. This is not just a smart solution, but more importantly, it serves a greater social purpose to make seniors’ lives easier and give them the opportunity to truly enjoy the mobile world.
To remain competitive through the next decade, and to develop into the world’s most valuable brands, Chinese brands should stop seeing brand building as a cost and view it as an investment in future financial success. They need a holistic brand building system that focuses on every aspect – from communications to CRM to creating the whole experience – to make consumers’ lives better, build meaningful difference and embrace disruptive technologies. Brands are a fabulous investment, and need to be nurtured and cared for accordingly.
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GROWTH IN THE NEW NORMAL
8 RULES FOR WINNING IN CHINA’S NEW GROWTH MARKETS
Moving forward, the brands that will excel will be the ones who innovate and create new forms of value for customers. Creativity will increasingly emerge as a core currency for companies, and ideas will be seen as the source of future growth.
MOVING AT THE PACE OF CHINA
The Chinese market is complex, and it rewards a unique set of behaviors that are quite different from those generally most appreciated by Western multinationals. Speed, for example, is viewed as a virtue in itself. The closed technology ecosystem of China requires organizations to develop an intimate understanding of the local Chinese alternatives to global standard-setters, and how they are different. The incredible pace of economic development has led to dramatically different viewpoints across generational and geographic segments, and therefore requires “China-only” forms of targeting. While these factors have long been true, the difference is that China is now beginning to lead the world into truly new territories, and global leadership needs to play a different role. Seizing the opportunities in the “New Normal” will require empowering China leadership teams to move at the incredible pace of the Chinese market – not the pace of global stakeholders who need to play “catch up”.
A PERFECT STORM OF OPPORTUNITY
Despite the slowing economic growth and more difficulty in finding growth, there are new reasons to be excited about the Chinese market. • The tremendous market size of China and relative
consumer homogeneity means that brands can get a lot of mileage from each initiative they launch. Even the most targeted of marketing initiatives can involve a dialogue with enormous populations.
• The growing middle class is demonstrating an incredible, ever-increasing appetite for consumption.
• The advanced levels of mobile and e-commerce penetration are making China ideal for digitally-enabled business ventures.
We believe this unique combination is creating a “perfect storm” of opportunity, for which we’ve already seen a first wave of big winners.
China has officially entered what President Xi Jinping has called the “New Normal”. This phenomenon incorporates a broad combination of factors –
including the gradual slowing down of economic growth, a transition to higher levels of domestic consumption, more innovation-driven industrial
growth, and a number of other changes. With this, there is now broad consensus that the so-called “easy growth” in China is over.
Jacco ter ScheggetPresidentOgilvyOne [email protected]
Charles Laporte AustVice President OgilvyOne [email protected]
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GROWTH IN THE NEW NORMAL
8 RULES OF SUCCESS
Having the privilege of seeing the inner workings of some of the most successful and cutting-edge brands in China, we’ve distilled a set of eight key success factors.
The new generation of Chinese consumer is living at the global cutting edge of online-to-offline experience. Failure to put mobile experience at the core of any new business can be fatal.
We see two frequent errors when it comes to quality standards. At one extreme, the complete abandonment of rigor and quality standards. At the other extreme, we sometimes see the desire to impose process and “best practice” that prevent teams from moving nimbly enough. Rather than committing to either school of management, we value a bit of wisdom about where and when.
Chinese consumers have a strong sense of price-value benefit and are uniquely sensitive to empty brand promises. We see them gravitating towards the brands that deliver great experiences across their journeys, not just messaging.
Don’t rely on over extensive research, validation and up-front modeling. The winners are the ones who are taking more entrepreneurial approaches to developing, launching and evolving new business avenues.
In a world where brands need to compete intensely for customer attention, insights become the foundation. With China’s unique BAT (Baidu, Alibaba, Taobao) dominated media ecosystem, the temptation can be to build experiences on third party platforms and leave the data in their hands. This is like giving your heart away.
China’s market is big enough to build incredible businesses in very focused areas of operations. Doing one thing brilliantly can be a much better strategy in China than doing multiple things adequately. Take for example the story of Three Squirrels – the 3-year old company that made USD $25m in 2014 by only selling nuts on Taobao.
While Chinese consumers may have a lot in common as a whole, they also encompass incredible diversity. Getting it right requires sophisticated understanding around different generations, Chinese geographies and more standard demographics/psychographics.
In such a fast moving world, building the business of the future requires fertile partnership ecosystems, and the building of customer interest together via complementary roles. This is particularly true in China, where aligning motivations and wins is always a great starting point.
Go mobile first
Use rubber rigor
Think journey-wide engagement
Fail fast & iterate
Own your user data
Focus on the core
Focus on specific personas
Create shared wins
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TOP 100
THE CHINA TOP 100 RANKING
THE CHINA TOP 100 BRANDS IN BRIEF
THE TOP PERFORMERS
CATEGORY UPDATE
Q&A WITH SENIOR EXECUTIVES OF TOP 100 BRANDS
OUR INSIGHTS
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016
1 Tencent Technology 82,107 24% 5
2 China Mobile Telecom Providers 57,157 2% 4
3 Alibaba Retail 47,605 -20% 3
4 ICBC Banks 34,276 -1% 2
5 Baidu Technology 26,849 -13% 5
6 China Construction Bank Banks 19,720 -6% 2
7 Huawei Technology 18,501 NEW 3
8 Agricultural Bank of China Banks 16,239 5% 2
9 Ping An Insurance 15,624 41% 3
10 China Life Insurance 15,504 53% 3
11 Bank of China Banks 12,974 9% 2
12 Sinopec Oil & Gas 12,717 -18% 1
13 Moutai Alcohol 11,507 51% 5
14 PetroChina Oil & Gas 10,709 -11% 1
15 JD.com Retail 9,422 NEW 3
16 China Telecom Telecom Providers 9,003 -9% 4
17 China Merchants Bank Banks 6,631 17% 2
18 Yili Food & Dairy 6,235 22% 5
19 Air China Airlines 4,902 26% 3
20 Mengniu Food & Dairy 4,755 -2% 5
21 China Unicom Telecom Providers 4,708 -14% 3
22 Bank of Communications Banks 4,499 17% 2
23 CPIC Insurance 4,304 36% 3
24 Lenovo Technology 3,788 16% 3
25 China Minsheng Bank Banks 3,441 12% 2
Brand Contribution
Brand Contribution
Brand Value %Change 2016 vs. 2015
Brand Value %Change 2016 vs. 2015
Brand ValueUS$ Mil.
Brand ValueUS$ Mil.
Category CategoryBrand Brand
26 Suning Retail 3,310 68% 3
27 Yunnan Baiyao Health Care 3,046 11% 4
28 Vanke Real Estate 3,038 18% 4
29 China Eastern Airlines Airlines 3,015 49% 3
30 PICC Insurance 2,975 25% 2
31 Wanda Real Estate 2,921 NEW 2
32 Letv Technology 2,805 81% 5
33 Midea Home Appliances 2,495 54% 4
34 China Southern Airlines Airlines 2,456 44% 3
35 Haier Home Appliances 2,360 22% 4
36 Evergrande Real Estate Real Estate 2,288 49% 3
37 Shuanghui Food & Dairy 2,265 -17% 3
38 Poly Real Estate Real Estate 2,113 20% 3
39 Gree Home Appliances 1,947 9% 3
40 NetEase Technology 1,933 73% 3
41 360 Technology 1,903 20% 3
42 New China Life Insurance 1,825 42% 2
43 Tong Ren Tang Health Care 1,808 41% 4
44 Ctrip Travel Agencies 1,711 40% 3
45 Yanghe Alcohol 1,648 24% 3
46 BYD Cars 1,573 20% 1
47 ZTE Technology 1,548 46% 3
48 Country Garden Real Estate 1,468 11% 3
49 Tsingtao Beer Alcohol 1,440 -20% 5
50 ChangYu Alcohol 1,162 25% 4
Source: BrandZ™ / Millward Brown. Brand contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 being highest. Source: BrandZ™ / Millward Brown. Brand contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 being highest.
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016
The BrandZ™ Top 100 Most Valuable Chinese Brands 2016
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51 New Oriental Education 1,155 -2% 5
52 Youku Tudou Technology 1,076 NEW 4
53 Harbin Beer Alcohol 1,011 23% 4
54 Bright Dairy Food & Dairy 1,011 -1% 5
55 Wu Liang Ye Alcohol 1,002 28% 4
56 Snow Beer Alcohol 997 9% 4
57 CR Sanjiu Healthcare 909 25% 3
58 Luzhou Laojiao Alcohol 875 27% 4
59 Hainan Airlines Airlines 866 37% 2
60 Lao Feng Xiang Jewelry Retailer 859 40% 5
61 Great Wall Cars 767 36% 1
62 Dabao Personal Care 742 -1% 2
63 Robam Home Appliances 724 49% 5
64 Gemdale Real Estate 664 36% 2
65 Industrial Bank Banks 653 17% 1
66 Yonghui Superstores Retail 651 45% 2
67 Longfor Real Estate 649 16% 3
68 Sina Technology 628 -43% 5
69 Herborist Personal Care 591 NEW 4
70 Anta Apparel 580 45% 3
71 R&F Properties Real Estate 530 20% 3
72 Eastern Gold Jade Jewelry Retailer 518 41% 4
73 Belle Apparel 479 -35% 5
74 Home Inn Hotels 479 3% 4
75 Suofeiya Furniture 462 29% 5
76 Anerle Baby Care 460 NEW 4
77 Gujing Gong Jiu Alcohol 445 25% 4
78 Yanjing Beer Alcohol 438 -6% 4
79 Sanquan Food & Dairy 418 4% 4
80 China Taiping Insurance 411 70% 1
81 Mizone Soft drinks 398 NEW 4
82 Supor Home Appliances 389 59% 4
83 China Everbright Bank Banks 387 11% 2
84 Hanting Hotels 357 3% 4
85 SOHO China Real Estate 356 -8% 3
86 Greentown China Real Estate 346 16% 2
87 Quanjude Catering 342 9% 5
88 Hisense Home Appliances 342 14% 2
89 Fortune Food & Dairy 338 13% 5
90 Ming Jewelry Jewelry Retailer 335 29% 4
91 Xueersi Education 290 33% 4
92 Pearl River Alcohol 289 -17% 3
93 CHJ Jewellery Jewelry Retailer 288 NEW 4
94 CITS Travel Agencies 284 32% 2
95 TCL Home Appliances 273 59% 2
96 Jinjiang Inn Hotels 273 47% 4
97 Youngor Apparel 259 11% 3
98 Spring Airlines Airlines 252 NEW 1
99 Changan Cars 245 NEW 1
100 Zhong Hua Personal Care 245 6% 5
Source: BrandZ™ / Millward Brown. Brand contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 being highest. Source: BrandZ™ / Millward Brown. Brand contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 being highest.
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Brand Contribution
Brand Contribution
Brand Value %Change 2016 vs. 2015
Brand Value %Change 2016 vs. 2015
Brand ValueUS$ Mil.
Brand ValueUS$ Mil.
Brand BrandCategory Category
T H I S G E N E R AT I ON I S G ROW I NG U P W E L L E D UCAT E D
W I T H H I G H E X P E C TAT I ON S FO R T RU S T WORT H Y P RODUC T S .
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The China Top 100 Brands in Brief
COMPANY Industrial & Commercial Bank of China, Ltd.BRAND VALUE US$ 34,276 MillionYEAR-ON-YEAR CHANGE -1%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1984
ICBC was originally a state-owned commercial bank. In 2006, it became a publicly traded entity (listed on the Hong Kong and Shanghai Stock Exchanges) with a major stake held by the Chinese government.
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COMPANY Tencent Holdings, Ltd.BRAND VALUE US$ 82,107 MillionYEAR-ON-YEAR CHANGE 24%HEADQUARTERS ShenzhenINDUSTRY TechnologyYEAR FORMED 1998
Founded in 1998, Tencent is China’s most used internet service portal, offering value-added internet, mobile services (including WeChat), telecoms, and online advertising services. It was listed on the Hong Kong Stock Exchange in 2004.
Tencent
COMPANY Alibaba Group Holding, Ltd.BRAND VALUE US$ 47,605 MillionYEAR-ON-YEAR CHANGE -20%HEADQUARTERS HangzhouINDUSTRY Retail YEAR FORMED 1999
Alibaba was founded in 1999. Today, Alibaba combines into one ecosystem the e-commerce and social network equivalents of Amazon, eBay, PayPal and Groupon, along with a music streaming service called Xiami, similar to Spotify.
Alibaba ICBC
COMPANY China Mobile Ltd.BRAND VALUE US$ 57,157 MillionYEAR-ON-YEAR CHANGE 2%HEADQUARTERS BeijingINDUSTRY Telecom ProvidersYEAR FORMED 1997
China Mobile is owned by SOE (State Owned Enterprise) China Mobile Communications Corporation. It was listed on the New York and Hong Kong Stock Exchanges in 1997.
China Mobile
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The China Top 100 Brands in Brief
COMPANY China Petroleum & Chemical CorporationBRAND VALUE US$ 12,717 MillionYEAR-ON-YEAR CHANGE -18%HEADQUARTERS BeijingINDUSTRY Oil & Gas YEAR FORMED 2000
China Petrochemical Corporation (Sinopec Group) is a large scale petroleum and petrochemical enterprise group. An SOE (State Owned Enterprise), Sinopec listed on the Hong Kong, London and New York Stock Exchanges in 2000 and the Shanghai Stock Exchange in 2001.
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COMPANY Ping An Insurance (Group) Company of China, Ltd.BRAND VALUE US$ 15,624 MillionYEAR-ON-YEAR CHANGE 41%HEADQUARTERS ShenzhenINDUSTRY Insurance YEAR FORMED 1988
Ping An is a holding company whose subsidiaries mainly deal with insurance, banking, and financial services. The company was founded in 1988; it listed on the Hong Kong Stock Exchange in 2004, and on the Shanghai Stock Exchange in 2007.
Ping An
COMPANY Bank of China Ltd.BRAND VALUE US$ 12,974 MillionYEAR-ON-YEAR CHANGE 9%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1912
Bank of China was established in 1912 with the formation of modern China and served as the country’s central bank until the establishment of the People’s Republic of China in 1949. Bank of China was listed on the Hong Kong and Shanghai Stock Exchanges in 2006.
Bank of China Sinopec
COMPANY China Life Insurance Co Ltd.BRAND VALUE US$ 15,504 MillionYEAR-ON-YEAR CHANGE 53%HEADQUARTERS BeijingINDUSTRY InsuranceYEAR FORMED 2003
China Life is part of China Life Insurance (Group) Company, a state-owned firm that was spun off in 1996 from its predecessor, People’s Insurance Company of China (PICC, which was founded in 1949). China Life was listed on the New York and Hong Kong Stock Exchanges in 2003, and on the Shanghai Stock Exchange in 2007.
China Life
COMPANY Baidu Inc.BRAND VALUE US$ 26,849 MillionYEAR-ON-YEAR CHANGE -13%HEADQUARTERS BeijingINDUSTRY TechnologyYEAR FORMED 2000
COMPANY Huawei Technologies Co., Ltd.BRAND VALUE US$ 18,501 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ShenzhenINDUSTRY TechnologyYEAR FORMED 1987
COMPANY Agricultural Bank of China Ltd.BRAND VALUE US$ 16,239 MillionYEAR-ON-YEAR CHANGE 5%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1951
COMPANY China Construction Bank CorporationBRAND VALUE US$ 19,720 MillionYEAR-ON-YEAR CHANGE -6%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1954
Baidu is China’s most successful search engine. In addition to its core web search services it provides many online media marketing and community based platforms. Founded by Robin Li in 2000, Baidu was first listed on the NASDAQ in 2005.
From small beginnings as a sales agent for Private Branch Exchange (PBX) switches, Huawei has grown to become the largest telecoms equipment manufacturer in the world. In 2015, Huawei was the only Chinese company – out of the 91 mainland Chinese companies listed on the Fortune Global 500 list – earning more revenue abroad than in China.
From its origins as the Agricultural Cooperative Bank, it has evolved from a state-owned specialized bank to a wholly state-owned commercial bank and subsequently a state-controlled commercial bank. In 2010 it became a public shareholding commercial bank listed on the Shanghai and Hong Kong exchanges.
Founded in 1954 as a wholly state-owned bank called People’s Bank of China, today it is one of the nation’s ‘big four’ commercial banks. It was listed on the Hong Kong Stock Exchange in 2005, and on the Shanghai Stock Exchange in 2007.
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Huawei Agricultural Bank of China
China Construction Bank
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The China Top 100 Brands in Brief
COMPANY China Mengniu Dairy Co Ltd.BRAND VALUE US$ 4,755 MillionYEAR-ON-YEAR CHANGE -2%HEADQUARTERS HohhotINDUSTRY Food & DairyYEAR FORMED 1999
The China Mengniu Dairy (Group) Company produces and markets dairy products to customers in China and internationally. Its product range includes sterilized milk, milk beverages, yogurt, ice cream, and milk powder. Mengniu was listed on the Hong Kong Stock Exchange in 2004.
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COMPANY China Merchants Bank Co Ltd.BRAND VALUE US$ 6,631 MillionYEAR-ON-YEAR CHANGE 17%HEADQUARTERS ShenzhenINDUSTRY BanksYEAR FORMED 1987
Since its inception 24 years ago, CMB has grown from a small bank with one branch and over thirty employees into a nationwide joint-stock commercial bank that has over 800 branches and over 50,000 employees. It was listed on the Shanghai Stock Exchange in 2002, and on the Hong Kong Stock Exchange in 2006.
China Merchants Bank
COMPANY Air China Ltd.BRAND VALUE US$ 4,902 MillionYEAR-ON-YEAR CHANGE 26%HEADQUARTERS BeijingINDUSTRY AirlinesYEAR FORMED 1988
The original Air China was established in 1988. In 2004, as a result of the Civil Aviation System Reform Program of 2002, the airline was consolidated with China National Aviation Company and China Southwest Airlines to create the new Air China Company. China’s largest airline, it was listed on the Hong Kong and London Stock Exchanges in 2004, and subsequently on the Shanghai Stock Exchange.
Air China Mengniu
COMPANY Inner Mongolia Yili Industrial Group Co Ltd.BRAND VALUE US$ 6,235 MillionYEAR-ON-YEAR CHANGE 22%HEADQUARTERS HohhotINDUSTRY Food & Dairy YEAR FORMED 1993
From its roots as a dairy co-operative in 1956, Yili has grown to become China’s largest dairy producer. Today, the Yili Group consists of five major business divisions including liquid milk, ice cream, milk powder, yogurt and raw milk, with nearly 100 subsidiaries and more than 1000 products. The company was listed on the Shanghai Stock Exchange in 1996.
Yili
COMPANY Kweichow Moutai Co Ltd.BRAND VALUE US$ 11,507 MillionYEAR-ON-YEAR CHANGE 51%HEADQUARTERS RenhuaiINDUSTRY AlcoholYEAR FORMED 1951
COMPANY JD.com Inc.BRAND VALUE US$ 9,422 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS BeijingINDUSTRY Retail YEAR FORMED 1998
COMPANY China Telecom Corp Ltd.BRAND VALUE US$ 9,003 MillionYEAR-ON-YEAR CHANGE -9%HEADQUARTERS BeijingINDUSTRY Telecom ProvidersYEAR FORMED 2000
COMPANY PetroChina Co Ltd.BRAND VALUE US$ 10,709 MillionYEAR-ON-YEAR CHANGE -11%HEADQUARTERS BeijingINDUSTRY Oil & GasYEAR FORMED 1999
Moutai is a distilled Chinese liquor. In 1951, the Chinese government combined several Moutai producers into a single state-owned venture. That company was restructured into the current corporate entity in 1997. Moutai was listed on the Shanghai Stock Exchange in 2001.
JD.com (or Jingdong Mall) was founded as Jingdong Century Trading Co. selling magneto-optical products but quickly diversified into selling electronics, mobiles and computers. Today it is China’s largest online direct sales company and is listed on the NASDAQ.
One of China’s three leading telecom operators, China Telecom provides internet access, mobile communications, information technology applications and fixed-line telephone services. China Telecom Corporation operates through two holding companies that were listed on the New York Stock Exchange in 2002, and the Hong Kong Stock Exchange in 2006.
An oil and gas company, PetroChina is the nation’s biggest oil producer and seller. The listed arm of state-owned China National Petroleum Corporation, it has been on the New York and Hong Kong Stock Exchanges since 2000, and on the Shanghai Stock Exchange since 2007.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY China Vanke Co Ltd.BRAND VALUE US$ 3,038 MillionYEAR-ON-YEAR CHANGE 18%HEADQUARTERS ShenzhenINDUSTRY Real EstateYEAR FORMED 1984
Vanke is a leading real estate company in China. Since 1988 its main business has been real estate development and property services. Having strategically focused on city clusters, Vanke has established its presence in 65 cities in mainland China. It was listed on the Shenzhen Stock Exchange in 1991.
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COMPANY China Minsheng Banking Corp Ltd.BRAND VALUE US$ 3,441 MillionYEAR-ON-YEAR CHANGE 12%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1996
Established in 1996, China Minsheng Bank is a national joint-stock commercial bank with investments mainly from non-state-owned enterprises (NSOEs). It was listed on the Shanghai Stock Exchange in 2003 and on the Hong Kong Stock Exchange in 2009.
China Minsheng Bank
COMPANY Yunnan Baiyao Group Co Ltd.BRAND VALUE US$ 3,046 MillionYEAR-ON-YEAR CHANGE 11%HEADQUARTERS KunmingINDUSTRY Healthcare YEAR FORMED 1902
The company was established in 1902, after a Chinese medicine practitioner discovered that baiyao, a powder derived from ginseng and other roots, helped treat wounds and staunch blood. Yunnan Baiyao was listed on the Shenzhen Stock Exchange in 1993.
Yunnan Baiyao Vanke
COMPANY Suning Commerce Group Co Ltd.BRAND VALUE US$ 3,310 MillionYEAR-ON-YEAR CHANGE 68%HEADQUARTERS NanjingINDUSTRY Retail YEAR FORMED 1990
China’s leading electronic retailer has approximately 1,600 outlets and is renowned for the strength of its logistics operation. In 2015, Alibaba purchased a 19.9% stake in the company in a significant step towards the integration of online and offline shopping. Established in 1990, Suning was listed on the Shenzhen Stock Exchange in 2004.
Suning
COMPANY China Unicom Hong Kong Ltd.BRAND VALUE US$ 4,708 MillionYEAR-ON-YEAR CHANGE -14%HEADQUARTERS BeijingINDUSTRY Telecom Providers YEAR FORMED 2009
COMPANY China Pacific Insurance Group Co Ltd.BRAND VALUE US$ 4,304 MillionYEAR-ON-YEAR CHANGE 36%HEADQUARTERS ShanghaiINDUSTRY InsuranceYEAR FORMED 1991
COMPANY Lenovo Group Ltd.BRAND VALUE US$ 3,788 MillionYEAR-ON-YEAR CHANGE 16%HEADQUARTERS BeijingINDUSTRY Technology YEAR FORMED 1984
COMPANY Bank of Communications Company, Ltd.BRAND VALUE US$ 4,499 MillionYEAR-ON-YEAR CHANGE 17%HEADQUARTERS ShanghaiINDUSTRY BanksYEAR FORMED 1908
China Unicom was established in 2009 as a result of the merger of former China Unicom and China Netcom. A world leading telecom operator, it has subsidiaries and provincial branches in 31 provinces across China, and five overseas operating companies around the world. China Unicom is listed on the New York and Hong Kong Stock Exchanges.
CPIC (China Pacific Insurance Company) is one of China’s leading integrated insurance groups. It provides a broad range of risk and protection solutions, investment and wealth management and asset management services to about 80 million customers throughout the country. The company was listed on the Shanghai Stock Exchange in 2007, and on the Hong Kong Stock Exchange in 2009.
Lenovo (known as Legend Holdings until 2004) is one of the world’s leading personal technology companies. Its products include PCs, smartphones, tablets and smart TVs. It has more than 57,000 employees across 60 countries, serving customers in over 160 countries worldwide. Lenovo is traded on the Hong Kong Stock Exchange.
One of China’s oldest banks, Bank of Communications was restructured in 1986, in line with national economic reforms. Today, its scope includes commercial banking, securities services, trust services, financial leasing, fund management, insurance, and offshore financial services. It was listed on the Hong Kong Stock Exchange in 2005 and the Shanghai Stock Exchange in 2007.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Evergrande Real Estate GroupBRAND VALUE US$ 2,288 MillionYEAR-ON-YEAR CHANGE 49%HEADQUARTERS GuangzhouINDUSTRY Real Estate YEAR FORMED 1996
Evergrande Real Estate Group is a conglomerate specializing in residential buildings. Since its inception around the time of the Asian economic crisis of 1997 it has applied the strategy of “short development time, low price, fast construction”. Evergrande was listed on the Hong Kong Stock Exchange in 2009.
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COMPANY Midea Group Co Ltd.BRAND VALUE US$ 2,495 MillionYEAR-ON-YEAR CHANGE 54%HEADQUARTERS ShundeINDUSTRY Home Appliances YEAR FORMED 1968
Founded in 1968, Midea has grown from a local workshop into a leading consumer appliances and heating, ventilation and air-conditioning (HVAC) systems manufacturer, with operations around the world. In China, Midea has extensive distribution in first and second tier markets through major retailers, relying on specialty shops in lower tier markets. It is listed on the Shenzhen Stock Exchange.
Midea
COMPANY Qingdao Haier Co Ltd.BRAND VALUE US$ 2,360 MillionYEAR-ON-YEAR CHANGE 22%HEADQUARTERS QingdaoINDUSTRY Home AppliancesYEAR FORMED 1984
Established as Qingdao Refrigerator Company in 1984, Haier was the successor to an old factory that, since 1949, had been run as a collectively owned enterprise. Qingdao Haier Company, Ltd. is listed on the Shanghai Stock Exchange. Its China subsidiary, Haier Electronics Group Company, Ltd. trades on the Hong Kong Stock Exchange.
Haier Evergrande Real Estate
COMPANY China Southern Airlines Co Ltd.BRAND VALUE US$ 2,456 MillionYEAR-ON-YEAR CHANGE 44%HEADQUARTERS GuangzhouINDUSTRY AirlinesYEAR FORMED 1991
From Guangzhou, its primary hub, and other Chinese cities, China Southern Airlines connects to around 1,025 destinations in 187 countries directly or with its carrier partners in Skyteam. China Southern was listed on the New York and Hong Kong Stock Exchanges in 1997, and on the Shanghai Stock Exchange in 2003.
China Southern Airlines
COMPANY China Eastern Airlines Corp Ltd.BRAND VALUE US$ 3,015 MillionYEAR-ON-YEAR CHANGE 49%HEADQUARTERS ShanghaiINDUSTRY AirlinesYEAR FORMED 1988
COMPANY Dalian Wanda Commercial Properties Co., Ltd.BRAND VALUE US$ 2,921 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS BeijingINDUSTRY Real EstateYEAR FORMED 2002
COMPANY Leshi Internet Information & Technology Corporation, BeijingBRAND VALUE US$ 2,805 MillionYEAR-ON-YEAR CHANGE 81%HEADQUARTERS BeijingINDUSTRY TechnologyYEAR FORMED 2004
COMPANY PICC Property & Casualty Co Ltd.BRAND VALUE US$ 2,975 MillionYEAR-ON-YEAR CHANGE 25%HEADQUARTERS BeijingINDUSTRY Insurance YEAR FORMED 1949
China Eastern Airlines is a SOE (State Owned Enterprise) and one of China’s three largest airlines. It flies a fleet of more than 430 long-haul and short-haul aircraft and serves nearly 80 million travelers annually. It is listed on the New York, Hong Kong and Shanghai Stock Exchanges.
Wanda Commercial Properties is a leader in sales, leasing and management of shopping centers, hotels and office space. Wanda Commercial was listed on the Hong Kong Stock Exchange in 2014.
Letv is engaged in a range of businesses, including internet-streamed TV, video production and distribution, smart gadgets, large-screen applications, and e-commerce. It was listed on the Shenzhen Stock Exchange in 2010.
Founded as a SOE (State Owned Enterprise) in 1949, the People’s Insurance Company of China (PICC) was spun off from its corporate parent People’s Insurance Company Group of China in 2003. Its insurance services include cover for property, marine cargo, tourists, households, and automobiles. It is traded on the Hong Kong Stock Exchange.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Ctrip.com International Ltd.BRAND VALUE US$ 1,711 MillionYEAR-ON-YEAR CHANGE 40%HEADQUARTERS ShanghaiINDUSTRY Travel AgenciesYEAR FORMED 1999
Founded in 1999, Ctrip provides travel services for both consumers and businesses. Its offering includes transportation, accommodation, vacation packages and tours. The company has been listed on the NASDAQ Stock Exchange since 2003.
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COMPANY Qihoo 360 Technology Co Ltd.BRAND VALUE US$ 1,903 MillionYEAR-ON-YEAR CHANGE 20%HEADQUARTERS BeijingINDUSTRY TechnologyYEAR FORMED 2005
Founded in 2005, 360 is an internet security company. It produces PC security and mobile security systems used in Apple iOS, Android and Windows phone operating systems. It has also developed into the smart gadget business such as smartphones, smart watches etc. 360 was listed on the New York Stock Exchange in 2011.
360
COMPANY Beijing Tongrentang Co Ltd.BRAND VALUE US$ 1,808 MillionYEAR-ON-YEAR CHANGE 41%HEADQUARTERS BeijingINDUSTRY Health CareYEAR FORMED 1669
Tong Ren Tang was founded in 1669 and provided medicines for the royal pharmacy of the imperial palace of the Qing Dynasty for 188 years. Today, Tong Ren Tang has over 1,500 pharmacies and the company’s unique recipes are available in over 40 countries.
Tong Ren Tang Ctrip
COMPANY New China Life Insurance Co Ltd.BRAND VALUE US$ 1,825 MillionYEAR-ON-YEAR CHANGE 42%HEADQUARTERS BeijingINDUSTRY Insurance YEAR FORMED 1996
New China Life Insurance offers individual life insurance, group life, accident and health insurance policies. Founded in 1996, the company was listed on the Shanghai and Hong Kong Stock Exchanges in 2011.
New China Life
COMPANY Henan Shuanghui Investment & Development Co Ltd.BRAND VALUE US$ 2,265 MillionYEAR-ON-YEAR CHANGE -17%HEADQUARTERS LuoheINDUSTRY Food & DairyYEAR FORMED 1969
COMPANY Gree Electric Appliances, Inc. of ZhuhaiBRAND VALUE US$ 1,947 MillionYEAR-ON-YEAR CHANGE 9%HEADQUARTERS ZhuhaiINDUSTRY Home Appliances YEAR FORMED 1991
COMPANY NetEase Inc.BRAND VALUE US$ 1,933 MillionYEAR-ON-YEAR CHANGE 73%HEADQUARTERS GuangzhouINDUSTRY TechnologyYEAR FORMED 1997
COMPANY Poly Real Estate Group Co Ltd.BRAND VALUE US$ 2,113 MillionYEAR-ON-YEAR CHANGE 20%HEADQUARTERS GuangzhouINDUSTRY Real Estate YEAR FORMED 1992
China’s largest meat processing business, Henan Shuanghui Investment and Development Company is a subsidiary of international pork producer WH Group Ltd, which also owns Smithfield Foods. It was listed on the Shenzhen Stock Exchange in 1998.
A leading air conditioner and white goods maker, Gree does business worldwide as an OEM (Original Equipment Manufacturer). Established in 1991, it has since built its brand presence in 100 countries.
Founded in 1997, NetEase develops and operates popular online PC and mobile games, advertising services, e-mail services and e-commerce platforms. The company also offers multi-platform access to an array of free and fee-based community and communication services, including websites, content channels and social instant messaging applications.
Poly Real Estate Group Company is a subsidiary of state-owned China Poly Group Corporation. Its principal areas of operation are the design, development, construction and sale of residential and commercial properties, as well as the provision of property management services. It was listed on the Shanghai Stock Exchange in 2006.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Youku Tudou Inc.BRAND VALUE US$ 1,076 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS BeijingINDUSTRY TechnologyYEAR FORMED 2012
Youku Tudou is the result of the 2012 merger of China’s two biggest video sites. An internet television platform, it enables users to view and share a wide array of content across multiple devices. Measured by user time spent, Youku Tudou is China’s third largest website.
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COMPANY Tsingtao Brewery Co Ltd.BRAND VALUE US$ 1,440 MillionYEAR-ON-YEAR CHANGE -20%HEADQUARTERS QingdaoINDUSTRY AlcoholYEAR FORMED 1903
Founded by German and British settlers in 1903, and one of China’s oldest beer brands, Tsingtao Beer is distributed to more than 80 countries and regions. The company is listed on the Hong Kong and Shanghai Stock Exchanges.
Tsingtao Beer
COMPANY New Oriental Education & Technology Group Inc.BRAND VALUE US$ 1,155 MillionYEAR-ON-YEAR CHANGE -2%HEADQUARTERS BeijingINDUSTRY Education YEAR FORMED 1993
Founded in 1993, New Oriental offers a range of educational programs, services and products. The company has an extensive network of schools, bookstores and learning centers and an online network with nearly 12 million registered users. Its Koolearn website offers over 2000 subjects. New Oriental is traded on the New York Stock Exchange.
New Oriental Youku Tudou
COMPANY Yantai ChangYu Pioneer Wine Co Ltd.BRAND VALUE US$ 1,162 MillionYEAR-ON-YEAR CHANGE 25%HEADQUARTERS YantaiINDUSTRY Alcohol YEAR FORMED 1892
ChangYu pioneered the modern era of Chinese winemaking 100 years ago, with the importation and cultivation of European vines. The company became publicly traded on the Shenzhen Stock Exchange in 1997.
ChangYu
COMPANY Jiangsu Yanghe Brewery Joint-Stock Co Ltd.BRAND VALUE US$ 1,648 MillionYEAR-ON-YEAR CHANGE 24%HEADQUARTERS SuqianINDUSTRY Alcohol YEAR FORMED 1949
COMPANY ZTE CorporationBRAND VALUE US$ 1,548 MillionYEAR-ON-YEAR CHANGE 46%HEADQUARTERS ShenzhenINDUSTRY TechnologyYEAR FORMED 1985
COMPANY Country Garden Holdings Co Ltd.BRAND VALUE US$ 1,468 MillionYEAR-ON-YEAR CHANGE 11%HEADQUARTERS ShundeINDUSTRY Real Estate YEAR FORMED 1992
COMPANY BYD Co Ltd.BRAND VALUE US$ 1,573 MillionYEAR-ON-YEAR CHANGE 20%HEADQUARTERS ShenzhenINDUSTRY CarsYEAR FORMED 1995
The history of Yanghe Daqu and Shuanggo Daqu liquors can be traced back to 1618 and the Tang dynasty. Today, the Yanghe Distillery is one of the largest liquor producers in China. Employing more than 26,000 people, it has 179 branch companies and offices across the country. It was listed on the Shenzhen Stock Exchange in 2009.
ZTE makes telecoms equipment and systems; its key customers are China’s leading telecoms service providers. Also active abroad, the company’s revenue is evenly split between its domestic and international businesses. ZTE is listed on the Hong Kong and Shenzhen Stock Exchanges.
Established in 1992, Country Garden is engaged in property development, construction, decoration, property management, and hotel operations. It builds primarily in the suburbs around China’s first tier cities and selected smaller markets with substantial growth potential. It was listed on the Hong Kong Stock Exchange in 2007.
BYD began as a rechargeable battery manufacturer and subsequently diversified to become a leader in the production and marketing of electric and hybrid vehicles. The rapid growth of smartphones saw a corresponding increase in the company’s handset component and assembly business. BYD was listed on the Hong Kong Stock Exchange in 2002.
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MO S T C H I N E S E FO R E CA S T A B R I G H T F U T U R E
A N D E X P E C T T U R B U L E NC E TO PA S S .
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Lao Feng Xiang Co Ltd.BRAND VALUE US$ 859 MillionYEAR-ON-YEAR CHANGE 40%HEADQUARTERS ShanghaiINDUSTRY Jewelry Retailer YEAR FORMED 1848
In 1848 the first Lao Feng Xiang Jewelry Shop opened, in Shanghai. Today the company has a network of 2700 retail stores in mainland China’s primary and secondary cities as well as overseas in Manhattan, USA and Sydney, Australia.
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COMPANY China Resources Sanjiu Medical & Pharmaceutical Co Ltd.BRAND VALUE US$ 909 MillionYEAR-ON-YEAR CHANGE 25%HEADQUARTERS ShenzhenINDUSTRY Healthcare YEAR FORMED 1999
CR Sanjiu distributes its healthcare and pharma products at over 90,000 points of sale and more than 5,000 hospitals throughout China. It is a subsidiary of Chinese Resources (Holdings) Company, Ltd, a SOE (State Owned Enterprise). The company was listed on the Shenzhen Stock Exchange in 2000.
CR Sanjiu
COMPANY Hainan Airlines Co Ltd.BRAND VALUE US$ 866 MillionYEAR-ON-YEAR CHANGE 37%HEADQUARTERS ShanghaiINDUSTRY AirlinesYEAR FORMED 1993
Hainan Airlines’ first official flight was made in 1993, from Haikou to Beijing. Today the airline operates 500 international and domestic routes, covering 90 cities worldwide. It was listed on the Shanghai Stock Exchange in 1997.
Hainan Airlines Lao Feng Xiang
COMPANY Luzhou Laojiao Co Ltd.BRAND VALUE US$ 875 MillionYEAR-ON-YEAR CHANGE 27%HEADQUARTERS LuzhouINDUSTRY AlcoholYEAR FORMED 1950
Luzhou Laojiao is a strong spirit (more than 50% alcohol) with a history that goes back to the Ming Dynasty. The spirit is exclusively produced by the Luzhou Laojiao Company, a SOE (State Owned Enterprise).
Luzhou Laojiao
COMPANY Anheuser-Busch InBev NV/SA.BRAND VALUE US$ 1,011 MillionYEAR-ON-YEAR CHANGE 23%HEADQUARTERS HarbinINDUSTRY AlcoholYEAR FORMED 1900
COMPANY Wu Liang Ye Yibin Company, Ltd.BRAND VALUE US$ 1,002 MillionYEAR-ON-YEAR CHANGE 28%HEADQUARTERS YibinINDUSTRY AlcoholYEAR FORMED 1959
COMPANY China Resources Beer Holdings Company, Ltd.BRAND VALUE US$ 997 MillionYEAR-ON-YEAR CHANGE 9%HEADQUARTERS BeijingINDUSTRY AlcoholYEAR FORMED 1994
COMPANY Bright Dairy & Food Co Ltd.BRAND VALUE US$ 1,011 MillionYEAR-ON-YEAR CHANGE -1%HEADQUARTERS ShanghaiINDUSTRY Food & Dairy YEAR FORMED 1996
Founded by a Russian businessman in 1900, Harbin Brewery Group Ltd is one of the oldest beer companies in China. After the foundation of the People’s Republic of China, Harbin became one of the beer giants in northeast China. In 2004, Harbin Brewery was bought by Anheuser-Busch InBev.
Wu Liang Ye is a distiller of a variety of types of baijiu, of which Wu Liang Ye is the best known. The Group is a SOE (State Owned Enterprise) whose other interests include printing, pharmaceuticals and logistics.
CR Snow first began brewing Snow Beer in 1994. Today, the Snow Beer product range is brewed under a joint venture between China Resources Beer Holdings Co Ltd, a SOE (State Owned Enterprise), and SABMiller.
Bright Dairy & Food Company is principally engaged in the processing, production and distribution of dairy products. It was formed in 1996 from Shanghai Dairy Company and Shanghai Industrial Holdings of Hong Kong. It became a publicly traded company in 2002 and is listed on the Shanghai Stock Exchange.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Sina CorporationBRAND VALUE US$ 628 MillionYEAR-ON-YEAR CHANGE -43%HEADQUARTERS ShanghaiINDUSTRY TechnologyYEAR FORMED 1998
A leading internet portal and media company, Sina operates three primary businesses: Sina.com, an online portal that offers news, entertainment and other content; Sina.cn, a mobile portal; and Weibo.com, the social networking and micro-blogging site. Founded in 1998, Sina was listed on the NASDAQ Stock Exchange in 2000.
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COMPANY Industrial Bank Co Ltd.BRAND VALUE US$ 653 MillionYEAR-ON-YEAR CHANGE 17%HEADQUARTERS FuzhouINDUSTRY BanksYEAR FORMED 1988
Founded in 1988, Industrial Bank is one of China’s first joint stock commercial banks. It offers standard deposit, loan, wealth management, credit card, and e-banking products and services to personal and commercial banking customers. Now a national institution, it was listed on the Shanghai Stock Exchange in 2007.
Industrial Bank
COMPANY Longfor Properties Co Ltd.BRAND VALUE US$ 649 MillionYEAR-ON-YEAR CHANGE 16%HEADQUARTERS ChongqingINDUSTRY Real EstateYEAR FORMED 1993
Longfor is a residential and commercial property development, investment and management company. One of the first developers of shopping malls in China, Longfor has been operating commercial properties for more than a decade. Longfor Properties was listed on the Hong Kong Stock Exchange in 2009.
Longfor Sina
COMPANY Yonghui Superstores Co Ltd.BRAND VALUE US$ 651 MillionYEAR-ON-YEAR CHANGE 45%HEADQUARTERS FuzhouINDUSTRY Retail YEAR FORMED 2001
Yonghui is a hypermarket and supermarket operator based in Fuzhou, operating retail outlets across 17 provinces in China. In 2015 Yonghui, sold a 10% share to JD.com as part of a strategy to accelerate its e-commerce capabilities. Yonghui Superstores was listed on the Shenzhen Stock Exchange in 2010.
Yonghui Superstores
COMPANY Great Wall Motor Co Ltd.BRAND VALUE US$ 767 MillionYEAR-ON-YEAR CHANGE 36%HEADQUARTERS BaodingINDUSTRY CarsYEAR FORMED 1984
COMPANY Hangzhou Robam Appliances Co Ltd.BRAND VALUE US$ 724 MillionYEAR-ON-YEAR CHANGE 49%HEADQUARTERS HangzhouINDUSTRY Home Appliances YEAR FORMED 1979
COMPANY Gemdale CorporationBRAND VALUE US$ 664 MillionYEAR-ON-YEAR CHANGE 36%HEADQUARTERS ShenzhenINDUSTRY Real EstateYEAR FORMED 1988
COMPANY Johnson & JohnsonBRAND VALUE US$ 742 MillionYEAR-ON-YEAR CHANGE -1%HEADQUARTERS BeijingINDUSTRY Personal Care YEAR FORMED 1999
One of China’s earliest car brands, Great Wall is best known for its popular SUV models; it also focuses on pick-up trucks and sedans. It targets tier two and three cities primarily. Russia, Chile and South Africa are the brand’s key export markets. The company was listed on the Hong Kong Stock Exchange in 2003, and on the Shanghai Stock Exchange in 2011.
Founded in 1979, Robam’s predecessor was the Hangzhou Yuhang Red Star Hardware Factory which focused on manufacturing kitchen appliances, as it still does today. The company is known for its R&D - working with the aviation industry it developed the first cooker hood in China. Robam was listed on the Shenzhen Stock Exchange in 2010.
Established in 1988 and in the real estate business since 1993, Gemdale develops residential housing throughout much of China and is present in 25 major cities. It also operates a real estate financing company called Wins Investment. Gemdale was listed on the Shanghai Stock Exchange in 2001.
Dabao’s personal care products, in particular its skin care line, are well established across China. Originally owned by the Beijing Sanlu Factory and the Beijing Dabao Company, the brand was purchased by Johnson & Johnson in 2008.
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Hengan International Group Co., Ltd.BRAND VALUE US$ 460 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS JinjiangINDUSTRY Baby CareYEAR FORMED 1985
Anerle is the largest local Chinese diaper brand produced by Hengan Group in China. Established in 1985, the group has become China’s leading manufacturer of sanitary napkins. Its products also include diapers, wet wipes and tissues. The company has been listed on the Hong Kong Stock Exchange since 1998.
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COMPANY Belle International Holdings Ltd.BRAND VALUE US$ 479 MillionYEAR-ON-YEAR CHANGE -35%HEADQUARTERS ShenzhenINDUSTRY ApparelYEAR FORMED 1991
Belle International Holdings is a well-known footwear, sportswear and apparel manufacturer and retailer, with over 20,000 retail outlets in mainland China. It was formed in 1991 and listed on the Hong Kong Stock Exchange in 2007.
Belle
COMPANY Suofeiya Home Collection Co Ltd.BRAND VALUE US$ 462 MillionYEAR-ON-YEAR CHANGE 29%HEADQUARTERS ZengchengINDUSTRY Furniture YEAR FORMED 2003
Suofeiya Home Collection develops, produces and sells custom wardrobes and matching custom furniture. Formed in 2003, the company’s sales network now covers the entire first and second tier cities as well as most of the third and fourth tier cities. Suofeiya is traded on the Shenzhen Stock Exchange.
Suofeiya Anerle
COMPANY Home Inns & Hotels Management Inc.BRAND VALUE US$ 479 MillionYEAR-ON-YEAR CHANGE 3%HEADQUARTERS ShanghaiINDUSTRY Hotels YEAR FORMED 2002
Home Inns Group is a leading economy hotel chain in China (measured by the number of hotels and hotel rooms as well as geographic coverage). In 2015, Home Inns Hotel Group operated across 338 cities in China with a total of 2,661 hotels. The company has been traded on the NASDAQ Stock Exchange since 2006.
Home Inn
COMPANY Shanghai Jahwa United Co., Ltd.BRAND VALUE US$ 591 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ShanghaiINDUSTRY Personal Care YEAR FORMED 1998
COMPANY Guangzhou R&F Properties Co Ltd.BRAND VALUE US$ 530 MillionYEAR-ON-YEAR CHANGE 20%HEADQUARTERS GuangzhouINDUSTRY Real EstateYEAR FORMED 1994
COMPANY Eastern Gold Jade Co Ltd.BRAND VALUE US$ 518 MillionYEAR-ON-YEAR CHANGE 41%HEADQUARTERS ShenzhenINDUSTRY Jewelry Retailer YEAR FORMED 1993
COMPANY Anta Sports Products Ltd.BRAND VALUE US$ 580 MillionYEAR-ON-YEAR CHANGE 45%HEADQUARTERS JinjiangINDUSTRY ApparelYEAR FORMED 1991
Herborist is owned by Shanghai Jahwa, one of the largest personal care brands in China (founded in 1898, originally called Hong Kong Kwong Sang Hong). The Herborist beauty and skin care product range is based on Chinese traditional medicine techniques that have also passed modern lab tests. Shanghai Jahwa was listed on the Shanghai Stock Exchange in 2001.
The Guangzhou R&F Properties Company focuses on property design, development, construction, sale, management and other property related services in China. Founded in 1994, the company was listed on the Hong Kong Stock Exchange in 2005.
Eastern Gold Jade’s main business consists of the processing, wholesale, franchising and retail of jewelry and accessories, and the wholesale of jade raw materials. It was listed on the Shanghai Stock Exchange in 1997.
ANTA Sports Products designs, manufactures and retails sports footwear, apparel and accessories. Anta was founded in 1991, and was listed on the Hong Kong Stock Exchange in 2007
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY China Lodging Group Ltd.BRAND VALUE US$ 357 MillionYEAR-ON-YEAR CHANGE 3%HEADQUARTERS KunshanINDUSTRY Hotels YEAR FORMED 2005
China Lodging Group began hotel operations in 2005. Most of its locations operate as Hanting Hotel, an economy brand. The Group offers one other economy brand, Hi Inn, and four mid/upscale brands: Ji Hotel, Starway Hotel, Joya Hotel and Manxin Hotels and Resorts. It has been listed on the NASDAQ Stock Exchange since 2010.
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COMPANY Danone SABRAND VALUE US$ 398 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ParisINDUSTRY Soft Drinks YEAR FORMED 1919
Mizone, a flavored sports water, is a Danone brand. Danone’s activities in China began with the launch of a yogurt range in the 1980s. Since then, the company has continued to introduce a broad range of both international and local product lines for the Chinese market. Mizone is available in 1200 cities and 3000 towns in China.
Mizone
COMPANY China Everbright Bank Co Ltd.BRAND VALUE US$ 387 MillionYEAR-ON-YEAR CHANGE 11%HEADQUARTERS BeijingINDUSTRY BanksYEAR FORMED 1992
China Everbright Bank was founded in 1992, under the approval of the State Council and the People’s Bank of China. The Bank is primarily engaged in corporate banking, retail banking and treasury operations.
China Everbright Bank Hanting
COMPANY Zhejiang Supor Cookware Co Ltd.BRAND VALUE US$ 389 MillionYEAR-ON-YEAR CHANGE 59%HEADQUARTERS HangzhouINDUSTRY Home AppliancesYEAR FORMED 1994
Initially known for its pressure cookers, today Supor offers over 800 products. These fall into three distinct families: cookware, small kitchen appliances and large kitchen appliances. Supor also serves as an OEM (Original Equipment Manufacturer). It was listed on the Shenzhen Stock Exchange in 2004.
Supor
COMPANY Anhui Gujing Distillery Co Ltd.BRAND VALUE US$ 445 MillionYEAR-ON-YEAR CHANGE 25%HEADQUARTERS BozhouINDUSTRY AlcoholYEAR FORMED 1959
COMPANY Sanquan Food Co Ltd.BRAND VALUE US$ 418 MillionYEAR-ON-YEAR CHANGE 4%HEADQUARTERS ZhengzhouINDUSTRY Food & DairyYEAR FORMED 1993
COMPANY China Taiping Insurance Holdings Co Ltd.BRAND VALUE US$ 411 MillionYEAR-ON-YEAR CHANGE 70%HEADQUARTERS Hong KongINDUSTRY InsuranceYEAR FORMED 1929
COMPANY Beijing Yanjing Brewery Co Ltd.BRAND VALUE US$ 438 MillionYEAR-ON-YEAR CHANGE -6%HEADQUARTERS BeijingINDUSTRY Alcohol YEAR FORMED 1980
This strong, aromatic liquor is reputed to have been popular since 196 A.D. Today it is produced by the Anhui Gujing Distillery Company, the main business of Anhui Gujing Group Company, Ltd., a SOE (State Owned Enterprise).
Sanquan’s founder, Chen Zemine, is considered one of the pioneers in the frozen food market in China, having decided to give up his 19-year career as a surgeon and turn to the production of frozen rice balls when he was 50 years old. Today, Sanquan is one of the four biggest players in China’s frozen product market and the leader in the frozen processed food category. Sanquan Food is traded on the Shenzhen Stock Exchange.
China Taiping Insurance Group is a Chinese state-owned financial and insurance group. Currently the longest standing national brand in China’s insurance industry, it became an industry leader in the 1940s (having been founded in Shanghai in 1929). In 2000, China Taiping became the first insurance company of the People’s Republic of China to be publicly listed on the Hong Kong Stock Exchange.
One of China’s largest beer brands, Yanjing Beer was named for the ancient capital that occupied the area now known as Beijing. The brand leads the market in Beijing and is strong in the Guangxi and Hunan provinces and Inner Mongolia. It’s exported to over 20 countries. The Beijing Yanjing Brewery Company was listed on the Shenzhen Stock Exchange in 1997.
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Gujing Gong Jiu
Sanquan China Taiping
Yanjing Beer
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Guangzhou Zhujiang Brewery Co Ltd.BRAND VALUE US$ 289 MillionYEAR-ON-YEAR CHANGE -17%HEADQUARTERS GuangzhouINDUSTRY AlcoholYEAR FORMED 1985
Pearl River was established in 1985 as a SOE (State Owned Enterprise), in conjunction with InBev, the Belgian brewer, which in 2008 acquired Anheuser-Busch to become AB InBev. Pearl River was listed on the Shenzhen Stock Exchange in 2010.
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COMPANY China Foods Ltd.BRAND VALUE US$ 338 MillionYEAR-ON-YEAR CHANGE 13%HEADQUARTERS BeijingINDUSTRY Food & DairyYEAR FORMED 1993
The Fortune brand is a leading consumer-pack edible oil brand in China and is ranked number two nationwide in terms of market share. China Food is a subsidiary of COFCO (China National Cereals, Oil and Foodstuffs Import and Export Corporation), a SOE (State Owned Enterprise).
Fortune
COMPANY TAL Education GroupBRAND VALUE US$ 290 MillionYEAR-ON-YEAR CHANGE 33%HEADQUARTERS BeijingINDUSTRY EducationYEAR FORMED 2003
Xueersi provides tutoring services to students from pre-school to the twelfth grade through small classes and online courses. It began operating in Beijing in 2003 and now has a network of 289 learning centers as well as an online platform. TAL Education Group is listed on the New York Stock Exchange.
Xueersi Pearl River
COMPANY Zhejiang Ming Jewelry Co Ltd.BRAND VALUE US$ 335 MillionYEAR-ON-YEAR CHANGE 29%HEADQUARTERS ShaoxingINDUSTRY Jewelry Retailer YEAR FORMED 1994
Ming Jewelry designs, produces and distributes jewelry. Its main products are gold, platinum, and inlaid jewelry, which it sells domestically, particularly in Zhejiang and Jiangsu Provinces. The company has been listed on the Shenzhen Stock Exchange since 2011.
Ming Jewelry
COMPANY SOHO China Ltd.BRAND VALUE US$ 356 MillionYEAR-ON-YEAR CHANGE -8%HEADQUARTERS BeijingINDUSTRY Real EstateYEAR FORMED 1995
COMPANY China Quanjude Group Co Ltd.BRAND VALUE US$ 342 MillionYEAR-ON-YEAR CHANGE 9%HEADQUARTERS BeijingINDUSTRY Catering YEAR FORMED 1864
COMPANY Hisense Kelon Electrical Holdings Co Ltd.BRAND VALUE US$ 342 MillionYEAR-ON-YEAR CHANGE 14%HEADQUARTERS QingdaoINDUSTRY Home AppliancesYEAR FORMED 1969
COMPANY Greentown China Holdings Ltd.BRAND VALUE US$ 346 MillionYEAR-ON-YEAR CHANGE 16%HEADQUARTERS HangzhouINDUSTRY Real Estate YEAR FORMED 1995
SOHO China is China’s largest pure prime office developer. Its operations cover a full range of business of development, leasing, property management and property investment. The company is listed on the Hong Kong Stock Exchange.
Quanjude was established in 1864 during the Qing Dynasty. Although Peking Duck can trace its history many centuries back, Quanjude’s version – using open ovens and non-smoky hardwood fuel to add a subtle fruity flavor – was originally reserved for the imperial families. Today, Quanjude operates over 100 roast duck restaurants, primarily in China but also overseas. Quanjude is listed on the Shenzhen Stock Exchange.
The company manufactures and sells refrigerators, air conditioners, freezers and washing machines with the brand names Hisense, Kelon and Ronshen. First established in 1984 as Guangdong Shunde Pearl River Factory, it was renamed in 1992, and listed on the Hong Kong Stock Exchange in 1996, and on the Shenzhen Stock Exchange in 1999. It’s a subsidiary of the SOE (State Owned Enterprise) Hisense Company, which was incorporated in 1979, in Qingdao.
Greentown China Holdings builds up-scale residential properties. Based in Zhejiang Province, its property projects focus on the most economically prosperous cities in the province, such as Hangzhou and Ningbo. The brand was formed in 1995 and listed on the Hong Kong Stock Exchange in 2006.
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SOHO China
Quanjude Hisense
Greentown China
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04 > The China Top 100 TOP 100 Most Valuable Chinese Brands 2016
The China Top 100 Brands in Brief
COMPANY Unilever Plc.BRAND VALUE US$ 245 MillionYEAR-ON-YEAR CHANGE 6%HEADQUARTERS ShanghaiINDUSTRY Personal CareYEAR FORMED 1954
The Zhong Hua brand has been around for over 60 years. In 1994 it became part of the Unilever oral care brand portfolio and is variously known as Signal, Pepsodent, Mentadent, Aim or P/S, depending on the national market.
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COMPANY Youngor Group Co., Ltd.BRAND VALUE US$ 259 MillionYEAR-ON-YEAR CHANGE 11%HEADQUARTERS NingboINDUSTRY ApparelYEAR FORMED 1979
A maker and retailer of men’s apparel, the company operates around 1,300 physical stores and has a partnership with Vip.com, an online discount retailer of branded products. Youngor also manufactures for other brands. It was listed on the Shanghai Stock Exchange in 1998.
Youngor
COMPANY Chongqing Changan Automobile Co., Ltd.BRAND VALUE US$ 245 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ChongqingINDUSTRY Cars YEAR FORMED 1862
Changan has a 154 year history in manufacturing, the last 32 years of which have been primarily in automobile production. Changan Automobile is a SOE (State Owned Enterprise). Its focus is no-frills passenger cars and microvans, small trucks and vans for commercial use. The Chongqing Changan Automobile Company is listed on the Shenzhen Stock Exchange.
Changan Zhong Hua
COMPANY Spring Airlines Co., Ltd.BRAND VALUE US$ 252 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ShanghaiINDUSTRY Airlines YEAR FORMED 2004
Spring Airlines was founded in 2004 by China’s domestic travel agency, Spring Travel. The intervening decade has seen it grow to become China’s premier budget airline, flying over 100 routes across China and Asia. It was listed on the Shanghai Stock Exchange in 2015.
Spring Airlines
COMPANY TCL CorporationBRAND VALUE US$ 273 MillionYEAR-ON-YEAR CHANGE 59%HEADQUARTERS HuizhouINDUSTRY Home AppliancesYEAR FORMED 1981
COMPANY Shanghai Jinjiang International Hotels Development Co., Ltd.BRAND VALUE US$ 273 MillionYEAR-ON-YEAR CHANGE 47%HEADQUARTERS ShanghaiINDUSTRY Hotels YEAR FORMED 1996
COMPANY China International Travel Service Corp Ltd.BRAND VALUE US$ 284 MillionYEAR-ON-YEAR CHANGE 32%HEADQUARTERS BeijingINDUSTRY Travel AgenciesYEAR FORMED 1954
CHJ Jewellery has more than 600 franchise stores across over 190 cities in China, making it one of the largest jewelry chains in the country. CHJ Jewellery has been listed on the Shenzhen Stock Exchange since 2010.
TCL manufactures and sells TVs, air conditioners, refrigerators and other home appliances and electronics worldwide, through three subsidiary TCL companies, including TCL Multimedia Technology Holdings. TCL Corporation was listed on the Shenzhen Stock Exchange in 2004.
Jinjiang Inn Hotels’ brand portfolio covers two types of hotels: Full Service and Select Service. The Group owns or manages hotels in China and (primarily through its 50 percent holding in Interstate Hotels and Resorts) worldwide. Shanghai Jinjiang International was established in 1996 as a SOE (State Owned Enterprise) and was listed on the Hong Kong Stock Exchange the following year.
China’s heritage brand in the travel category, CITS is a SOE (State Owned Enterprise) with experience and long-established contacts overseas. Its parent company, China International Travel Service Corporation also engages in duty-free sales and was listed on the Shanghai Stock Exchange in 2009.
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TCL Jinjiang Inn
CITS
COMPANY Guangdong Chj Industry Co., Ltd.BRAND VALUE US$ 288 MillionYEAR-ON-YEAR CHANGE NEWHEADQUARTERS ShantouINDUSTRY Jewelry Retailer YEAR FORMED 1996
CON S UM E R S W I L L L I K E LY FAVOR B R A N D S T H AT PA R T N E R
W I T H T H EM ON T H E I R J O U R N E Y TO A B E T T E R L I F E .
BRAND CONTRIBUTION
Strong Brand Contributionhelps improvefuture earnings
A high Brand Contribution index – on a scale of one to five, five being the highest – suggests that a brand is resilient and plays a big role in driving earnings. Brand Contribution is calculated from ongoing, in-depth, worldwide quantitative WPP BrandZ™ consumer research that distinguishes the BrandZ™ brand valuation methodology from all competitors.
Of the BrandZ™ Top 20 Brand Contribution leaders, all but six are market-driven rather than state-owned brands. For that reason, most of the Brand Contribution leaders, 13 of them to be exact, rank 50 and below in the BrandZ™ China Top 100, because the lower half of the ranking is mostly populated with fast growing, market-driven brands, typically strong in Brand Contribution.
Brand Contribution is the unique BrandZ™ metric
for assessing the most important, yet elusive,
aspect of a brand: how it plays out in the mind
of the consumer. Brand Contribution measures
the impact of brand alone, without financials or other
activation factors.
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Except for three brands, the same brands that comprise the 2016 BrandZ™ Top 20 Brand Contribution leaders also ranked in the Top 20 last year. This consistency reflects a defining characteristic of Brand Contribution; it accrues over time into a durable force that can stabilize brand value against normal market fluctuations.
The Top 20 Brand Contribution leaders represent 11 categories. Technology, and food and dairy are represented with four brands each; alcohol with three brands; and appliances with two brands. Only one brand appears in each of these categories: apparel, catering, education, furniture, jewelry retailer, hotels, and personal care. This category diversity indicates that building a strong brand is important and possible across broad sectors of the economy.
Source: BrandZ™ / Millward Brown
Brand Contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 highest.
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
Brand Brand Contribution Category Ownership Top 100
Rank 2016
1 Letv 5 Technology Market-Driven 32
2 Mengniu 5 Food & Dairy Competitive SOE 20
3 Baidu 5 Technology Market-Driven 5
4 Tencent 5 Technology Market-Driven 1
5 Yili 5 Food & Dairy Market-Driven 18
6 Fortune 5 Food & Dairy Competitive SOE 89
7 Tsingtao Beer 5 Alcohol Market-Driven 49
8 New Oriental 5 Education Market-Driven 51
9 Lao Feng Xiang 5 Jewelry Retailer Competitive SOE 60
10 Sina 5 Technology Market-Driven 68
11 Quanjude 5 Catering Competitive SOE 87
12 Robam 5 Home Appliances Market-Driven 63
13 Belle 5 Apparel Market-Driven 73
14 Bright Dairy 5 Food & Dairy Competitive SOE 54
15 Moutai 5 Alcohol Competitive SOE 13
16 Suofeiya 5 Furniture Market-Driven 75
17 Zhong Hua 5 Personal Care Market-Driven 100
18 Supor 4 Home Appliances Market-Driven 82
19 Home Inn 4 Hotels Market-Driven 74
20 ChangYu 4 Alcohol Market-Driven 50
The Top 20 in Brand Contribution
NEWCOMERS
10 newcomers from nine categories reach Top 100
They reflect many of the trends shaping the BrandZ™ China Top 100, including the growth of mobile and e-commerce, the increase in overseas business, and the evolution of consumer buying priorities as indicated by the shift towards premium and the willingness to spend money on travel.
The most valuable newcomer, Huawei, entered the BrandZ™ China Top 100 at number seven. Historically, more of a business-to-business brand, the inclusion of Huawei in the BrandZ™ China Top 100 ranking reflects its increasing business-to-consumer presence. The global telecommunications giant, which derives 62 percent of its revenue from outside of China, shipped over 100 million smartphones in 2015, a 44 percent increase. Huawei smartphones are known for offering quality functionality and design at a more affordable price than Apple or Samsung.
Ten newcomer brands from nine categories appeared in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. Technology is represented twice. The baby care and soft drinks categories are new to the BrandZ™ China Top 100. These categories also are represented: retail, real estate, personal care, jewelry retailer, airlines, and cars.
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The other new technology entrant, Youku Tudou, ranks 52 in the BrandZ™ China Top 100. An online video entertainment site, Youku Tudou is a combination of Netflix and Hulu with 200 million monthly visitors. Its revenue, derived from both subscribers and advertisers, increased 66 percent. The acquisition of Youku Tudou by Alibaba was expected to happen early in 2016.
Online retailer JD.com entered the BrandZ™ China Top 100 at number 15, after a strong year when annual active customer accounts increased 59 percent. The brand grew sales at a faster rate than rival Alibaba, in part because of its partnership with online portal Tencent, which enables users of Tencent’s WeChat messaging service to seamlessly move between social networking and e-commerce. Known for reliable products and delivery, JD.com competed effectively with Alibaba’s Tmall and Taobao Marketplace sites.
Source: BrandZ™ / Millward Brown
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
The Newcomer Brands
In the real estate category, the Wanda brand appeared for the first time in the BrandZ™ China Top 100, at rank 31. The brand is owned by Dalian Wanda Commercial Properties Company Ltd., a private conglomerate that develops multiuse commercial complexes in which office buildings and luxury hotels drive customer traffic to the companion shopping centers. The group also operates cinemas and is aggressively diversifying into other fields, such as sports.
Herborist, a personal care brand, and number 69 in the BrandZ™ China Top 100, has successfully marketed the appeal of natural ingredients and traditional Chinese medicine. The brand reaches international consumers through e-commerce and a physical presence in Europe in the French-owned Sephora stores and in Germany’s Douglas chain.
Brand Top 100 Rank Category Brand Value
US$ Mil. Ownership
Huawei 7 Technology 18,501 Market-Driven
JD.com 15 Retail 9,422 Market-Driven
Wanda 31 Real Estate 2,921 Market-Driven
Youku Tudou 52 Technology 1,076 Market-Driven
Herborist 69 Personal Care 591 Market-Driven
Anerle 76 Baby Care 460 Market-Driven
Mizone 81 Soft Drinks 398 Market-Driven
CHJ Jewellery 93 Jewelry Retailer 288 Market-Driven
Spring Airlines 98 Airlines 252 Market-Driven
Changan 99 Cars 245 Competitive SOE
The growth of the baby care category, and diapers specifically, drove the brand value growth of Anerle, number 76 in the BrandZ™ China Top 100. Urban parents are willing to pay a premium for disposable diapers, a fairly new category in China, dominated by international brands and enjoying tremendous e-commerce penetration and sales growth.
Mizone is a bottled water brand with functional benefits, marketed by Danone, the French food and dairy
giant. At a time when sales of many FMCG products have moderated, bottled water remains relatively strong and able to command a price premium. Mizone has effectively reached its target audience of young people with social media and online gaming.
Spring Airlines appeared in the BrandZ™ China Top 100 for the first time, at rank 98. An entrepreneurial brand formed in 2004 to provide more Chinese consumers with affordable
air travel, the low-cost carrier floated a successful IPO in January 2015, to fund accelerated expansion and meet rising demand.
State-owned Changan, one of China’s leading car brands, entered the BrandZ™ China Top 100 at number 99. It maintains joint ventures with overseas brands such as Ford and Peugeot. The presence of Changan in the BrandZ™ China Top 100 indicates the growing influence of Chinese brand cars in a category still dominated by imports.
Brand Category OwnershipRevenue % from
International Business
Top 100 Rank 2016
1 Lenovo Technology Competitive SOE 68% 24
2 Huawei Technology Market-Driven 62% 7
3 ZTE Technology Market-Driven 50% 47
4 TCL Home Appliances Competitive SOE 41% 95
5 Air China Airlines Strategic SOE 36% 19
6 China Eastern Airlines
Airlines Strategic SOE 33% 29
7 PetroChina Oil & Gas Strategic SOE 32% 14
8 Hisense Home Appliances Competitive SOE 30% 88
9 Midea Home Appliances Market-Driven 24% 33
10 Sinopec Oil & Gas Strategic SOE 22% 12
11 China Southern Airlines
Airlines Strategic SOE 21% 34
12 Bank of China Banks Strategic SOE 20% 11
13 BYD Cars Market-Driven 13% 46
14 Spring Airlines Airlines Market-Driven 13% 98
15 Hainan Airlines Airlines Strategic SOE 13% 59
16 Haier Home Appliances Market-Driven 12% 35
17 Gree Home Appliances Market-Driven 11% 39
18 Alibaba Retail Market-Driven 9% 3
19 Supor Home Appliances Market-Driven 9% 82
20 Tencent Technology Market-Driven 8% 1
OVERSEAS REVENUE
Appliance, airlines and technology brands lead in overseas revenue
Around two-thirds of Chinese believe that building strong brands worldwide is essential for advancing the Chinese Dream of a more prosperous, equitable and internationally respected China. And, in a virtuous circle, achievement of the Chinese Dream should help elevate Brand China. These findings are contained in the BrandZ™ research report, The Power and Potential of the Chinese Dream. (For more information, please visit www.wpp.com/wpp/marketing/brandz/the-chinese-dream).
The top three brands with the greatest proportion of revenue derived from overseas business come from the technology category. Huawei, a newcomer to the BrandZ™ China Top 100, joined Lenovo and ZTE, which were present last year.
Chinese brands continue to grow the percentage of annual revenue they
derive from overseas activities. The expansion of international business
is especially important as the growth of the domestic
economy slows and Chinese companies attempt
not only to sell products outside of China, but also to
raise awareness of Chinese brands, or Brand China.
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Fifteen of the Top 20 in overseas revenue come from only three categories: home appliances, with six brands; airlines, five brands; and technology, four brands. The other four categories represented are oil and gas with two brands, and with one brand apiece, banks, cars and retail. Reflecting the rebalancing of China’s economy, the seven categories include both State Owned Enterprises (SOEs) and market-driven brands.
Half of the Top 20 brands are market-driven and half are SOEs. Seven are Strategic SOEs, meaning they are in fundamental industries, such as oil and gas or banking, which influence and implement government policy. Three brands are Competitive SOEs in consumer-facing categories like home appliances.
Source: BrandZ™ / Millward Brown
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
The Top 20 in Overseas Revenue
OVERSEAS REVENUE
Lenovo, the world’s largest PC maker, led the Top 20. It continued to grow its PC, mobile and enterprise businesses outside of China, which helped balance the softening of the Chinese market. Lenovo gained 68 percent of total revenue from overseas business, up from 62 percent a year ago. By offering smartphone quality at a more affordable price than market leaders Apple or Samsung, Huawei successfully gained market share not only in emerging markets, but increasingly even in Europe. Meanwhile ZTE expanded its presence in the Android market in the US.
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Following the three technology brands, the home appliance brand TCL had the fourth largest proportion of overseas revenue. TCL makes a range of home appliances, but is known chiefly for its TVs. The home appliance brands typically started as Original Equipment Manufacturers (OEMs) making products for other companies to market.
These producers of TVs, white goods or air conditioners, brands like Hisense, Midea, Haier and Gree, increasingly sell under their own brand names through mass-market channels. Significantly, Haier announced plans to acquire the appliance division of General Electric.
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
Top 20 divides evenly between market-driven and SOE brandsHalf of the Top 20 brands are market-driven and half are SOEs. Three of the SOEs - Lenovo, Hisense, and TCL - are Competitive SOEs. The average proportion of overseas revenues of Competitive SOEs is higher than Market-Driven and strategic SOEs in the Top 20, meaning government support remains important for Chinese brands trying to gain a global presence
Source: BrandZ™
The strong presence of the airlines category in the Top 20 in Overseas Revenue is not surprising. But the number of brands increased from four to five this year, with the addition of Spring Airlines, an entrepreneurial brand started in 2004 to provide more affordable domestic travel. All of the airlines brands have benefited from the surge in tourism. Chinese outbound travel grew 12 percent in 2015, according to the World Tourism Organization, an agency of the United Nations.
The largest carriers, Air China and China Eastern Airlines, continue to add international routes and gain passengers through their memberships in, respectively, Star Alliance and SkyTeam Alliance. China Southern Airlines, a strong domestic carrier, is well positioned to link with the connecting flights of international visitors. Hainan Airlines added routes to Australia and Europe.
Strategically important state-owed brands, like Bank of China and the oil and gas giants, PetroChina and Sinopec, continue to derive a major proportion of revenue from overseas businesses. But each brand ranks
lower than it did last year in the Top 20 in Overseas Revenue, because of market conditions and the stronger overseas revenue growth of the technology, home appliances, and airlines brands.
While BYD, the electric car brand, and e-commerce brand Alibaba, derive only a small portion of revenue from overseas business, 13 percent and 9 percent respectively, the growth potential is significant. BYD buses already operate in Europe. Alibaba is aggressively investing for global growth with initiatives like AliExpress, a platform to sell Chinese products to overseas customers, and establishment of a cloud computing center in California.
The average proportion of
overseas revenue by Ownership of the Top 20
brands
10 Brands
21%
3 Brands
46%
7 Brands
25% ■ Market-Driven■ Strategic SOE■ Competitive SOE
BrandBrand Value % Change
2016 vs. 2015Category Ownership
Brand Value
US$ Mil.
Top 100 Rank 2016
1 Letv 81% Technology Market-Driven 2,805 32
2 NetEase 73% Technology Market-Driven 1,933 40
3 China Taiping 70% Insurance Strategic SOE 411 80
4 Suning 68% Retail Market-Driven 3,310 26
5 Supor 59% Home Appliances Market-Driven 389 82
6 TCL 59% Home AppliancesCompetitive
SOE273 95
7 Midea 54% Home Appliances Market-Driven 2,495 33
8 China Life 53% Insurance Strategic SOE 15,504 10
9 Moutai 51% AlcoholCompetitive
SOE11,507 13
10 Robam 49% Home Appliances Market-Driven 724 63
11 China Eastern Airlines 49% Airlines Strategic SOE 3,015 29
12 Evergrande Real Estate 49% Real Estate Market-Driven 2,288 36
13 Jinjiang Inn 47% HotelsCompetitive
SOE273 96
14 ZTE 46% Technology Market-Driven 1,548 47
15 Yonghui Superstores 45% Retail Market-Driven 651 66
16 Anta 45% Apparel Market-Driven 580 70
17 China Southern Airlines 44% Airlines Strategic SOE 2,456 34
18 New China Life 42% Insurance Strategic SOE 1,825 42
19 Tong Ren Tang 41% HealthcareCompetitive
SOE1,808 43
20 Ping An 41% Insurance Market-Driven 15,624 9
TOP RISERS
Faster growth, lower value brands indicate China market’s potential
At the same time, the total value of the Top 20 Risers decreased to $69.4 billion in 2016, from $123.6 billion in 2015, and $158.6 billion in 2014. Both the increase in Top 20 Riser value growth rate and the decrease in total value are driven by the shift to lower value/faster growth market-driven brands from higher value/slower growth State Owned Enterprises (SOEs).
The number of market-driven brands declined somewhat from a year ago, but the longer-term trend is clear. Eleven market-driven brands made the Top 20 Risers in the China BrandZ™ 2016 ranking, compared with eight brands two years ago. Seven of the Top 20 Risers fall in the second half of the ranking, brands 51 to 100. And
It is getting much tougher to qualify for the Top 20
Risers, the ranking of brands that increased most
in brand value year-on-year. Each Top Riser in the
BrandZ™ Top 100 Most Valuable Chinese Brands
2016 increased by at least 41 percent in brand value. The minimum brand value
threshold for the Top 20 Risers in 2015 was 21
percent, and in 2014 it was only 10 percent.
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15 of Top Riser brands rank below 30. The number of categories represented among the Top Risers remained fairly consistent: 10 in 2016, 12 in 2015, and 10 in 2014, demonstrating that brand value growth potential continues to
cross the economy.
With four entries apiece in the 2016 Top 20 Risers, home appliances and insurance were the most represented
categories, followed by technology, with three brands. The presence of these categories reflects consumption trends. The airlines and retail categories were represented with two brands apiece. One brand from each of these categories appeared in the Top 20 Risers: alcohol, apparel, healthcare, hotels, and real estate.
Source: BrandZ™ / Millward Brown
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
The Top 20 Risers in Brand value
TOP RISERS
INSURANCE AND APPLIANCE BRANDS DOMINATE
With a 70 percent increase in brand value, insurance brand China Taiping, a strategic SOE, ranked third in the Top 20 Risers. Along with China Taiping, which ranks 80 in the BrandZ™ China 100, the other Top Riser insurance brands are China Life, New China Life and Ping An.
The appearance of four insurance brands reflects the growth of a category positioned to meet the financial concerns of China’s expanding middle class. China Life and Ping An marketed aggressively online. With brand value growth of 53 percent and 41 percent, respectively, they also entered the Top 10 of the BrandZ™ China 100.
The home appliances brand Midea, which ranked in the Top 20 Risers in 2014 and 2015, continued to aggressively market at home and overseas. Supor, maker of small appliances, ranked 82 in the BrandZ™ China Top 100, and grew 59 percent in brand value by leveraging its high brand awareness to extend the brand into new product areas.
TCL, ranked 95 in the BrandZ™ China Top 100, enjoyed consumer acceptance as a leading TV brand, while Robam, 63 in the Top 100, introduced a new line of kitchen ranges as part of its effort to position the brand as a leader in the connected home.
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TECHNOLOGY BRANDS LEAD TOP 20
Two market-driven technology brands, Letv and NetEase, ranked one and two, respectively, in the Top 20 Risers, increasing in brand value 81 percent and 73 percent. Along with ZTE, the
third technology leader, these brands ranked below 30 in the
China 100 ranking, indicating the potential for fast-growing, market-driven brands to reshape the Chinese market.
Letv stretched the brand, known originally as a content
provider, to sell smartphones and prepare for the launch of an energy-saving car in 2016. The web portal NetEase expanded the mobile presence of its renowned web games, and benefited as a popular purchase platform for overseas merchandise, at a time when tariff reforms made international brands more affordable.
Ranked 47 in the China Top 100, ZTE, maker of telecommunications equipment, increased activity outside of China, particularly in the US. Rapid expansion of mobile helped drive its optical and 4G LTE solutions businesses. The brand produced solutions for the Internet of Things. Long a maker of handsets for China’s three telecom providers, ZTE shifted strategies, to build and market smartphones under its own brand.
04 > The China Top 100 - Performance Analysis TOP 100 Most Valuable Chinese Brands 2016
AIRLINES AND RETAIL BRANDS SURGE
The vitality of the travel industry propelled the two airline brands, China Eastern Airlines and China Southern Airlines. The airline category grew 39 percent in brand value. With Shanghai as a hub city, China Eastern Airlines experienced strong international travel and expected to receive a boost in 2016, with the opening of Disneyland Shanghai. China Southern Airlines benefited from the increased interest in domestic travel and the expansion of flights between the Chinese mainland and Taiwan.
Although the retail category declined slightly in value, two retail brands ranked in the Top 20 Risers. In just a
few years, Suning transformed from an electronics retailer with too
many physical stores and too little e-commerce presence, to more of a general merchant whose strategic partnership with Alibaba helped transform
its bricks and mortar locations into distribution points and pick-up
locations.
Similarly, Yonghui Superstores focused on expanding e-commerce and refining its supermarket logistics. The brand partnered with e-commerce leader JD.com to implement an O2O strategy. As e-commerce attracted consumers to shop online for most categories, Yonghui’s reputation for fresh foods drove customer traffic to its physical stores.
POSITIONING DRIVES GROWTH
The other Top Riser brands increased brand value because of a variety of category-related and brand-specific reasons. Moutai, the premium brand of Baijiu, the traditional white alcohol, repositioned the brand to reach a wider audience with more popular pricing after government policies discouraging lavish spending impacted sales at the high end.
In the competitive sportswear sector, Anta, known for its strong basketball presence, launched a soccer initiative. The brand’s plans to make and market soccer uniforms align with the Chinese government’s intention to increase the contribution of sports to GDP and also to raise the country’s global competitiveness in soccer.
Tong Ren Tang, the traditional Chinese medicine (TCM) brand founded in 1669, increased its overseas revenue by about a third, based on the growing international acceptance of TCM and the brand’s international presence, with 115 stores in 25 countries and regions.
Jinjang Inn benefited from the surge in Chinese travelers to both domestic and overseas destinations. The brand operates around 880 locations in China and is part of Jinjiang International, which owns or operates hotels worldwide. As the real estate market stabilized, in response to favorable government policies and increased consumer demand, Evergrande Real Estate results improved and the brand launched new projects in 17 cities.
Year
Top 20 Brand Value US$ Mil
Qualifying Brand Value Growth Rate
Market- Driven Firms
# Brands in Top 20
Strategic SOEs
# Brands in Top 20
Competitive SOEs
# Brands in Top 20
2014 158,603 10% 8 4 8
2015 123,645 21% 14 1 5
2016 69,419 41% 11 5 4
Shift to market-driven brands raises Top 20 growth rateThe rate of brand value growth to qualify for the Top 20 Risers has increased from 10 percent to 41 percent over two years, as smaller, market-driven brands (lower value/faster growth) have replaced SOEs (higher value/slower growth). At the same time, the total value of the Top 20 has declined.
Source: BrandZ™ / Millward Brown
A K E Y D R I V E R O F C H I N A ’ S E CONOM I C T R A N S FORM AT I ON
I S T H E D E T E R M I N AT I ON O F T H E P E O P L E TO M A K E I T H A P P E N .
CATEGORY OVERVIEW
Consumer spending impacts categorygrowth and value concentration shift
New spending priorities produced a significant shift in the distribution of the BrandZ™ China Top 100 total value. These include a desire for services and experiences, and a shift in focus from price alone to quality and value for money, with a related willingness to pay a premium, when merited.
Just two years ago, banks accounted for the largest segment of brand value, 30 percent. Banks and telecom providers, two categories dominated by State Owned Enterprises (SOEs), together comprised almost half of the China Top 100 total value. Technology produced just 16 percent of value.
Today, technology, a category known for its market-driven brands, accounts for 27 percent of BrandZ™ China Top 100 value. Banks and telecom providers produce only 32 percent of value, and banks alone contribute less than a fifth. Retail, an inconsequential factor
Despite turbulence in China’s stock market and the economic slowdown, consumers continued to
spend on their daily needs and even on big-ticket items,
with purchasing possibly postponed, but not canceled,
according to BrandZ™ research. How consumers
spent their money is reflected in the relative value changes
across the 23 categories in the BrandZ™ Top 100 Most
Valuable Chinese Brands 2016.
158 159
in 2014, now comprises 12 percent of value, driven by the inclusion of Alibaba and JD.com in the ranking.
The seven categories in the BrandZ™ China Top 100 Brands 2016 that increased most in value, 38 percent or more, include: personal care and jewelry retailers, both up 61 percent, real estate, insurance, airlines, travel agencies, and cars. The next tier of brands, which improved a healthy 29-to-32 percent in brand value, includes technology, home appliances, alcohol and furniture.
The third group of categories – hotels, healthcare, education, food and dairy, and banks – performed more modestly in brand value growth. The following categories declined in brand value: telecom providers, retail, oil and gas, catering and apparel. The baby care and soft drinks categories are new this year to the BrandZ™ China Top 100 ranking.
04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
CategoryCategory Value
% Change 2016 vs. 2015
Category Value
US$ Mil.
Number of Brands in Top 100
Personal Care 61% 1,578 3
Jewelry Retailer 61% 2,000 4
Real Estate 50% 14,371 10
Insurance 44% 40,643 6
Airlines 39% 11,491 5
Travel Agencies 39% 1,996 2
Cars 38% 2,585 3
Technology 32% 141,139 10
Home Appliances 31% 8,529 7
Alcohol 30% 20,815 11
Furniture 29% 462 1
Hotels 11% 1,109 3
Healthcare 5% 5,762 3
Education 3% 1,446 2
Food & Dairy 3% 15,022 6
Banks 3% 98,819 9
Telecom Providers -1% 70,867 3
Retail -2% 60,988 4
Oil & Gas -15% 23,426 2
Catering -29% 342 1
Apparel -46% 1,319 3
Baby Care NEW 460 1
Soft Drinks NEW 398 1
Category Value Changes Market-driven brands rapidly add value
Source: BrandZ™
Source: BrandZ™
2014 2016
Year-on-year category value changes are
based on brands that rank in the BrandZ™
Top 100 Most Valuable Chinese Brands.
The number of brands in each category
varies, from 11 alcohol brands to one brand
in the catering, baby care, furniture, and
soft drinks categories. Stories in this section
of the report describe the dynamics that
influenced value changes in each category.
MEASURING CATEGORY YoY VALUE CHANGES
In just two years, market-driven service categories, like technology, have experienced rapid growth, while state-owned categories, like banks, have declined in value.
■ Retail■ Telecom Providers■ Technology
■ Oil & Gas■ Banking
0%
19%
16%
7%
30%
12%
13%
27%
4%
19%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
Airlines and travel agencies tied for fifth place in the rate of category value
growth, with a 39 percent increase, in the
BrandZ™ Top 100 Most Valuable Chinese Brands 2016. Rising disposable income, growth of tourism,
improved domestic transportation
infrastructure and budget airfares were among the factors driving value increases.
China remained the world’s number one source market for tourism, according to the World Tourism Organization, a United Nations agency (UNWTO). Outbound tourism is expected to increase 11 percent to 133 million visits in 2016, according to the China National Tourism Administration (CNTA). And UNWTO ranks China fourth as a tourism destination after France, the US and Spain, although the rate of inbound tourism has slowed, according to CNTA.
To capitalize on these trends, airlines improved service and marketing, expanded routes and increased affordability. Along with revenue
The alcohol category grew 30 percent in brand value in BrandZ™ Top 100 Most Valuable Chinese Brands 2016, following a 22 percent decline a year earlier when China’s anti-corruption campaign, regulatory reforms, and the economic slowdown hurt beer, baijiu and wine, the category segments included in the ranking.
Several brands drove the overall category improvement with marketing strategies that responded to the changing consumer expectations shaped by regulations and the slower economy. Changing drinking habits also fueled the category’s recovery, with the rise of more social drinking in bars or pubs.
For special occasions, the Chinese continued to prefer their traditional drink, baijiu, the white, high alcohol content drink made from distilled sorghum. But other beverage options, like wine, continued to gain share because of high baijiu prices, evolving tastes, and more women drinkers.
The 11 brands of beer, baijiu and wine included in the 2016 BrandZ™ China Top 100 are, in order of their brand value ranking: Moutai, Yanghe, Tsingtao Beer, ChangYu, Harbin Beer, Wu Liang Ye, Snow Beer, Luzhou Laojio, Gujing Gong Jiu, Yanjing Beer, and Pearl River.
BEER MOVES TO PREMIUM
Beer consumption grew at a weak pace, at least for the mass product, probably impacted by the slowdown in GDP growth and even rainy weather. Although the Internet grew as a beer sales channel, the beer market remained relatively regional and fragmented.
At the same time, strong demand for premium brands continued, reflecting the broader consumer shift to quality. As Chinese brands added premium offerings
gains, depressed oil prices also helped enhance airline profitability. Despite these improvements airlines continued to score low in RepZ, the BrandZ™ measurement of corporate reputation.
Five airline brands are included in the BrandZ™ China Top 100: Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines and Spring Airlines, a budget brand. Domestic budget air travel is one of the fastest growing industry segments, with the number of budget travelers now totaling around 7 percent of China’s domestic air travel market of about 390 million annual fliers, according to some estimates.
Air China, number 19 in the BrandZ™ China Top 100, increased its international travel. It added overseas routes and derived over one-third of its revenue from overseas business, helped in part by its link with other international carriers through its membership in Star Alliance.
China Eastern Airlines, ranked 29, usually benefits from business at its heavily travelled Shanghai hub, but the airline increased its marketing in anticipation of the 2016 opening of Disneyland Shanghai. China Eastern Airlines is part of SkyTeam Alliance, which includes Delta.
they faced competition from global brands positioned at the high end of the market.
Snow Beer introduced more premium variations. Although not well known outside of China, Snow Beer leads the world in total consumption. Tsingtao Beer faced pressure because of its mid-market positioning and its large exposure in restaurants, where government efforts to retrain extravagance impacted sales.
Harbin Beer, one of the oldest breweries in the north, successfully increased popularity. Pearl River, especially strong in the south, in Guangdong province, grew sales, but costs increased.
Despite weaker volume growth, Yanjing Beer continued to dominate in Beijing and certain central and western regions. It is the only Chinese brand without a foreign partner, such as AB-InBev or SABMiller.
The planned merger of the giant global brewers would consolidate market share and raise antitrust issues that could affect brands like Snow Beer, jointly held by SABMiller and China Resources Enterprises, a state-owned company.
BAIJIU AND WINE ADJUST TO REGULATIONS
The baijiu and wine brands, especially impacted by the government efforts to curb extravagance, continued to adjust to market conditions and anticipated category consolidation.
Moutai, China’s leading premium baijiu, increased 51 percent in brand value, having declined 28 percent a year earlier. Considered an exclusive brand, Moutai
Airlines
STRONG AIR TRAVEL INCREASE LIFTS CATEGORY BRAND VALUE
Alcohol
BRANDS ADJUST STRATEGIES FOR CHANGINGCONSUMER TASTES AND REGULATORY IMPACT
China Southern Airlines, ranked 34, a domestic travel leader, benefited from the surge in local tourism and increased travel between the Chinese mainland and Taiwan. China Southern Airlines is part of SkyTeam Alliance, which positions it well to handle the domestic connecting flights of international visitors.
Hainan Airlines, ranked 59, continued to expand international routes, and advertised extensively overseas. It re-entered Australia and announced the first flight between Manchester and Beijing. It planned to introduce a Rome-Xi’an route, as part of China’s One Belt, One Road initiative to add trading links. Xi’an and Rome were terminuses of the Silk Road.
Spring Airlines appeared in the BrandZ™ China Top 100 for the first time, at rank 98. The leading low-cost carrier, formed in 2004, floated a successful IPO in January 2015, to fund accelerated expansion. Although the airline initially focused on domestic travel, it has announced plans for international flights to Moscow, Melbourne, Tokyo and other destinations. (Please see the interview with Spring Airlines Chairman Wang Zhenghua featured in this report.)
adjusted its pricing, marketing and distribution to become more accessible while protecting its reputation for quality.
In addition, Moutai tried to help western drinkers cultivate a taste for baijiu. San Francisco proclaimed November 15, 2015, Moutai Day, to commemorate
the centennial anniversary of the brand’s introduction to the city.
As Wu Liang Ye investigated introducing its baijiu to western markets, it improved domestic results by lowering prices and controlling its sales
and marketing costs.
Luzhou Laojiao, also a premium baijiu, continued to feel the impact of the government’s effort to curb extravagance. It attempted to further trim its product portfolio and rely more on data to formulate strategy. Gujing Gong Jiu strengthened its position as a leading premium baijiu in certain provinces, like Anhui.
Yanghe focused on its mid-price baijiu offering, which helped the brand reach younger drinkers. To expand the market, Yanghe also introduced a baijiu with lower alcohol content, called Weifenzi. In addition, the brand continued to expand its presence beyond Jinagsu province, on the coast north of Shanghai.
ChangYu, one of the pioneer brands in Chinese wine making, announced plans to buy a majority stake in a Spanish wine maker. This transaction advances ChangYu’s plan to increase imports, expands its portfolio of wines, and provides greater access to wine making best practices.
39%30%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The value of the apparel category declined 46 percent, the steepest drop of any of the 23 categories tracked in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. The decline followed a 37 percent drop a year ago.
While some apparel brands improved in brand value, most continued to experience the impact of competition from international brands, the cost of excess physical stores, and the rapid rise of e-commerce. The three apparel brands that remain in the BrandZ™ China top 100, compared with seven a year ago, are: Anta, Belle, and Youngor. BrandZ™ includes general apparel, sports apparel and footwear in the apparel category definition.
Anta, a maker and marketer of sportswear, introduced running shoes with special technology and co-branded some of its offering with the National Basketball Association. The brand also entered a new sport, soccer, in an important strategic move that coincides with the Chinese government’s intention to raise China’s presence in this popular international sport.
Anta improved its e-commerce presence at the same time that it opened larger stores and closed smaller ones. It operated 7,340 retail outlets at the end
The baby care category appears for the first time in the BrandZ™ Top 100 Most Valuable Chinese Brands, driven by the brand Anerle, a newcomer at number 76. The Hengan Group, a Chinese fast moving consumer goods (FMCG) manufacturer, specializing in household paper and personal hygiene products, makes and markets Anerle disposable diapers, and promoted the brand in maternity shops and through e-commerce.
Relatively new to China, the disposable diaper category is crowded with international brands anticipating significant growth potential because of current low category penetration, increased affluence, desire for convenience, and the repeal of the one child policy. In addition, diapers were among products that qualified for lower tariffs at China’s new cross border e-commerce zones.
Although, the economic slowdown hurt diaper sales at the low end of the market, premium priced products appealed to wealthier members of the middle class as they shifted purchasing
of June 2015. Especially strong in lower tier cities, Anta has also established its Fila brand, acquired in 2009, in China’s larger cities. Anta operates retail outlets in Southeast Asia, Eastern Europe and the Middle East. Anta rose 45 percent in brand value.
The sports segment of the apparel category should benefit from the Chinese government’s determination to expand the contribution of sports to GDP, which is relatively low compared with other industrialized countries. New apps and the introduction of Tencent’s WeChat Sports also increased attention on fitness.
International competition and channel disruption particularly impacted the shoe brand Belle, as customer traffic declined at traditional department stores, where much of its merchandise is sold. Belle sportswear sales improved, however Belle declined 35 percent in brand value. Youngor, a major supplier of menswear, especially suits and shirts, in China and abroad, rose 11 percent in brand value, following a 26 percent decline a year ago.
priorities from price alone to quality and value for money. Lower raw material costs, specifically the drop in prices for petroleum products, helped boost
category profits.
The growth of the diaper sector was part of an overall increase in sales of baby products. Sales of baby products rose 7.3 percent year-on-year in 27
Chinese cities studied by Kantar Worldpanel, compared with a
3.6 percent growth a year earlier, and 2.8 percent for FMCG products overall.
E-commerce proved an especially productive channel for diapers, which experienced both high penetration and sales. Between 2012 and 2014, almost half of all households that purchased diapers, bought diapers at least once online, and e-commerce accounted for about a third of all diapers sold, according to Kantar Worldpanel. Online spending for diapers increased at a 41 percent compounded annual growth rate between 2012 and 2014.
Apparel
E-COMMERCE AND INTERNATIONAL COMPETITORS IMPACT VALUE GROWTH
Baby Care
SHIFTS TO PREMIUM AND E-COMMERCEPROPEL CATEGORY TO RANKING DEBUT
46%
NEW
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The modest 3 percent increase in value for the banks category is a substantial improvement from the 16 percent decline a year ago. The fluctuation in value illustrates how closely Chinese banks are tied to the performance of the nation’s economy and the impact of government regulation.
The nine banks brands included in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016 comprise less than a fifth of the ranking’s value, down from 30 percent in 2014. This decline resulted in part from the rise of technology and e-commerce brands that account for an increasing share of BrandZ™ China Top 100 value.
The banks and technology categories are represented by three brands each in the China Top 10 in the 2016 ranking, compared with four bank brands and two technology brands a year ago, before smart phone maker Huawei, entered the BrandZ™ China Top 100, at rank seven, and Bank of China dropped to number 11.
The technology brands challenge banks in particular, because of the growing popularity of mobile banking, including Internet peer-to-peer lending. Regulatory reforms to encourage more competition also continued to impact bank profitability. Banks are freer now
than in the past to set interest rates offered on deposits, for example.
Banks
CHINA’S ECONOMY CHALLENGES BRANDS,BUT OVERSEAS PRESENTS OPPORTUNITIES
The car category increased 38 percent in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. Each of the three car brands in the ranking increased in brand value. They are BYD, Great Wall, and Changan, which appears in the BrandZ™ China Top 100 for the first time.
China remained number one worldwide in vehicle sales with 24.6 million vehicles sold, according to the China Association of Automobile Manufacturers (CAAM). Although sales slumped during most of 2015, they picked up toward the end of the year, after a government tax break encouraged purchasing. A separate government stimulus sparked sales of electric and hybrid cars.
The pace of car sales in China declined to 4.7 percent year-on-year growth, because of the economic slowdown, the stock market decline and government driving restrictions aimed at abating air pollution. But BrandZ™ research conducted late in 2015 found that consumers overwhelmingly planned to pursue big-ticket purchase plans, possibly delaying, but not postponing them.
SUVs drove China car industry growth. With a 52.4 percent increase in sales, SUVs accounted for a quarter of all cars sold, according to the CAAM. Great Wall’s Haval H6 model has been China’s most popular SUV for almost three years, according to reports. Great Wall increased 36 percent in brand value. Changan, a State Owned Enterprise, joined the BrandZ™ China Top 100 at number 99. Changan is one of the leading four Chinese car brands and maintains important joint ventures with several overseas car brands.
BYD led sales of electronic vehicles and raised its international profile with export deals, including plans to build a fleet of electric buses for London, which President Xi Jinping announced during a visit to the UK. The brand’s electric buses already operate at Amsterdam’s Schiphol Airport. BYD brand value rose 20 percent. To accelerate acceptance of electric vehicles in China, the government plans to have in place a national charging station network in five years, funded by public-private partnerships, according to China’s National Energy Administration.
Cars
GOVERNMENT INCENTIVES DRIVE SALES, DESPITE SLOWER ECONOMY
38% Although most cars were sold through traditional channels,
online sales, insignificant in most of the world, are becoming a factor
in China. During China’s Singles Day shopping event, on November 11, 2015, Alibaba’s Tmall.com sold over 6,500 cars. The purchases were an example of O2O coordination, as customers purchased cars online but picked them up at car dealer locations.
Overseas business improved for some bank brands, however, as the International Monetary Fund added the Chinese renminbi as a key global currency, joining the dollar, euro, pound and yen. The government’s Belt and Road initiative to promote international trade also supported overseas Chinese banking activities.
The nine banks ranked in the BrandZ™ China Top 100, in order of their brand value, are: ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, China Merchants Bank, Bank of Communications, China Minsheng Bank, Industrial Bank and China Everbright Bank. All nine banks but one, China Minsheng Bank, are state owned.
3%
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The catering industry experienced doubled-digit growth in 2015, according to the China Cuisine Association, as business picked up for the first time since the government inaugurated its crackdown on extravagant spending and public corruption.
The industry benefited from increased consumer affluence and the ongoing shift in attitudes towards eating out, once viewed as an experience reserved for special occasions and now seen as a more routine and affordable convenience.
Market repositioning was among the factors that drove the brand value improvement. Brands formerly dependent on a narrow band of more affluent diners broadened their appeal to a wider audience.
However, as the market rebounded, consumer choice increased and brands competed fiercely. Some of the international brands, which had struggled to restore trust after food safety scandals, faced local Chinese operators empowered by mobile home delivery apps affiliated with Baidu, Alibaba or Tencent.
One catering brand dropped out of the BrandZ™ Top 100 Most Valuable Chinese Brands 2016, leaving only Quanjude, which operates over 100 roast duck restaurants. Because of the change, the category declined 29 percent.
China’s competitive, test-focused education system continued to drive demand for education services. Language training, test preparatory courses, and after-school tutoring attracted students, as adults sought to improve their prospects in the domestic and global economies, and parents prepared their children to succeed.
Even after the extreme fluctuations of China’s stock market, education remained a priority for many Chinese, according to BrandZ™ research. But as more consumers pursue education online rather than in physical classrooms, the category is undergoing structural challenge.
Education providers reduced the size of physical classrooms, slowed their growth and accelerated online activity. The move to smaller class sizes can lower profit margins, while the increase in online services requires investment. Two brands, New Oriental and Xueersi, again appear in the BrandZ™ Top 100
Facing ongoing consumer apprehension about food safety, category leaders continued to improve technology, found more reliable sources for milk, entered partnerships with international food producers, and introduced product innovations.
After increasing 14 percent a year ago, the category increased 3 percent in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. One brand dropped out leaving six, in this rank order: Yili, Mengniu, Shuanghui, Bright Dairy, Sanquan, and Fortune.
The announcement of the end of the one child policy drove share price appreciation, especially for market leading brands, based on a future with larger families and increased demand. Lower dairy consumption in China, relative to the West, drove growth expectations, especially for premium products.
Consumers preference increased for premium products, such as fresh milk, milk fortified with extra nutrients, cheeses, and flavored yoghurts. New premium beverages, particularly ready-to-drink teas with packaging and marketing aimed at young people, also were popular. Meanwhile, UHT milk, ultra heated to extend shelf life, remained a large, if slow-growing segment.
Yili worked to increase awareness among young audiences with sponsorships of reality TV shows. Mengniu introduced packaging changes and celebrity endorsements. The brand expanded distribution in cities where competition is weaker, and featured new products, including those with local market appeal. And it worked to improve food safety with its partners, France’s Danone and Arla Foods of Denmark.
Bright Dairy prepared to purchase a raw milk supplier as part of the effort to ensure food safety by controlling the entire supply chain. In another move to enhance its food technology, and add premium products, Bright Dairy prepared to purchase Tnuva, Israel’s largest food producer, from corporate parent, Bright Foods.
In an innovation taking convenience food another step, Sanquan introduced complete frozen meals, dispensed from a vending machine equipped with a microwave oven. The expansion of the catering category, with middle class consumers eating out more, helped drive sales of the cooking oil brand Fortune. Meat producer Shuanghui felt the effects of weaker consumption because of the economic slowdown.
Catering
SALES IMPROVE AS BRANDS APPEAL TO A WIDER AUDIENCE
Education
EDUCATION REMAINS A HIGHPRIORITY, BUT SHIFTS ONLINE
Food and Dairy
BRANDS EXPAND PREMIUMOFFERINGS, MEDIA PRESENCE
Most Valuable Chinese Brands, but the category increased only 3 percent after a 57 percent rise a year ago.
New Oriental specializes foreign language training and test preparation. Enrollment is near three million students. While operating around 725 physical
locations in 50 cities, New Oriental also invested in
expanding online options and coordinating them with offline options. Almost 11 million users are registered
for the brand’s 4,400 online courses. New Oriental brand
value declined 2 percent.
Xueersi primarily offers tutoring programs for students in kindergarten through grade 12, and maintains 300 physical locations in 19 major cities, although much of the enrollment, especially for overseas test preparation, is concentrated in Beijing and Shanghai. Total enrollment is about 1.5 million students. Brand value increased 33 percent.
CATEGORIES IN BRIEF
3%
3%29%
E V E N A S C H I N A R A P I D LY MOD E R N I Z E S ,
I T R E M A I N S D I S T I N C T LY C H I N E S E .
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The furniture category improved 29 percent with the resurgence of home buying that accelerated late in the year, following a series of interest rates cuts and a reduction of the down payment for home purchasing.
Furniture brands did not depend entirely on government actions, however. Many brands attempted to stimulate sales by creating more occasions for people to visit physical stores or shop online, sometimes for an individual item but also for a larger purchase to refresh or remodel an entire room. Some brands rotated seasonal or holiday themes during the year.
Like last year, Suofeiya was the only furniture brand in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016, at number 75. Known for the design and manufacture of kitchen cabinets, Suofeiya drove sales growth by expanding its offering to include products for most rooms of the house. It also raised funds for investing in digital smart home projects.
The industry remained fragmented. Competition increased, even in smaller cities, as furniture retailers expanded to meet the needs of consumers increasingly able to afford and furnish better housing. Brands marketed with brochures, online videos, and billboards.
Pharmaceutical reforms and rising consumer interest in personal health drove domestic sales of healthcare brands, while increasing global interest in traditional Chinese medicine (TCM) fueled exports.
TCM brands exported to over 150 countries and regions during the first half of 2015, according to the China Chamber of Commerce for Import and Export of Medicines and Health Products. The Chinese government funded a plan to open TCM centers abroad as part of the country’s international trade initiative called Belt and Road.
To penetrate the domestic market, brands continued to introduce mass products that promised the benefits of TCM medications, and they increased their presence on e-commerce and mobile platforms.
The category increased 5 percent in value in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016,
The value of the home appliances category improved 31 percent in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016, following a 20 percent gain a year ago. Government initiatives to raise personal income and expand urbanization continued to stimulate demand.
Among other factors driving category growth were: the strengthening housing market, appliance replacement and upgrade, innovative product improvements related to the smart home and mobile use, the ease of e-commerce, and the expansion of overseas sales. The BrandZ™ China Top 100 appliance brands, in ranking order, are: Midea, Haier, Gree, Robam, Supor, Hisense, and TCL.
These seven brands helped advance the government’s Internet+ effort to prepare for the next phase of industrialization, with technology that links the Internet of Things, mobile, cloud computing and big data. Brand initiatives also linked with the Made in China 2025 plan to reinvent Chinese industry as more quality driven, technologically innovative and environmentally responsible, with selected industries raised to global stature.
Some of the home appliances brands in the BrandZ™ China Top 100 derived a relatively high percentage of revenue from overseas business. In a dramatic initiative to build overseas presence, particularly in the US, Haier bid to
purchase the appliance division of General Electric. Haier makes and markets refrigerators, washing machines and other home appliances worldwide.
Midea, a maker of large appliances, including air conditioners, refrigerators, and washing machines, established corporate centers for innovation and smart home development, and focused on adapting the brand to an industry being reshaped by the mobile Internet. Known for its central and room air conditioners, as well as water heaters and air and water purifiers, Gree focused on unifying the offering with smart home mobile control systems.
Cooking appliance manufacturer, Robam, advanced its smart home program with the introduction of a line of connected ranges. Supor, a maker of cookware and small appliances, developed its online sales.
Hisense increased its global presence in TVs, particularly large screen models. The brand, which exports to 130 countries, developed innovations in display technology for its TVs, other smart home applications, and medical imaging. TCL, another global LCD TV leader, introduced advancements to its thin, curved, high definition smart TV screens, and more than tripled its sales in North America as it expanded distribution through retail chains.
Furniture
FURNITURE PICKS UP AS LOWER INTEREST RATES PUSH HOME SALES
Healthcare
REFORMS AND CONSUMER HEALTH CONCERNS DRIVE CATEGORY INTEREST
Home Appliances
WITH FOCUS ON SMART APPLIANCES,BRANDS GROW AT HOME AND ABROADfollowing a 1 percent increase a
year ago. One brand dropped from the Top 100, leaving these three, in rank order: Yunnan Baiyao, Tong Ren Tang, and CR Sanjiu.
Yunnan Baiyao continued to advance its “New Baiyao, Great Health” strategy, adding healing TCM properties to its over-the-
counter personal care range, including toothpaste,
shampoo, skin creams, and feminine hygiene products.
Tong Ren Tang expanded its online presence with around
100 health and cosmetic products available on sites such
as JD.com, Tmall and Yihaodian. To pursue overseas interest in TCM, Tong Ren Tang operated 56 stores in 15 countries and regions, primarily in Asia but also including North America and Europe.
Part of the State Owned Enterprise (SOE) China Resources, CR Sanjiu remained active in research and development that crossed a range of healthcare, pharmaceuticals, and TCM products.
CATEGORIES IN BRIEF
5%
29%
31%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The hotel category grew 11 percent in value in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. The result improved on the flat year-on-year change in the last edition of the BrandZ™ China 100.
Both local Chinese brands and international brands, well established in the larger cities, competed for tourism business. But for first nine months of 2015, inbound tourism from overseas markets declined 1.1 percent to almost 19 million visitors, according to the China National Tourism Administration (CNTA).
In addition, Chinese consumers did not lack accommodation choice. Over 11,000 star-rated hotels operated in China at the end of the third quarter of 2015, according to the CNTA. And for those looking for savings beyond budget-priced hotels, peer-to-peer services like Airbnb offered another option.
Two of the three hotel brands in the BrandZ™ China Top 100, Hanting and Home Inn, are well represented in the budget segment, although both
The insurance category rose 44 percent in brand value, one of the strongest performances in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. The growth follows a 10 percent decline a year ago.
Because of their steep year-on-year value appreciation, four of the six insurance brands in the BrandZ™ China Top 100 also ranked among the Top 20 Risers. China Taiping rose 70 percent; China Life, 53 percent; Ping An, 41 percent; and New China Life, 42 percent.
The value growth of Ping An and China Life moved these brands into the BrandZ™ China Top 10. While not in the Top 20 Risers, the other two insurance brands, PICC and CPIC, also experienced strong brand value growth, 25 percent and 36 percent, respectively.
The greatest factor driving the value rise is the needs of China’s expanding middle class. Individuals acquiring greater wealth want to protect it. And they begin to seek other products, such as health insurance or pension coverage. Government regulations reassure consumers that their insurance investments are safe.
brands have expanded rapidly and broadened their portfolios of sub-brands to serve broad segments of the market. Both Hanting and Home Inn increased 3 percent in brand value.
At the end of 2015, Home Inn, which operates around 2,790 hotels in 346 Chinese cities, under several sub-brands, announced plans to merge with BTG Hotels, which owns or manages several hotel brands and other tourism facilities.
Part of a group that operates over 3,000 hotels worldwide, Jinjiang Inn, the third hotel brand in the BrandZ™ China Top 100, benefits from both inbound and outbound tourism. The number of Chinese traveling abroad increased 12.1 percent during the first half of 2015, according to the China Tourism Research Institute. Jinjiang Inn increased 47 percent in brand value.
Some of the brands, Ping An, in particular, have evolved into diversified full service financial companies that also offer investment options, which may come with less risk than equities in the volatile stock market.
In addition, the insurance companies have improved the marketing of their products and the education of their agents. And they have developed Internet businesses. The brands also are establishing overseas presence and strengthening their investment portfolios as the Chinese government relaxes overseas investment rules.
But not all investments are in financial products. Ping An purchased Tower Place, a high profile building in the center of London’s financial district. The move follows its purchase of the Lloyd’s of London building in 2013. China Life purchased a building in London’s Canary Wharf in 2014. And China Taiping invested in a New York luxury residential skyscraper.
Hotels
BUDGET BRANDS PRESSURED,WHILE CATEGORY VALUE GROWS
Insurance
NEEDS OF MIDDLE CLASS GUIDE CATEGORY GROWTH
44%11%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
With an increase of 61 percent, following a 2 percent decline last year, Jewelry retail tied with personal care as the category with the largest value appreciation in the BrandZ™ top 100 Most Valuable Chinese Brands 2016.
The four brands that contributed to this result, in order of their ranking are: Lao Feng Xiang, Eastern Gold Jade, Ming Jewelry, and CHJ Jewellery, appearing in the BrandZ™ China Top 100 for the first time this year.
After a meager 4 percent rise in value a year ago, the oil and gas category declined 15 percent in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016, as weakened demand and low crude oil prices hurt profits.
Both oil and gas companies included in the BrandZ™ China Top 100, Sinopec and PetroChina, are high-value, strategic State Owned Enterprises (SOEs), and both dropped several spaces in ranking, placing them below the Top 10.
Like many of the international energy leaders, the Chinese brands cut capital expenses and considered selling assets to help boost profitability. PetroChina announced plans to divest some of its natural gas pipelines. At the same time, low crude prices improved profits of some refined products, like petrochemicals.
Sinopec continued its efforts to diversify into non-petroleum businesses and to leverage its brand retail points of sale, the more than 30,000 service stations it operates throughout China. In cooperation with Tencent, the giant Internet portal, Sinopec introduced a mobile app for purchasing its products and services using Tencent’s WeChat messaging service. It also offered insurance from China Taiping in many of its retail outlets.
The personal care category rose 61 percent in value in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016, following a modest rise in 2015. Driven in part by the addition of another brand, Herborist, which joins Dabao and Zhong Hua in the ranking, the sharp rise in category value also reflects several consumer trends.
Despite slower economic growth and stock market fluctuations, Chinese consumers have not modified their spending on necessities, according to BrandZ™ research. And the shopping attitudes and behavior of Chinese consumers are changing, affecting what they buy and how much they spend.
Kantar Worldpanel found that consumers are putting fewer fast moving consumer goods into their baskets on each shopping trip, but spending more per item. Kantar Wordpanel also discovered that personal care is one of the categories in which Chinese consumers will pay a premium for items related to improved health or quality of life, such as skin care or toothpaste.
Herborist is a skin care brand whose products are made from natural ingredients. Influenced by traditional
Several factors explain this acceleration in value during a year of economic deceleration. The first is the optimistic attitude of consumers who continued spending both on daily needs and big-ticket items, according to BrandZ™ research conducted late in 2015. In addition, certain jewelry, gold and jade, in particular, has strong cultural meaning, and jewelry also is a secure investment, relative to the volatility of the stock market.
Jewelry Retail
VALUE INCREASES SHARPLY DESPITE SLOWER ECONOMY
Oil and Gas
SLOWER ECONOMY, DECLINE IN CRUDE PRICES, HURT PROFITS
Personal Care
VALUE PROPOSITIONS DRAW CONSUMERSWILLING TO PAY PREMIUM FOR QUALITY
At the same time, jewelry retailers faced increased competition from e-commerce sites and sought opportunities to innovate and expand organically or through acquisition. With the purchase of Shenzhen Zhuoyi Jewelry, Ming Jewelry plans to develop a brand that appeals to young people. CHJ Jewellery acquired several brands over the last few years.
Lao Feng Xiang enjoyed its first full year with a flagship store on New York City’s Fifth Avenue. It also opened two stores in Hong Kong, including its largest unit outside of the China mainland, where the brand operates around 2,800 stores. Lao Feng Xiang is investigating store openings in Canada, the UK, and New Zealand.
61%61%
15%
Chinese medicine, the brand updates Chinese ancient knowledge of herbal treatments with modern technology and marketing. Herborist illustrates the possibility of building a uniquely Chinese global brand. Sold online, Herborist is also available in physical stores in many European countries, primarily through the German retailer Douglas, and Sephora, the French-owned cosmetics chain.
Dabao, the well-established and widely distributed skincare brand, has been reenergized with new packaging that emphasizes the brand’s moisturizing and hydration qualities. The US healthcare company Johnson & Johnson purchased Dabao in 2008. Similarly, Chinese consumers have used Zhong Hua toothpaste for over half a century. To reconnect with customers and connect with younger consumers, the brand built an integrated media campaign around persuading people to smile.
The campaign featured a leading Chinese actress in a video challenging people to smile, despite all the stress in their lives. It included out-of-home ads on 1,600 newspaper kiosks, as well as a social media component linked with social responsibility. Zhong Hua is part of the Unilever oral care brand portfolio.
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
With a steep 50 percent rise in brand value, following flat results a year ago, real estate became the third fastest-rising category in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016.
A critical part of China’s economy, real estate comprises around 15 percent of GDP, according to the International Monetary Fund, up from only around 4 percent in 1997. The 10 real estate BrandZ™ China Top 100 brands, in ranking order, are: Vanke, Wanda, Evergrande Real Estate, Poly Real Estate, Country Garden, Gemdale, Longfor, R&F Properties, SOHO China, and Greentown China.
The real estate sector experienced rising vacancy rates as China’s economic growth rate slowed and government subsidies disappeared. Higher land costs and lower sales prices squeezed margins. Total investment for the first 10 months of 2015 increased only 2 percent, according China’s National Bureau of Statistics. Demand began to strengthen late in the year, following government intervention to lower interest rates and reduce the down payment required for home purchasing, in some instances.
Two brands, in particular, drove the strong real estate category performance: Evergrande Real Estate, which increased 49 percent in brand value, making it one of the BrandZ™ China Top 20 Risers; and Wanda, which appeared for the first time in the BrandZ™ China Top 100, at number 31.
Evergrande Real Estate announced the acquisition of four up-market projects that the company said
Real Estate
INCENTIVES, LOWER INTEREST RATES, STIMULATE REAL ESTATE REBOUND
CATEGORIES IN BRIEF
comprise the largest-ever real estate acquisition in China. Wanda develops multi-use commercial complexes that include office space, luxury hotels, and shopping centers. It belongs to Dalian Wanda Commercial Properties Company Ltd, a leader in sales, leasing and management of shopping centres, hotels and office space.
Innovation and expansion continued, despite the slowdown. In Guangzhou and Tianjin, R&F Properties opened new concept malls that balance shopping with entertainment and other leisure activities. Longfor, which develops residential and commercial property in top tier cities, entered the Nanjing market for the first time.
In an attempt to appeal to young, first-time buyers, Vanke introduced V-Home, a housing development featuring communal activities. Poly Real Estate launched a project for seniors with on-premises medical facilities. These initiatives reflect a change in approach that Greentown China calls, “selling lifestyles” rather than “selling houses.” The shift to Internet marketing was an aspect of the trend. Country Garden joined with insurance brand Ping An to fund a Shanghai project with crowd-sourcing.
Real estate developers also took their brands abroad. With a local partner, Gemdale invested in a mix-use complex of offices, retail, and residential space in Los Angeles. Many Chinese real estate developers, such as Greenland Holdings, China Vanke and SOHO China have property holdings in New York City.
50%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The retail category declined 2 percent in value in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. The decline indicates the category’s competitiveness, the pressure of e-commerce on physical stores, and challenges facing Alibaba.
Because of these challenges, including concerns about counterfeit merchandise on its sites, Alibaba fell 20 percent in brand value. The other retail brands included in the BrandZ™ China Top 100 rose sharply in brand value: Suning, 68 percent; Yonghui Superstores, 45 percent; and Alibaba competitor, JD.com, entered the ranking for the first time.
The retail category also contended with changing shopper attitudes and behavior. Consumers continued to spend, but more wisely. The annual growth rate of retail sales declined over the past several years, from 13.7 percent in 2013 to 10.3 percent through the first 10 months of 2015, according to Kantar Retail.
Consumers sought not only price, but also quality, and were willing to pay a premium, if justified, according to Kantar Worldpanel. In the big cities especially, spending shifted from necessities to products and services related to transportation, communication, culture, education, and entertainment.
Other factors, including government initiatives, also impacted development of the retail category. Internet growth, a government priority, and the availability of affordable smartphones, facilitated the rapid expansion of e-commerce throughout China, even to rural areas. The major e-commerce brands expanded rural distribution significantly during the past several years. Alibaba, for example, is present in 27 provinces with 170 county service centers and 8,000 village service centers.
Because of the government establishment of cross border e-commerce zones for reduced tariffs on foreign merchandise, Chinese consumers enjoyed lower online prices and faster delivery for imported goods. The first cross border e-commerce zone was established in March 2015, in Hangzhou. The government plans to set up zones in Shanghai, Guangzhou and 10 other cities. The zones are intended to drive consumption, a government goal.
Brands also worked collaboratively to improve online and offline integration. E-commerce giant Alibaba purchased almost a 20 percent stake in Suning, the consumer electronics retailer that operates about 1,600 stores. The synergistic hook-up strengthens Alibaba’s presence in the physical world, and boosts its electronics
offering, while lifting Suning’s online profile, and improving
logistics and delivery times for both brands.
Retail
CONSUMERS KEEP SPENDING,BUT PURCHASE MORE WISELY
Tencent, the giant Internet portal, and China’s most valuable brand, is a stakeholder in JD.com, the e-commerce site known for its consumer electronics strength. This social e-commerce arrangement enables consumers to seamlessly purchase products from JD.com while texting on WeChat, Tencent’s ubiquitous messaging site.
Meanwhile, the product categories available with e-commerce are expanding to include even big-ticket purchases, like cars. During China’s Singles Day shopping event, on November 11, 2015, consumers bought over 6,500 cars on Alibaba’s Tmall.com, and then picked up their purchases at local car dealerships.
At least one consideration keeps Chinese consumers shopping in physical stores however, a concern for food freshness. Yonghui Superstores is known for its strength in fresh food. Freshness becomes a competitive advantage because it drives traffic to the Yonghui’s large format physical stores at a time when consumers increasingly are shopping online or at smaller convenience locations.
2%
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
What a difference a year makes. In September 2014, Alibaba raised $25 billion in a record IPO on the New York Stock Exchange. It entered the BrandZ™ Top 100 Most Valuable Chinese Brands at number two, after Tencent. This year, Alibaba’s brand value declined 20 percent and the brand fell to number three in the BrandZ™ China 100. The brand faced both internal and external challenges, including increased competition, particularly from JD.com, and concern over counterfeit products on its sites.
It is important to consider these challenges in the context of Alibaba’s overall business. On November 11, or Singles Day, a Chinese reversal of Valentine’s Day that celebrates singles rather than couples, a holiday Alibaba promoted into a national shopping binge, the brand sold $14.3 billion in merchandise in 24 hours. The online sales included 5,000 overseas brands from 25 countries. Alibaba’s success
selling overseas merchandise in China is part of a larger intention to build a global brand and reach more shoppers outside of China as the domestic economy slows.
For now, however, China is Alibaba’s key market. And like most strong merchants, Alibaba faces some strong competitors, most notably JD.com, China’s number two e-commerce retailer, with 23.9 percent market share compared with 64.4 percent for Alibaba’s Tmall, according to Kantar Retail. JD.com originated in 1998, a year earlier than Alibaba, as an online store called Jingdong Mall, and after an interim name change to 360buy.com, it became JD.com in 2013. It enjoys several advantages when compared with Alibaba, which trails JD.com in delivery efficiency because, unlike JD.com, Alibaba does not own much of its delivery system to the last mile.JD.com’s key advantage, however, is its partnership with Tencent, the
Retail Analysis
ALIBABA FACES JD.COM COMPETITION,PLUS TMALL AND TAOBAO CHALLENGES
Alibaba faces internal challenges with Tmall and Taobao…
Source: BrandZ™
Source: BrandZ™ / Millward Brown
Both Tmall and Taobao score well in Brand Power today. Brand Power is a BrandZ™ measurement of a brand’s competitiveness. But the trend is unmistakable. Tmall’s Brand Power is expected to increase as Taobao’s Brand Power declines.
giant Internet portal. Consumers can access JD.com through WeChat, Tencent’s ubiquitous social networking site. This access point simplifies life for the consumer who can text, shop, and pay without switching online platforms. Alibaba lacks equivalent strength in social media and its core competence remains the retail transaction.
Alibaba offers merchandise on two sites, Tmall and Taobao Marketplace. Tmall is a business-to-consumer site that features around 70,000 brands, including well-known global leaders. Taobao, an online bazaar, offers over 800 million items from small business and consumer sellers. Shoppers are losing confidence in Taobao because of the danger of buying counterfeit products. Taobao is weakening in Brand Power, the BrandZ™ measurement of a brand’s competitiveness. Tmall is strengthening in Brand Power, but more slowly than JD.com.
2015-2016 comparison of Power and PotentialAverage Brand Power and Brand Potential Score = 100
… Taobao lags in key Brand Power components and in Trust…
… But Tmall’s potential is less than that of key competitor, JD.com…
… Meanwhile, Tmall is growing in all components of Brand Power, and in Trust…
… And JD.com is growing significantly in all components of Brand Power, and in Trust
Although Taobao is able to enhance Brand Power by being Salient, a component of Brand Power, it is not viewed as meeting consumer needs in ways that are Meaningful and Different, the other two components. And consumers are losing Trust, probably because of the counterfeit products issue.
Although Tmall’s Brand Power potential is strong, it is not as strong as the potential of its key competitor, JD.com.
Consumers seem to have higher confidence in Tmall compared with Taobao. Tmall is strengthening in all three components of Brand Power: Meaningful, Different, and Salient. And it is strengthening in Trust.
As JD.com expands its mobile offering and partnerships with premium international brands, it is increasing in the three components of Brand Power, and in Trust.
Average Brand Power and Brand Potential Score = 100
Average Brand Power Component Score = 100Average Trust Score = 100
Average Brand Power Component Score = 100Average Trust Score = 100
100
50
60
70
80
90
100
110
120
130
140
150
TMALL2014
TMALL2015
TAOBAO 2014
TAOBAO 2015
200 250 300
FUT
UR
E G
RO
WT
H P
OT
EN
TIA
L
CURRENT BRAND POWER
10050
60
70
80
90
100
110
120
130
140
150
150
TMALL2014
JD.COM2014
JD.COM2015
TMALL2015
TAOBAO 2014
TAOBAO 2015
200 250 300
FUT
UR
E G
RO
WT
H P
OT
EN
TIA
L
CURRENT BRAND POWER
243 2014
166 2014
132 2014
259 2015
279 2015
274 2015
2011
107
2012
111
2013
94
2014
89
2015
88
CORPORATE TRUST INDEX
2011 2012 2013 2014
104
2015
118 CORPORATE TRUST INDEX
2011 2012 2013 2014
112
2015
134 CORPORATE TRUST INDEX
Brand Power ScoresBrand Power Scores
Brand Power Scores
Components of Brand PowerComponents of Brand Power
Components of Brand Power
MeaningfulMeaningful
Meaningful
DifferentDifferent
Different
SalientSalient
Salient
2014 20152014 2015
2014 2015
133133
114
113157
176
147147
132
129177
161
114114
93
199165
147
-20+24
+62
-18+30
+29
+85+51
+54
Average Brand Power Component Score = 100Average Trust Score = 100
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The soft drinks category reappears in the BrandZ™ Top 100 Most Valuable Chinese Brands. The one brand represented is the local Chinese brand Mizone, a flavored energy water from the French company Danone.
Mizone grew in brand value at a time of slower sales growth across most fast moving consumer goods (FMCG) categories, with the rate of overall FMCG spending growth declining from almost 12 percent in 2012, to 5.4 percent in 2014, according to Kantar Worldpanel.
The appearance of Mizone in the BrandZ™ China Top 100 relates to several other overlapping Chinese consumer trends, including the rising interest in personal health, and the willingness to pay more for a perceived quality difference. Along with beer, skin cream, and yoghurt, bottled water is one of the items for which Chinese consumers are willing to pay a premium.
The average selling price of bottled water increased 6.4 percent between 2012 and 2014, according to Kantar Worldpanel. That rate of increase places bottle water toward the upper end of products, across 26 categories, that experienced selling price changes, ranging from negative 1.8 percent to 13.5 percent.
Mizone also benefits from the corporate reputation of Danone as a leader in food production safety. Trust remains relatively weak in China, particularly in the food and dairy category. But Trust also is especially important as a brand differentiator in China, according to BrandZ™ research.
Soft Drinks
WATER BRAND VALUE SURGES ON HEALTH, PREMIUM TRENDS
CATEGORIES IN BRIEF
32%
NEW
The technology category increased 32 percent in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. In ranking order, the 10 technology brands in the BrandZ™ China Top 100 are: Tencent, Baidu, Huawei, Lenovo, Letv, NetEase, 360, ZTE, Youku Tudou, and Sina.
These brands comprise 10 percent of the brands in the BrandZ™ China Top 100, and 27 percent of the ranking’s total value, making technology the largest value contributor, ahead of the 19 percent that banks represent. With this year’s entrance of smartphone maker Huawei, at rank seven, three of the BrandZ™ China Top 10 brands are in technology.
The rapid growth and high value of China’s technology brands is significant for several reasons: (1) it mirrors the rise of market-driven brands; (2) it identifies innovation as a characteristic of rising Chinese brands; and (3) it signals the transition of China’s economy from production-driven to consumption-driven.
In addition, despite the enormous size of the potential consumer market in a country of over 1.3 billion inhabitants, successful technology brands are looking beyond China for opportunities. Typically, Chinese brands expand first to neighboring countries or emerging markets, but many of the technology brands are challenging western competitors.
In the dominance of technology as a brand value contributor, the BrandZ™ China Top 100 resembles the BrandZ™ Global Top 100, where technology, primarily US brands, comprise about 30 percent of value. In contrast, the financial category makes up less than half of the BrandZ™ India ranking, and technology’s contribution is negligible.
The Chinese government’s unique ability to define and implement national priorities helps drive technology. As in most industrialized countries, China’s technology brands are developing new products and services that integrate the Internet, the cloud, mobile, big data and the Internet of Things. In China, the government advances these commercial goals with a national economic growth plan, launched in 2015, and named Internet+.
SMARTPHONES AND OVERSEAS EXPANSION
Among the factors that drove the rise of Huawei into the BrandZ™ China Top 100 are overseas sales, particularly in Western Europe. Huawei, originally a maker of telecommunications equipment, built a smartphone business by offering quality products at more affordable prices than Apple or Samsung. The brand shipped over 100 million smartphones in 2015, a 44 percent year-on-year improvement. In an effort to close the gap with Apple, Huawei reportedly plans to introduce its first PC during 2016.
Other Chinese technology brands also are developing smart phone businesses and enjoying sales outside China, including giant PC maker Lenovo. The 2014 purchase of Motorola Mobility, from Google, accelerated Lenovo’s
Technology
BRANDS SPEED OVERSEAS GROWTH, ESPECIALLY SMARTPHONE MAKERS
efforts to become a global smartphone competitor. The acquisition fits with the plan to grow revenue outside of the core PC business by restructuring the business into three areas: PCs, smartphones, and enterprise.
In a joint venture, 360, a supplier of mobile security products, also launched a new line of mobile phones, with special security features. Initially targeted for the Indian and Indonesian markets, 360 planned to expand to Brazil, Russia and Turkey. Letv is active in the smartphone business, too. The brand, originally a streaming video site, is developing an ecosystem to connect TV, smartphones, video and, ultimately, energy-saving cars.
Meanwhile, ZTE, a maker of network equipment and affordable smartphones, introduced a mid-priced smartphone aimed specifically at consumers in North America. NetEase, a gaming leader, announced plans to market certain games in North America. The brand also invested in an e-commerce platform designed to speed delivery of products purchased online by Chinese consumers from overseas vendors.
MAINTAINING LEADERSHIP
China’s most valuable brand, Tencent, continued to leverage its key strength – ubiquity. It increased the number of monthly users of WeChat, its messaging and caller app, to over 600 million. And the brand leveraged WeChat’s functionality to promote its payment system, which can be used for purchasing at physical locations and online.
Tencent partnered with JD.com, China’s second largest e-commerce site, to offer marketing and branding services. The initiative, called Brand-Commerce, combines Tencent’s social networking data and JD.com’s online shopping data to reach targeted buyers in the most appropriate online channel, with ease of purchase.
At the same time, Tencent monetized its high penetration, doubling online and video advertising revenue. The brand also
investigated ways to increase its gaming revenue by introducing
its games abroad. Tencent rose 24 percent in brand value, after almost doubling in value a year ago.
Baidu, China’s largest search engine, continued to enjoy
strong advertising revenue from search, although it is rapidly shifting to mobile, which is less profitable. The brand worked on building O2O revenue by connecting some of its online search functions, such as mapping, with offline purchasing opportunities.
Sina, the Internet portal, gained revenue through its many vertical channels, such as entertainment and sports, and it grew revenue on Weibo, its micro-blogging site. And the brand worked to adjust to the rapid shift to mobile.
Youku Tudou, the popular video site, similar to YouTube, entered the BrandZ™ China Top 100 for the first time, following its acquisition by Alibaba, as part of the e-commerce leader’s attempt to expand into digital media.
CATEGORIES IN BRIEF
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04 > The China Top 100 - Category Update TOP 100 Most Valuable Chinese Brands 2016
The telecom providers category declined 1 percent in value in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. China Mobile, the category leader, grew 2 percent in value. The other two providers, China Telecom and China Unicom, declined 9 percent and 14 percent respectively.
Factors contributing to the weak brand value performance of these State Owned Enterprises (SOEs) include the impact of slowed economic growth, stock market fluctuation, and the ongoing shift to market-driven rather than state-owned brands, as Internet brand leaders attract customers to services that bypass the telecom networks.
The telecom providers also experienced pressure on profits as they invested in rolling out 4G and reduced pricing, in response to government desire to increase data transmission speed and lower fees. Market leader China Mobile planned to accelerate roll out of 4G,
With a value increase of 39 percent, travel agencies tied with airlines as the fifth fastest growing category in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016. Both categories benefited from domestic and international tourism.
Two travel agencies ranked in the in the BrandZ™ China Top 100. CITS, a State Owned Enterprise (SOE), established in 1954, grew 32 percent, and the Internet brand, Ctrip, increased 40 percent. The vitality of the Chinese travel industry drew competition. Alibaba launched a travel business called Alitrip, formerly Taobao Travel.
Despite the economic slowdown, China continued to lead the world in outbound travel. Chinese outbound travel grew 12 percent in 2015, according to the World Tourism Organization, an agency of the United Nations. The China National Tourism Administration expects the growth rate to slow slightly to around 10 percent, or 130 million outbound trips, in 2016, because of devaluation of the yuan and other factors.
Travel is a spending priority for Chinese consumers. In BrandZ™ research conducted following the steep decline in the Chinese stock market, about half of the respondents planned to complete travel plans, regardless of the stock market’s poor performance; 38 percent indicated they might postpone their plans; and only 13 percent said they would cancel them.
Travel agencies took steps to benefit from this travel proclivity. Ctrip purchased a stake in India’s online travel site, MakeMyTrip, for example. Meanwhile, Ctrip contended with other online competitors and with several reputational challenges. Ctrip’s stock price fell in May 2015, after hackers penetrated its site. Early in 2016, Ctrip blamed vendor partners for fraudulent ticket incidents that quickly went viral on social media.
doubling the number of 4G users it had at the end of 2015, to reach 500 million users in 2016.
In a collaborative effort to compete more effectively against China Mobile, China Unicom and China Telecom announced plans to collaborate on building 4G infrastructure and providing overseas roaming services. In addition, they advocated for smartphone devices that supported six different technologies, making it easier for people to switch carriers.
China is moving towards the integration of Internet, TV, and telecommunication. Unlike in the West, where competing brand ecosystems drive the process, in China the integration is government planned. The telecom providers also supported the government’s Internet+ effort to connect mobile Internet, big data, cloud computing and the Internet of Things.
Telecom Providers
STATE-OWNED COMPANIES COMPETE TO ROLL OUT 4G
Travel Agencies
CONSUMER TOURISM APPETITEBOOSTS CATEGORY EXPANSION
39%
1%
T H E S P E E D O F C H A NG E P RODUC E S R E S U LT S ,
B U T A L S O T E N S I ON S A N D CON F U S I ON .
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04 > The China Top 100 - CEO Q&As TOP 100 Most Valuable Chinese Brands 2016
Marketers will need the ability to build an ecosystem. The importance of the Internet continues to grow as it connects all industries and empowers them to grow further. This is what we call Internet+. Successful development of the Internet+ strategy requires effort from the entire society, and not just Tencent alone. We look forward to cooperating with partners in other industries to provide users with better services. We will continue to focus on user needs to provide the best user experience and explore new possibilities with informed understanding of user’s needs. For example, in our exploration to connect the Internet with public services, we have already brought to life many interesting cases with good word of mouth. We evolve and keep up with the times. In the mobile Internet age, every user’s feedback will be instant and influential, which brand owners need to be constantly in tune with and responsive to. Therefore, apart from brand building and listening to users, the ability to quickly respond and adapt to changes with flexibility will be essential. These are the skills that marketers must absolutely be equipped with.
First, we need a strong brand to guide us in our efforts to explore new possibilities and consider the emerging issues and consequences. Second, Tencent is a platform from which an ecosystem with partners has formed and is evolving constantly. A strong brand facilitates consensus, makes an ecosystem diversified and dynamic, and leads us to a common direction. Third, we hope that in the future Tencent will be perceived not only as a company with many well-known products, but also as a widely respected enterprise in the world. We hope our brand can motivate our employees and attract more talent to join us in this journey to realize our vision together. Our brand growth has been aligned with the maturing and development or our organization and business.
Tencent is the most valuable brand in China and a global leading Internet giant.
Through its products and services, users can have text, voice and video chats
(WeChat and QQ), immerse themselves in an exciting virtual world of games,
comics, literature and movies, search news and information, and buy products and
services online. Established in 1998, Tencent grew in brand value at a 40 percent
compounded annual growth rate to $82.1 billion, since entering the BrandZ™
China ranking six years ago. It is the world’s fifth most valuable technology brand,
after Apple, Google, Microsoft and IBM, and ranks number 11 in the most recent
ranking of the BrandZ™ Top 100 Most Valuable Global Brands.
Q&A with Edward ChengCorporate Vice PresidentTencent
We aim to enrich people’s lives by weaving Internet technology across everyday life to stimulate work, play and spiritual needs. Tencent focuses on two key areas. First, we focus on acting as a connector. We connect people with people, with services, and with devices based on instant messaging and social platforms like Weixin/WeChat and QQ. Second, we focus on digital entertainment and content. Tencent owns a range of interactive entertainment platforms, including games, music, videos, online literature and comics.
How would you summarize the Tencent brand’s many aspects?
Our role is connecting people with people. By offering a tool of instant communication we have enhanced connections between people by making connections more diverse, closer, and warmer. With the rise of mobile, every key part of the economy and society will need to be connected with the Internet. With this connection, it has become possible for us to make commercial functions and social services an integral part of people’s lives by providing a truly human-centric user experience and bringing benefits to more people. Tencent is committed to a future that is mobile Internet-centric. We are building a mobile one-stop online lifestyle services platform to make life more convenient for our users.
What do you think Tencent’s central role is in people’s lives?
Young people are more assertive and interaction-oriented. In the past, a brand’s DNA was expected to remain constant, but in the Internet age, even the brand DNA needs to evolve. This is a challenge for any brand, but Tencent is well positioned to respond. We have always put the user first. We prioritize everything based on the value to the customers, and we have been able to rapidly respond to changes in user preferences. Users are our best product managers and help us stay ahead of the curve and innovate constantly. Our pan-entertainment strategy is an example of our commitment to change to meet user’s needs in digital entertainment. There are five major trends in the age of pan-entertainment: 1 Forms of entertainment will be no longer independent from each other but will be interconnected and integrated across the board; 2 The boundary between content creator and content consumer will be increasingly blurred as everyone can be a creator; 3 The thriving of the follower economy fueled by the mobile Internet will substantially increase the creation of celebrity-generated intellectual properties; 4 With the wide availability of interesting interactive experiences, entertainment thinking will likely reshape people’s lifestyles; 5 With the combination of science, technology, talent and ubiquitous connectivity, Internet+ will bring about a great age of abundant creativity.
With the rise of a new generation, what opportunities and challenges does Tencent face?
What skills will marketers need in the future?
How is strong branding important to Tencent? And what factors have made Tencent a strong brand?
“IN THE PAST, A BRAND’S DNA WAS EXPECTED TO
REMAIN CONSTANT, BUT IN THE INTERNET AGE, EVEN THE BRAND DNA
NEEDS TO EVOLVE. ”
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04 > The China Top 100 - CEO Q&As TOP 100 Most Valuable Chinese Brands 2016
This interview was adapted from The Thoughts of Chairmen Now, a book of insights from Chinese business leaders, by Jonathan Geldart and David Roth. Published by Grant Thornton and WPP. For more details, please go to www.thethoughtsofchairmennow.com
Wang Zhenghua started with one plane in 1994. Ten years later, the government
granted him a license to operate an airline. Today, Spring Airlines is a leading
Chinese low-cost carrier devoted to making air travel affordable and available
for more people throughout China. Spring operates mostly domestic flights, but
the airline also flies to some Asian cities and has announced plans for flights to
Moscow, Melbourne, Tokyo and other international destinations. Spring Airlines
appeared in the BrandZ™ China Top 100 for the first time, at rank 98, with a
Brand Value of $252 million. Called Spring Airlines in English, the name in Chinese
characters is Spring and Autumn Airlines.
Q&A with Wang ZhenghuaChairmanSpring Airlines
The most important aspect is safety. We invest heavily in our pilots and other professionals who guarantee the safety of the airline. Second is low cost. After that we try to create something special. Our target customer is young. In fact, about 80 percent of our ticket sales happen online. And we’ve created programs and marketing communications aimed at young people.
What is the essence of the Spring Airlines brand?
First, we try to reach young people in ways that appeal to them. We promote the brand and sell tickets online and we sponsor events, like concerts, to build brand exposure. We have over two million followers on Weibo (the Chinese social media equivalent to Facebook and Twitter). And we try to understand our young customers and project a youthful attitude. We enable passengers to share personal information when they book a flight. This way, passengers willing to provide personal information can find a good match when they select their seats.
How do you reach young people, your target customers, and keep them loyal?
I look forward to continuing our strong growth. Since our founding in 2004, we have achieved our 10-year plan and we continue to grow at a steady rate, usually 20-to-30 percent annual increases in sales. That’s because we have a very clear market positioning. There are two ways to achieve this goal: either organically or through acquisition. Some people today are tempted to take steps in directions they’re not good at because they think they can make money, at least short term. This way is not our way. We will continue to focus on what we do well. We will expand within our core business, adding new products and services that we think match our strengths.
How do you see the future for Spring Airlines?
When I started in the tourism business in the 1980s, I looked to Europe and the United States for the roadmap of that industry. Today’s airline industry in Europe and the United States is our future. The popularity of low cost airlines in Europe and the United States signals the trend of the next 10 years in China. To adapt this model for China I will consider Chinese culture, the needs of our customers and the government regulations.
How are you adapting your knowledge of western airlines to China?
I still believe that if you work hard you create value. Don’t waste your time or your talent. Everything can be possible but it depends on the individual to make the effort. This is the advice that I give to my staff and they are doing well. I had a dream when I began this business and it remains a strong motivator for me. China has many low-income people who have never flown on an airplane. Perhaps it is their dream to fly someday, but they don’t have the money. It’s my dream to help them fly. I will achieve this dream as I have achieved other dreams—with hard work.
Looking back over the past 30 years, what are you most proud of?
We encourage people to work hard, that’s number one. Second, we want people to have foresight, to plan ahead. Third, we believe in being frugal. We don’t like extravagance. And we want people who are devoted to what they do, who make a contribution to the enterprise. I try to influence people in our company to follow these values.
What values drive the business?
“SOME PEOPLE TODAY ARE TEMPTED TO TAKE STEPS IN DIRECTIONS THEY’RE NOT
GOOD AT BECAUSE THEY THINK THEY CAN MAKE MONEY, AT
LEAST SHORT TERM. THIS WAY IS NOT OUR WAY”
OUR INSIGHTS
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Chinese consumers are changing from seeking low price and convenience in favor of quality and premium offerings. Market driven companies in the digital world, such as “BAT”, are not only managing to grow despite the decline in the economic growth rate but are also catering to these changing consumers’ perceptions. They’re achieving this through a variety of methods, by investing or merging, and by conducting an “Enclosure Movement” within digital categories and even crossover industries. Within digital categories, “huddling for comfort” is the new normal. Virtual economy big shots are continuously making investments, mergers or acquisitions in hot territories, from O2O and entertainment to e-commerce. They are also maintaining growth and strategic placement by leveraging each other’s advantages. Examples in 2015 include the merger of leading “share economy” brands Didi and Kuaidi; Alibaba’s acquisition of Youku Tudou and the
“Tencent and JD.com Plan” to gain more mutual benefits following their strategic cooperation in 2014.
In the long-term, virtual economy leaders must seek to extend their play into traditional sectors, particularly in service industries such as entertainment and sports. A good illustration of this is seen in Alibaba’s investment in the Guangzhou Evergrande Taobao Football Club in 2014, a move that sought to enhance consumer association and inspiration through the brilliant performance of this football club. To succeed, brands must not only build meaningful relevance by meeting consumers’ changing needs but also stay salient by “circling” their service around consumers’ daily lives. They must also figure out the key differentiators and crossovers between online and traditional industries, to build consumer trust and enhance their corporate reputation.
GROWTH
CHANGE, OR BE CHANGED THE GROWING CROSSOVER BETWEEN ONLINE AND TRADITIONAL INDUSTRIES
TOP 100 Most Valuable Chinese Brands 2016
MARK DUAccount Director Millward [email protected]
According to Kantar Worldpanel, the rise in FMCG consumption across Asian markets is slowing. However, in China, 70 percent of local FMCG players are
growing their sales, compared with 50 percent of the global brands operating in the market. Local brands account for around 70 percent of the value of the FMCG market, and are driving 82 percent of its growth. In terms of penetration, 44 percent of
Chinese brands increased their shopper base in the last year, compared to 33 percent of global brands operating in China. There are five ‘power levers’ of growth that all the dominant Chinese players featured in the report were found to have in common. They are:
• They are masters of metamorphosis: Shifting from manufacturing-led
to brand-led, evolving along with consumers and expanding beyond their country of origin
• They have a purpose, and play an active role in society: Respecting and caring for consumers, helping to improve lives and democratizing categories
• World-class innovation with a local twist: Recognizing that consumers want to move with the times, but without sacrificing traditions
• They digitize and humanize: Applying digital technologies both to create and sell products and to connect with consumers on an emotional level
• Data-led intuition: An instinctive understanding of what will work, combined with ongoing market research that provides unbiased, actionable consumer insights.
JASON YUGeneral Manager
Kantar Worldpanel [email protected]
BRAND LEVERS
GROWTH SLOWS BUT CHINESE BRANDS
GAIN AT HOME
China is e-commerce’s greatest success story to date. In the five years to the end of 2015, the amount spent online has more than quadrupled to nearly half a trillion dollars, driving it past the US (US$300 billion) as the world’s largest e-commerce market. The e-commerce environment that has emerged in China
is significantly different to the model in Western markets and more than just a sales channel; it’s a potent ecosystem for brand building, CRM, innovation, test marketing, and more – the foundation for entire go-to-market strategies. E-commerce platforms are already the largest digital advertising channel in China, with spend on them forecast to grow 30 percent in 2015 according to forecasts from GroupM.
The rise of local brands such as Junlebao demonstrates just how disruptive this distinct online shopping ecosystem can be. The crucial
difference is that by following a digital-only brand building strategy and creating their own branded flagship store on Tmall, the world’s largest B2C E-commerce marketplace, Junlebao is able to cut its marketing costs significantly and pass the savings on to consumers. And in the value-conscious and immensely discoverable online shopping environment, selling a quality product at a lower price enables you to amplify brand awareness quickly through recommendations and positive user reviews – both of which have been key elements in Junlebao’s marketing strategy. This approach has significantly contributed to Junlebao becoming a top three instant milk formula brand on Alibaba’s Tmall site within less than a year of its launch.
E-commerce’s hugely disruptive influence on the brand environment in China is far from a passing phase, and as marketing budgets come under greater pressure, it seems that e-commerce platforms will emerge as an ever-more important brand building opportunity.
CHRIS BONSIChief Client and Insights Officer
TNS Asia [email protected]
E-COMMERCE
E-COMMERCE WITH CHINESE
CHARACTERISTICS – A POWERFUL BRAND
BUILDING PLATFORM
China has a lot of data. Based on IDC (International Data Corporation), the nation has 13 percent of all the data in the world. Forecasts indicate that data from China will double every two years for the next five years, reaching a staggering 8.6 zettabytes by 2020.
The value of this sheer volume of data is insight. Insight that enables brands to create always-on valuable experiences, inspires creativity, and amplifies content relevantly. We have seen a trend amongst brands in China embarking on data strategies (what data attributes to collect, from which platforms) and making data part of their core competencies. Some brands have started building their own Data Management Platforms (DMP) to generate a 360–degree-view of the customer, with the long-term vision of generating insights for brand and product innovation.
Brands seeking to leverage data partners to generate insight and create brand experience should look for those who can help to answer questions focused on Audience, Moment, and Channel (sales and communication), such as:
Audience: Who could potentially be my customers?
Moment: When is the right time (when needs arise) to reach and engage with consumers?
Channels: How and where to engage them for key actions?
The smartest brands will leverage their own data and insight learning and map it against external data sources for targeted acquisition and optimized consumer engagement.
YI LIChief Data OfficerOgilvyOne Worldwide, [email protected]
DATA
KNOWING WHO, WHEN AND HOW
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We have heard constantly how the past two decades has been a time of incredible growth.
For the vast majority of international B2B brands, it has been twenty years of tremendous brand value. Chinese customers often ignored their actual needs and made their purchasing decisions based on the blind worship of perceived international brand prestige and advantage.
At this time, the power of these international brands was practically guaranteed. However, these so called “best” products were not always the most suitable for the local consumer. And international brand solutions were often modeled in foreign environments. They needed adjustments when landing in China. However, to do good business didn’t require much effort.
But after two or three decades of growth, the B2B needs of a majority of China’s enterprises and organizations have matured, and the international model is no longer proving the most effective. In many areas, Chinese customers are global sophisticates, and an “international experience” is
no longer enough – the “international brand” halo is dissipating.
In addition, most B2B brands in China are faced with another challenge. After thirty years of development, reform and opening up, many of today’s successful local companies have ushered in a transition period, and some are even beginning to move toward the international market. But there are too many businesses and markets that are beyond the conventional “successful growth” markers traditionally used as criteria, so many aspects of business expansion have not kept up with the growth in sales and maturity of the market. Brand building is one of these markers.
Of course, brand communication today is intrinsically tied to the “social” era, a stage in business development that is full of uncertainty. However, this can lead to opportunity. If we always follow the safe path, how can Chinese companies leap over Western counterparts in a very short period of time? Only by finding opportunities in this chaos can Chinese brands achieve in a few years what Western brands have been doing for decades.
PHAT SONGManaging PartnerOgilvy PR Beijing
NEW ERA
GAME OF THRONES THE CHAOS OF B2B BRANDS IN
THE CHINESE MARKET
TOP 100 Most Valuable Chinese Brands 2016
OUR INSIGHTSToday, China’s marketers are facing an ever-evolving world of communication. The prosperous social media and technology adaptations have created an elusive Chinese consumer with fast-changing thinking.
How can marketers be responsive to these changes? One crucial step is to understand how brands interact with consumers throughout their shopping journeys. In the digital era, it’s a must to get access to consumers’ digital footprints and conduct a deep dive of the data to generate valuable consumer insights.
By turning these insights into actions, marketers will reap the following benefits:
Faster adaption: Understanding what works and what doesn’t will enable marketers to see how to adjust their marketing activities to achieve
better ROI. Simply put, leveraging digital insights will empower brand marketers. Create meaningful content that will engage consumers: Design the content by media type to best engage target consumers in their media journey. Today’s consumers are not passive recipients; they also actively transmit what they consider to be interesting and valuable via their social identities. Brand marketers should know what will engage the consumer and use this knowledge to earn more views and hits through the consumer’s peer-to-peer communications.
The successful brand marketers in China are those that can ride the data wave, leverage the ensuing insights and use them effectively via always-on, real-time marketing.
ANNIE HSAIOChina [email protected]
RESPONSIVENESS
BUILDING BRANDS IS ALL ABOUT THE DATA DEEP DIVE
Today, the most effective way for a brand to quickly tap into the Chinese market is to focus on the post-80s generation first, and then expand to other segments of the population.
The biggest difference between the Chinese market now and ten years’ ago lies in the change of the leading consumption group. In the past, the views of middle-aged consumers would determine the success and failure of a product and brand, simply because they symbolized experience, wealth and authority. Nowadays in China, young people have taken center stage and become the main force in setting social trends.
The post-80s generation is between 25 and 35 years old and account for 41 percent of management positions in enterprises and institutions. Their annual household expenditure of 34,000 yuan is the highest amongst all generation groups. They are the technological innovators, product consumption and upgrade advocators, adopter and word-of mouth propagators. Their preferences and experiences cast a direct influence on their children, parents, colleagues and friends. The post-80s generation holds the key for brands to compete successfully in the present day Chinese market.
LI YANGeneral ManagerCTR Media & Consumption Behavior [email protected]
INFLUENCE
DEPLOYING THE POWER OF A GENERATION
Social Media Marketing is flooding across China, with all marketers claiming to be focusing on the discipline and aggressively seeking social media experts to join their team.
But, just ask yourself, of all the many so-called social campaigns you encounter every day, how many of them do you remember? The answer is likely to be that almost none of them are stored “in mind”. This may be because China Style Social Media Marketing often makes the mistake of being “fake” social marketing.
Many marketers come up with content, for example, a social topic, a video, a poster, a quiz, an HTML5 page
– then leverage Key Online Leaders (KOL) to amplify it and pray for consumers to read, like and share. But this is not true social marketing; rather it’s just the creation of “self-absorbed” content.
A true social media campaign shouldn’t start only in social media but in a daily life experience felt by real consumers, enhanced by cultural insights and brand positioning. Following hot topics and blindly blending in brand elements will only put consumers off. Marketers should of course have a clear social media strategy but make sure it is led by the brand and consumer understanding, not the medium itself.
JOSEPH TSANGHead of Digital, Greater China
Grey Group, Greater [email protected]
SOCIAL MEDIA
CHINA STYLE SOCIAL MEDIA MARKETING
L I F E H A P P E N S ON MOB I L E I N C H I N A , W H E R E T E X T I NG , TA L K I NG ,
A N D S HO P P I NG ON L I N E S E E M S A S AU TONOM I C A S B R E AT H I NG .
05BRAND
BUILDING PERSPECTIVES
MARKET SEGMENTATION
Sports Marketing
Youth Marketing
Senior Marketing
CHANGING MEDIA LANDSCAPE
Managing Change and Complexity
E-commerce and M-commerce
Social Media
Agency Response
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SPORTS MARKETING
SPORTS TAKE CENTER STAGE IN CHINESE MARKETPLACETHE TIME IS RIGHT FOR BRANDS TO SEIZE SPORTS MARKETING OPPORTUNITIES
The past year alone has witnessed tremendous investment in sport, as the Chinese government has fully committed to success in international sports, particularly football. Chinese enterprises have followed suit with significant spending to acquire sports rights and establish global partnerships, including Tencent’s reported $700 million digital partnership with the NBA, and Dalian Wanda’s $650 million purchase of the Ironman triathlon series and $1.2 billion acquisition of global sports agency Infront.
Perhaps the most important deal to date is China Media Capital’s five-year, $1.3 billion agreement for exclusive global rights to broadcast the top-tier professional football Chinese Super League. The agreement values the rights at 20 times what the current broadcast partners are paying and will filter through multiple levels of the sport, providing better coaching and training, developing better quality players and improving infrastructure.
Investments and partnerships like the above are creating real value in
Chinese sports marketing platforms for current and potential brand partners.
GETTING IN ON THE GAME
At the same time, we are seeing tremendous interest in sports sponsorship as a platform to support international expansion by Chinese brands such as Huawei, Haier and ZTE, all of which have signed significant partnerships with rightsholders outside of China in the past two years. Their initial steps could lead to taking a page out of the playbook used by others to grow globally, most notably Japanese and Korean brands such as Sony, Canon, Samsung and Hyundai, who relied on the Olympics, FIFA World Cup, UEFA and other sponsorships to demonstrate strength, establish legitimacy and put them front and center on the world stage.
Collectively, all of these signs indicate we are at the inflection point for sports marketing in China and by Chinese enterprises. And it comes at a critical time in the industry’s development.
Data, and the ability to access and analyze it, is having a profound, across-the-board impact on sports marketing, allowing for personalized fan engagement on a scale not seen before.
Fans have always been at the heart of the sports marketing proposition. However, it is no longer exposure, impressions generated or image transfer that drives and determines value. Rather – thanks to data-based insights into actual online and real-world behavior and the personalization that results – brands are able to engage, involve and connect with fans and drive actionable results.
Chinese marketers and those targeting the China market have the chance to be part of this reinvention of sports marketing and sponsorship.
Success is, of course, not automatic. It requires a strategic approach, integration into the marketing mix and a commitment of human and capital resources. But for those who play the game well, there are plenty of points to be scored.
In the lead-up to the 2008 Beijing Games, there was much conversation about the event being the ultimate use of sport in building Brand China. However,
developments in the years since point to today as the true moment when sport – and sports marketing – is poised to play a pivotal role for the country, its domestic enterprises, and international brands seeking to strengthen their position in market.
John KristickGlobal CEOESP Properties [email protected]
Jin Wei TohRegional Head, APAC, ESP Properties [email protected]
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SPORTS MARKETING
DIRECTIVES FOR BUILDING BRANDS THROUGH SPORTS PARTNERSHIPS
Sports sponsorships should start from the outside in. They should be the organic answer to the question: What does the business need? Once it is determined that a potential partnership will help accomplish a priority objective – such as raising awareness, changing perception, creating differentiation, strengthening loyalty, or driving B2B and B2C sales – the key evaluation criteria must be alignment of brand values in concert with audience fit.
Fans increasingly follow and engage with their favorite sports teams, leagues and athletes through digital media. Sponsors can support and enable these connections by creating, curating and sharing great content. Such content must be authentic and relevant to both the brand and the rightsholder, and should offer fans the ability to interact and share.
Acquiring a set of benefits such as signage, hospitality rights and mentions in media is only the first step in a partnership. To positively impact the target audience, sponsorships must be brought to life and made relevant through promotions, on-site activities, social media, etc.
Fan data, and sports partners’ ability to access and analyze it, provides sponsors with the ability to personalize offers and messaging, and ensure the relevancy of activation programs and communications. Potential partners should be data-driven organizations with quality fan intelligence that is connected and accessible. They also should be willing and able to analyze and share data insights to maximize the value of the investment.
The critical question for sponsors to ask themselves is: Would we be missed if we left? Simply showing up will not result in recognition, interest or loyalty from fans. That type of credit and gratitude must be earned by bringing something valuable to their experience.
Sports sponsorships should not be evaluated using media-centric constructs such as reach, frequency and efficiency. Such metrics fail to reveal whether a partnership is building market share, changing consumer perceptions, strengthening brand value, etc. As with other elements of the marketing mix, sponsorship measurement should rely on advanced analytics tools to gauge overall performance.
Select strategically
Prioritize digital content
Plan for activation
Use data to inform
Enhance the experience
Measure effectively
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YOUTH MARKETING
HOW TO GET YOUR BRAND TO THE HEART OF CHINA’S POST 95 GENERATIONFORTUNE FAVORS THE BRAVE
Values are changing. The studies we conducted demonstrate the new values the post-95 generation now relates to:
• Living for the moment and exploring the world. Instead of achievement, the word “explore” is a much better reflection of their values. This generation favors the adventurer over the CEO.
• Be bold in your attempts. Be silly or be self-deprecating; any attempt at being seen as independent thinkers and true to themselves is highly valued in this generation. They think their choices are not influenced by others’ opinion, so therefore they like to set themselves apart from the crowd.
• Enjoy the simple things in life. Over 80 percent of this generation shared this view. This means they consider it less important to have the traditional social status symbols of success such as a nice car or house.
BE BOLD IN THEIR LANGUAGE
What they want, more than any other generation, is to enjoy the simple things in life, to love real, sincere people, and to walk through life with a sense of light-heartedness. Here light-hearted doesn’t mean superficial, it is their style, their attitude.
Classmate Xiaoming, “Xiaoming Tongxue” is one of the brands launched by Unipresident Enterprise to the RTD tea market. This market is already oversaturated in China, with almost stagnant category growth. The “Xiaoming Tongxue” brand name itself is a person’s name, a name that appeared hundreds of times in the English textbooks of the post-95 generation. This is a brand that comes with a really strong personality; from name to packaging to communication, it precisely captures the heart of the post-95 generation.
BE BOLD ON THEIR PLATFORM
Like many FMCG brands, Harbin beer wants to be younger. Instead of hiring young pop stars and airing million-dollar TVC or pre-roll, they explored a different route to reach their potential customers in the post-95 generation.
Bilibili is an online video site famous among young people for its bullet screen. This screen allows viewers to publish comments on the video content in real time. Harbin beer launched a series of highly entertaining, self-deprecating viral videos on Bilibili. It was ranked among the top viewed videos in the “Entertainment and life” category. Having brand communications on the site is in itself a bold statement, but this unprecedented approach of making fun of the brand itself to entertain the audience delivered the message right to the heart of post-95 generation.
Brands that wish to grow need to know how to adapt to every generation, because each one differs. Studies of China’s post-95 generation
reveal several best practices that can inform the marketing of brands determined to make an impact in China. Key amongst these is to be bold.
Lucy YuBusiness Development DirectorMillward [email protected]
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YOUTH MARKETING
KEY HIGHLIGHTS OF CHINA’S POST-95 GENERATION MEDIA HABITS
FIVE ACTIONS FOR BRAND BUILDING AMONG THE POST-95 GENERATION IN CHINA:
According to AdReaction, a global study conducted by Millward Brown, the post-95 generation spends around 3.5 hours using the Internet on their mobiles every day, compared to an average of 2.5 hours among young people below the age of 34. Similarly, the time spent watching video on mobile/tablet by the post-95 generation is 30 minutes longer than average.
One third of the post-95 generation does not watch TV, and even among those who do watch, over 70 percent watch less than an hour per day. They spend double the time on mobile that they do on their laptop or TV. Mobile is undoubtedly the leading device.
The post-95 generation is growing up with the prevalence of smartphones; their mobile usage is not only much heavier, but also more influential. More post-95s indicated that they’d rather search for their favorite shows/content, than watch something their friends shared online – further proof of their desire to be seen as independent thinkers, not easily swayed by others’ opinion.
UNDERSTAND WHAT THEY SEE DIFFERENTLY: Don’t use your values to create your brand differentiation for them
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BE REAL AND SINCERE: Don’t pretend that you understand them and don’t be afraid to be completely honest about it
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BE BOLD: Don’t be afraid to adopt an unconventional route to reach them, talk to them and touch them
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BE BOLD IN THEIR LANGUAGE: Find out what they connect to, what they like, and use that in your message
04
BE BOLD ON THEIR PLATFORM: Don’t just copy your media plans en masse to target post-95s. The power of a platform has gone beyond that of just a communication channel.
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SENIOR MARKETING
TURNING SILVER INTO GOLD
Theresa LooChief Knowledge OfficerOgilvy & Mather [email protected]
Zod FangDirectorGroupM Knowledge [email protected]
Lily XiongAssociate Research DirectorOgilvy & Mather [email protected]
Liu YuVice [email protected]
A DIGITAL-LITERATE, AGING POPULATION REPRESENT A WEALTH OF OPPORTUNITY
48 percent of the 55 to 64 years old respondents in Shanhaijin, a GroupM survey on the consumption and media habits of Chinese consumers, expressed an intention to spend more in the next three years. And perhaps contrary to expectations, these people are adventurous in their shopping habits too; 33 percent admitted to having a tendency to spend without thinking, while 37 percent said that when a new product was released, they were amongst the first to try it.
Many of them are also more digital-literate than most marketers would expect. For silver hair consumers, Internet penetration is at 24 percent. Their access to the Internet via mobile phones has risen from 4 percent in 2013 to 22 percent in 2015, reaching a high of 44 percent in Tier 1 cities. 34 percent of silver hair consumers automatically think of using the Internet when they need to search for information. 30 percent update their Weibo or circle of friends frequently.
Compared with other aging nations, China has less time to put in place all the strategies and plans needed to respond to the challenges posed by its aging society. The 1:2:4 (one adult to two parents to four grandparents) ratio and the fact that many children work and live away from their parents, mean there are not enough people and resources to care for China’s aging population. Hence, there is plenty of scope for marketers to move in to fill the gaps that governments and society cannot fill. Now is the time for marketers to turn silver into gold, and here are some ways to do so:
Data quoted in this paper is based on Shanhaijin survey of 2013, 2014 and 2015. Shanhaijin is GroupM’s proprietary consumer market research, independently developed to identify and understand market trends, covering an extensive scope of Tier 1 to Tier 4 cities. The largest and most extensive project of its kind in China, Shanhaijin deep-dives into the interaction between consumers and their external environment, providing an in-depth understanding of modern China for marketers and brand owners.
LEVERAGE INTERNET PLUS
Digital connectivity and O2O solutions can play a big role in addressing the needs of silver hair consumers. Given that the younger segment of this group have a basic level of digital-literacy, marketers can come up with innovative solutions that take advantage of Internet Plus. For example, development by online retailers can improve the quality of life of silver hair consumers, as the former brings greater value for money by offering better prices and delivery services.
Internet+ solutions that connect the elderly with families, relatives, communities and healthcare services offer lots of potential. They can use big data collected via wearable devices to track the daily activities and health of silver hair consumers, enabling doctors to make diagnosis remotely and helping children tend to the wellbeing of their parents from afar. O2O services can also be deployed to align community and neighborhood resources to care for silver hair consumers, so that the latter will not feel lonely or isolated. Robots that perform the functions of maids, home healthcare aides and companions will help silver hair consumers to live independently in their own homes and communities for longer as they age.
PROVIDE PRODUCT AFTERSALES SERVICES AND EDUCATION
While all the above-mentioned Internet Plus solutions are useful, silver hair consumers might have difficulties mastering them. Marketers need to invest in educating these consumers on how to use new products and provide comprehensive aftersales services so as to ensure product usage.
COMMUNICATE RELEVANCE
On the one hand, silver hair consumers do not want to be patronized because of their old age. On the other, they want their special needs to be addressed. Communication that brings out a perceptible product advantage best suited to their needs and budget will resonate with them. Using an appropriate spokesperson, especially age-wise, is a way of avoiding the “but this is not for me” syndrome. Themes used in communication should also be things they can relate to, such as family, wisdom and care.
RESEARCH TO FILL KNOWLEDGE GAPS
Most of the marketing professionals who target products and services to silver hair consumers have never been old themselves. They do not really understand what growing old means. There is lots of diversity in the personal circumstances, attitudes and behaviors of the silver hair consumers. A wealthy, healthy and successful 68-year-old businesswoman has very different needs and motivations from a poor, unemployed female with failing health of the same age. It is important to not rely on superficial insights or resort to stereotypes when tackling silver hair consumers. Currently, most research is on 15 – 64 years old. Research extending to 65 years old and above is much needed for marketers to understand silver hair consumers.
China is aging at an unprecedented pace. By the end of 2014, the number of those over the age of 60 had reached 212 million, representing 15 percent of the total population. Of this number, about one-third were in the relatively younger age bracket of 60 to 65 years old. This “silver hair” consumer segment is important
not just because of its immense size, but because a significant proportion of the younger members of this cohort are willing to spend – and spend more.
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MANAGING CHANGE AND COMPLEXITY
NAVIGATING THE EVOLVING ADVERTISING LANDSCAPE OF CHINACONTENT VARIATION HELPS OVERCOME MARKET COMPLEXITY
The Internet industry has doubled its spending, while more than 150 Application (APP) based brands are now advertising their products.
Yes, content is still King! However, in this super connected age, attention is at a premium – an average Chinese consumer flirts with multiple screens and spends 56 percent of their leisure time on a smartphone. This is more than double the time spent on TV in a normal day2. A creative that is well branded and engaging is critical to grabbing their attention in a small time window of 3 seconds3.
The infectious excitement of this frenetic digital growth rubs-off on marketers, with many eager to be first in the market with their communication. But an absence of optimal content or targeting could be a recipe for failure.
The recent performance4 of the most expensive ad (5m USD for a 60 second spot) is testimony to this. Despite the use of ten celebrities and repetition of its advertising message 20 times, the “Youxin” second hand car ad could not entice consumers.
Where did it go wrong? The absence of a compelling benefit and irritation with the style of engagement meant it simply did not resonate. To
avoid such disappointment, here are some essential truths to bear in mind when seeking to create advertising content that is effective and efficient:
THERE IS NO MAGIC BULLET
China is complex. Analysis of our Ad database reveals that only one in two ads perform successfully across the country (a difficulty level similar to Europe). The variations in ad performance are driven by cultural variations, stage of category development, stature (how big or well know the brand is) and ad literacy. For example, the Eastern consumers demand advertising that is stylish, more creative, with an aspirational mood and tone. Emotional warmth – family bond, nationalism and optimism resonate strongly with Northerners. Meanwhile, pragmatic culture rules in the South, so it is no surprise that a simple and straightforward storyline is more suitable for consumers in this region. In the lower tiers, providing information (vs. entertainment) and a strong “reason to believe” is critical.
Time schedules and budgets do not often allow creation of multiple ads. Our learnings suggest that universal truths around family values, optimism or children travel
well. Giving these themes a different perspective or dramatizing benefits through creative formats that are new to the category are some of the ways to make ads travel across the country.
THE RIGHT MEDIA GIVES YOUR CREATIVE WINGS
Chinese audiences seek different payoffs and have different behaviors across TV vs. online video. TV and mobile is more about overcoming boredom and offering stimulation, less about gratification. Online viewing is goal oriented, where consumers are actively seeking information and hence have less patience to watch ads that do not capture their imagination (most even press mute while watching them). This means we need to engage with our audience differently. From our studies, we see there is low transference of TV copy when tested in online pre-roll environment. Analysis of TV ads successfully re-purposed for online gives us some helpful insights, for example, make the brand stand out by ensuring branding is present in most of the frames and through close up shots of the brand. Single minded messaging is paramount in this 3-second time window. For mobile ads, making it humorous greatly increases its acceptance.
Mainland China continues to be the largest contributor to global advertising growth1. However, recent years have seen some dramatic changes in the advertising landscape. The rebalancing of the Chinese economy entailing softer GDP growth, regulated and rationed TV advertising, aggressive attempts by local Chinese brands to stretch their budget – have all contributed to an unprecedented growth of the digital ecosystem.
Maneesh Choudhary Head of Client Service and SolutionsMillward Brown Beijing [email protected]
Jenny MaGroup Account Director Millward Brown Beijing [email protected]
1 GroupM 2015 global advertising forecast. 2 Millward Brown 2015 Ad Reaction Study. 3 Average duration a typical consumer will look at an online display ad based on Millward Brown Eye Tracking learning. 4 Results from Millward Brown ad testing study
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MANAGING CHANGE AND COMPLEXITY
EXPLOIT THE FORMAT TO MAKE YOUR BUDGETS WORK HARDER
Increasingly marketers are experimenting with different ad lengths to convey their brand proposition across categories. The ubiquitous 30 second creative is on the decline. Success depends on using the format in sync with the advertising and brand objective. A 30-sec creative is well suited for a new product or a new campaign and supports transmission of complex or multiple messages while a 15-sec works well in tandem as a cut down to communicate basic ideas and act as a reminder. The longest video ads can of course deliver multiple and complex messages. They have been found to work as a reward for the fans and provide an opportunity for enjoyable engagement.
MARKETING TO LAZY BRAINS
Our brain, despite being extremely powerful and capable of complex processing, avoids “thinking” wherever possible. It does this by finding mental shortcuts to achieve decisions and actions. These shortcuts form a dual system of “thinking”. System 1 denotes fast thinking and also that which is heavily intuitive or emotional. System 2 – reflective or slow thinking – is more cumbersome and effortful and hence avoided. Just as we aren’t motivated to think hard in many brand decisions, we are rarely motivated to expend time and energy deliberately reflecting on the advertising we see. Effective ads need to access our System 1 by being instantly meaningful. Measuring these non-reflective take-outs requires methods that go beyond direct questioning. Cutting edge neuroscience techniques are being used along with survey based responses, with great success. Facial expression analysis (Millward Brown’s Facial Coding technique) is one of the tools that allow marketers to gauge spontaneous emotional response to their ads and provide guidance in optimizing it. Moreover, brands in sensitive categories (such as sexual well-being, female products) are using this tool exceptionally well to reveal intuitive reaction where it is difficult for consumers to describe intimate or personal scenes.
ESSENTIAL INSIGHTS TO MAKE YOUR ADVERTISING BUDGET WORK HARDER
ACHIEVING PAN-CHINA ADVERTISING SUCCESS THROUGH ONE CREATIVE IS HIGHLY UNLIKELY: Overcome this hurdle by delivering a universal truth with a twist, bring “new” news to the category or dramatize benefits to appeal to your audience.
01
THE RIGHT CREATIVE FOR THE RIGHT MEDIA WILL GIVE YOU MAXIMUM RETURNS: Aim to incorporate easy fixes to your TVC to make it suitable for online airing.
02
AD LENGTH PLAYS A CRITICAL ROLE IN ACHIEVING OBJECTIVES: Use a combination of formats to make the best use of your budgets.
03
DELIVER “INSTANT MEANING” TO YOUR AUDIENCE: Use neuroscience techniques to develop powerful creative that excite, engage and resonate with your audience without making them work to understand it.
04
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E-COMMERCE AND M-COMMERCE
SUCCESSFUL BRANDS EMBRACE THE POWER OF THE PLATFORM IF A BRAND’S NOT MOBILE, IT’S GOING NOWHERE
Two factors are driving the fast growing e- and m-commerce arenas. Firstly, the younger generation’s lifestyle in China is more digital and mobile than anywhere else in the world, even more so than in the US. Due to comparably weak Internet connection in non-Tier 1 and 2 cities, mobile usage is heavy – the mobile device is the gateway to the digital media world. Secondly, low retail penetration in Tier 2-4 cities has prompted increased demand for e- and m-commerce. It’s the main reason for the incredible success and scale of Chinese’s e-commerce platforms – both of which are supported by the Chinese government. The Internet+ program embeds offline services into online Apps like WeChat and e-commerce platforms are the perfect infrastructure to give a broader population the perception that they too are part of
the growing wealth of the nation.
When Alibaba’s Singles’ Day sales hit 91.2 billion yuan this year it set a new record – not least because over 68 percent of transactions were made on wireless devices
such as smartphones and tablets. More proof (were it needed) of how fast consumers’ purchasing behavior is shifting from offline to online and mobile. Smartphone penetration in China is around 70 percent, accounting for close to 700 million
devices. In July 2015, m-commerce revenues bypassed web-based e-commerce revenues for the first time – and it’s unlikely m-commerce will ever fall behind.
Nils Roehrig Chief Digital OfficerGroupM China [email protected]
BRANDS ARE GETTING ON BOARD
For brands, e- and m-commerce platforms with inherent performance marketing capabilities are mandatory. Almost all platforms have a related data-driven offering within their ecosystem. The still growing online purchasing trends, real-time and data driven capabilities, and dynamic optimization possibilities make these platforms crucial to a brand’s communication plan.
Currently for performance driven clients, SEM and SEO are the most common media type (as elsewhere) but we are also seeing the emergence of programmatic buy display ads. Alibaba goes even further, enabling video pre-roll buying across its strategic video site partners.
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E-COMMERCE AND M-COMMERCE
HOW CAN BRANDS DO MORE TO AMPLIFY THEIR INFLUENCE ON THESE PLATFORMS?
It’s not a new concept, but it works online as well as well as it does offline. The data is there, but the key is to manage these assets. As the oil of the new age, data can tell you more about your consumers. We can identify the closely related products that consumers purchase together, then adjust our media strategy or promotion plan accordingly. For example, by continuous tracking and analysis, we discover that those who bought toothpaste in the past week have a higher chance of also buying towels. Thus, a toothpaste brand can present themselves on the page of towels, or package its products with towels for promotion.
01 MARKET BASKET ANALYSIS
A holistic media planning and optimization approach is almost mandatory. Users are not only active on one e- or m-commerce platform, they are surfing the online world. Being able to identify a user across different screens and platforms will create a more accurate consumer portrait, helping you meet your target audience in the right channel using the right content at the right time, then leading them to your e- or m-commerce page. Although the biggest challenge lies in the isolated data among different platforms, we believe this will be resolved in the near future.
02 E- AND M-COMMERCE ARE NOT SEPARATE
Driving sales is absolutely the key motivation for brands to get involved in e-commerce platforms, but generating brand buzz is another benefit that can be considered as PR value for brands. Your products’ search volume on e- and m-commerce platforms is also an indicator of your brand’s awareness level. A lot of people browse these pages even if they do not actually buy anything, so make sure e- and m-commerce platforms count in your brand building communication plans.
03 E- AND M-COMMERCE ARE NOT JUST ABOUT SALES EFFECTIVENESS
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SOCIAL MEDIA
LEVERAGING WORD OF MOUTH THROUGH WECHATCONTENT ANALYSIS REVEALS HOW TO WIN FRIENDS AND INFLUENCE PEOPLE ON WECHAT
In the advent of today’s online social communities, much of this discussion is happening through WeChat.
Yet WeChat is restrictive in terms of what key metrics data it enables marketers to get their hands on. The latter can only track competitive activities through publicly available information, but not data within a “friends circle”. Marketers are working in isolation and attempts at monitoring are often inward looking. With few dimensions and benchmarks to evaluate this social media platform, there are information gaps in how to create relevant content and engage with consumers effectively.
Deploying content analysis at an industry level can be informative and useful. Kantar Media CIC and Ogilvy carried out systematic research to look at how WeChat is used across nine industries. Following are some of our research findings and tips on how WeChat can be deployed more effectively:
INCREASE SHARE OF CONSUMER ENGAGEMENT BY ACTIVATING MULTIPLE WECHAT FUNCTIONS
WeChat is not just a free messaging platform. It has evolved to provide a holistic consumer experience and can be deployed to fulfill a wide range of marketing and communication objectives. Yet, our audit finds that marketers have different functional bias in terms of how they use their WeChat accounts. The top three functions marketers use WeChat for are to (1) promote products, (2) provide customer service and (3) create awareness, followed by a long tail of other functions.
Of the nine industries, FMCG demonstrates the widest use of WeChat, extending the use to six different functions, such as branding and industry
Chinese consumers’ trust in brand advertising is low. They would rather hear from friends and personalities whom they can trust than listen
to brand communication. Hence, influencers and content that lead to positive Word Of Mouth (WOM) carry real weight in brand selection.
news sharing. Beauty and automobiles are the runners-up, utilizing five and four WeChat functions respectively. The strengths of WeChat in conducting customer engagement and CRM are, surprisingly, under-utilized. Marketers should increase share of customer engagement by expanding the number of marketing and communication functions used on WeChat.
USE KOLS WITH AGILITY
Chinese consumers are more actively following Key Opinion Leaders (KOLs) and celebrities compared with following brands on social media. A cross-industry review of beauty, fashion and infant nutrition shows that KOL accounts achieve better reach performance than brand accounts in these industries. Brands should use KOLs to help enrich content by leveraging their personalities to bring in entertaining content.
Brands should also not limit the use of KOLs to those within the same industry. Chances are, the competition is using the same KOLs and the latter are over-exposed. FMCGs are good at using cross-industry KOLs from the fashion or art industry to bring a fresh look to their communications. Using KOLs from other non-related categories can bring in new perspectives and also help brands extend their target audience pool to different groups.
In the infant nutrition industry, there are only 12 significant KOLs, who are mainly nutritionists and pediatricians by background. 12 is way too small a number for such a huge industry. There is much room for brands to groom their own KOLs. A follow-up ranking exercise and a content analysis of the KOL accounts can then guide marketers to choose up-and-coming KOLs that are relevant for their brands.
Sam FlemmingFounder & CEO Kantar Media [email protected]
Monica ZhaoHead of Research InnovationKantar Media [email protected]
Theresa LooChief Knowledge OfficerOgilvy & Mather [email protected]
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SOCIAL MEDIA
GENERATE ORIGINAL AND CREATIVE CONTENT
There is a lack of originality in WeChat content. Brands have to become publishers on WeChat and create better content to remain relevant to their audience. The content duplication rate for the beauty and infant nutrition industries are 42 percent and 40 percent respectively. There are lots of ways to be clever with content. Deploy pictures of scenic spots to trigger either curiosity or memory; use horoscopes to appeal to consumers’ self-identities; bring in news about cultural differences; turn mundane topics into games and quizzes; utilize trendy net-slang to become “adorkable” (adorable in a dorky way).
EXTEND BRAND PERSONALITY
Some brands take on the tone and manner of the industry instead of letting their brand personalities come through in WeChat. Take the infant nutrition industry for example, food for baby is a sensitive topic given a past history of melamine contamination. As a result, the brands all present themselves on WeChat as being very professional – but the flipside of professionalism can be dry and serious. However, if we look at advertisements of infant nutrition brands, they are caring, emotional and blissful. These brand personalities should surface in their WeChat accounts to win over the hearts of consumers.
APPLY RICH DISPLAY FORMATS
While it is common sense that a picture is better than a thousand words, this principle is not well practiced in WeChat. In regards to infant nutrition on WeChat, 19 percent of content is text only, 75 percent has one visual format and only 6 percent has more than two visual formats. Yet, moving up from one to three visual formats can garner 50 percent more reach and 246 percent more “likes”. And do not forget the increasing importance of video clips. With the fast development of social video such as Meipai and Weishi, consumers are embedding videos into their WeChat messages. They are going to expect the same from brands.
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AGENCY RESPONSE
That makes the role of media agencies in helping manage the complexity even more important than ever before. New-media owners like BAT are extremely knowledgeable, but their data and knowledge comes from within their own ecosystem. Media agencies, like GroupM, by contrast, may not have the same depth of information, but have a much broader perspective. BAT might be part of the answer but not all of it. You cannot consider either Baidu, Tencent, or Alibaba as the single solution to a company’s entire marketing challenge. Therefore, brand owners need to work with those who have a much wider view of all the marketing opportunities out there and who have a more neutral, objective opinion about them.
CONSIDER YOUR OPTIONS
Look beyond BAT and we see how TV stations thrived in 2015 by offering their variety shows and dramas, with high-quality content and cross-screen interaction. These hot programs have also generated buzz online. Before too long we could see packed cinemas, more Chinese-produced movies and associated advertising opportunities. Meanwhile, it’s worth noting that OOH (Out of Home advertising) grew 15 percent in the first half of 2015 year-on-year.
As marketers, we must look at the full picture of the media landscape to help us figure out effective solutions.
We see the evolution of media agencies toward a more holistic offering, realizing synergies between data, content, communication planning and trading disciplines. Moreover, bringing these disciplines closer and allowing them to inform one another beyond their usual scope will provide more effective media solutions. Technology is inevitably the biggest engine with which to drive the process. From a media agency’s perspective, technology represents the way we target and interact with customers, as well as the way we manage data.
GEARING UP
The importance of developing a technology stack for data management cannot be overstated. It’s the key to maximizing advertising performance and pricing. GroupM has developed its own technology to collect, optimize and store data on a proprietary Data Management Platform (DMP) and is rigorous in continuously expanding the stack with new solutions and companies. Soon it will be necessary for all brands to have their own DMPs, combining many data sources that can be accessed in order to know their target audiences better, for example, their socio-demographic, content consumption, interest, media behavior, and purchasing power. Meanwhile, technology has evolved rapidly towards buying advertising spots across most screens and media types. This effectual technology has enabled us to deliver dynamic and more personalized creations to different audiences, as well as real time optimization in performance. Programmatic buying will greatly enhance the efficiency and effectiveness of the whole media buying industry. With more premium media inventory coming into the pool, especially from mobile and video, we can expect 2016 to be another boom year for this field, especially PDB (Premium Direct Buying) which allows brands to purchase with media reserved inventory as well as fixed cost. This is despite the challenges in the digital space such as viewability, fraud, measurement and currency, all of which we expect to be solved by market forces. The only constant is change. Only by analyzing the full media landscape, and using DMPs to gain better data insights, as well as automated trading desks ensuring real time performance, can a marketer be more confident in his/her media investment decision.
The year 2015 saw fierce competition amongst BAT (Baidu, Alibaba, and Tencent). These kingmakers of China’s Internet were shaping the market, changing consumers’ behavior and the media world. But marketers are
left feeling somewhat confused. The new media landscape offers limitless opportunities but also risks in terms of which marketing channels to
choose, how to make decisions and how much to spend. The more options available, the more important your investment decision is likely to be.
THE FUTURE IS NOW - HOW ARE MEDIA AGENCIES RESPONDING?
Patrick Xu CEO GroupM China [email protected]
OUR INSIGHTS
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The past twelve months saw WeChat gaining tremendous velocity in the social media space. Amongst the 600 million users globally, 570 million are
considered active users in China. These Chinese users rely heavily on WeChat for social networking. Statistics reveal that 57.3 percent of them get to make new friends via WeChat while 86.1 percent have increased interactions with friends.
Not only are instant messaging, and sharing moments becoming daily routines, engaging in group conversations is emerging as an affinitive behavior. Private chat groups ranging from tens to the maximum of 500 users have mushroomed. Some of those groups focus on a certain interest, some are for educational purposes, some for e-commerce, and some are simply for daily networking. Within the groups, the sharing, commenting and endorsing of
discussions can easily accumulate to thousands of messages per day.
This huge exchange of content on the mobile platform challenges brands to rethink their communication model. Like it or not, brands cannot simply practice B2B or B2C communications, it’s officially the B2H communication era. While drawing the stakeholder map, brands need to consider the interest of the public at large in addition to distinctive groups. Always put a purpose at the core of the brand narrative, inject it with creativity, and articulate into relevant stories to tell. To catch eyeballs and be sharable, the content has to carry a bit of humor, timeliness and relevance. When everything is done right and by leveraging the power of WeChat sharing, brands will be surprised at the number of advocates they have. Indeed, every individual is an influencer.
It’s said that once we step into the B2H era, there’s no turning back!
ONIE CHUDeputy Managing Director
Hill+Knowlton [email protected]
BUSINESS TO HUMAN
IN THE B2H ERA, EVERYONE CAN BE A
BRAND ADVOCATE
China is undoubtedly riding the digital trend, as evidenced by the rapid growth in the use of smartphone, e/m-commerce, mobile payment, smart TV, etc. This gives advertisers unprecedented opportunities to reach consumers through diverse digital channels, but it also creates challenges. We now see only a fragmented view of consumers across multiple devices, making it more difficult to provide coherent ad delivery. Complicating matters is the increasingly cluttered business environment in China. Advertisers now have to work harder to make more cost efficient campaign delivery and use more accurate targeting to make every RMB count. As a result, reaching Chinese consumers effectively and efficiently while making advertising engaging is a key focus.
Fortunately, advertisers now have access to abundant consumer data and enhanced technologies to help them find creative solutions to these challenges. Key amongst these is programmatic buying. A data-driven approach, programmatic buying allows advertisers to target audiences more intelligently by identifying who they are and how to reach them. For example, Xaxis deploys our own Data Management Platform, Turbine, to leverage client 1st party, 3rd party data and Demand Side Platform (DSP) to maximize our ability to target the right audience, serve the best ad, and create value for the client. As the benefits become more widely recognized, we anticipate programmatic buying is set to play an even bigger role in China’s integrated marketing strategy.
MICKEY ZHANGManaging DirectorXaxis China [email protected]
MEDIA
PROGRAMMATIC BUYING GAINS GROUND
The hunt for growth is familiar to companies the world over. Twenty years ago global brands looking to expand turned to China, nowadays it is China turning to the world for growth opportunities.
The early days of China’s outbound investment were marked by hard-power considerations – securing strategic stakes in key natural resources critical to sustaining Chinese growth; and in markets in which geopolitical alliances could be forged to promote Chinese interests. Customers and partners tended to be governments and large multinational corporations.
Today, soft-power has come to the fore as many Chinese companies look to access consumers in the markets they are expanding into. Building relationships and a respectable name
for Chinese businesses is increasingly important. Brand China matters.
Where IQ aims to measure rational intelligence and EQ the ability to identify and assess emotions, we see a new quotient on the horizon. That is CQ, or cultural intelligence, defined as the ability to recognize the cultural factors that drive how different people, organizations and civilizations view the world. Just as global brands with low cultural intelligence failed when they didn’t adapt their products and business models to China, so will Chinese companies fail if they don’t respond sensitively to cultural differences overseas.
In this current phase of outbound investment Chinese companies will need to focus on their cultural intelligence like never before.
SCOTT KRONICKCEOOgilvy Public Relations, Asia [email protected]
LYNDON CAOManaging DirectorChina Practice, Ogilvy & Mather
CULTURE
CHINA OUTBOUNDTHE IMPORTANCE OF CQ
TOP 100 Most Valuable Chinese Brands 2016
In today’s digital and data-enabled world, the fastest growing businesses are those that put insights and analytics at the center of their
strategy. As validated in our global Insights20201 study, over-performers foster a more customer-centric culture and build structures and capabilities to deliver insight-led strategies.
Chinese businesses outperform the global average in delivering ‘Data Driven Customization’ and ‘Touch Points Consistency’. Chinese brands also stand out from their global counterparts, scoring higher on ‘Experimentation’ and ‘Collaboration’. In China, the cost of waiting is high, the cost of failing low –Chinese brands experiment more and learn faster.
However, Chinese companies do not seem to be as “customer obsessed” as their global counterparts.
Customer Centricity is a top priority for the leaders at 91 percent of the global over-performing companies, compared to only 67 percent in China.
It’s not due to lack of data. In fact, we often hear of ‘Infobesity.’ Insights and Analytics teams that leverage the power of data effectively are in a position to shape the business agenda. This, though, requires a significant change in capabilities. Chinese companies have an opportunity to catch up with global over-performers in making Insights & Analytics more business focused, in taking a more ‘whole-brain’ approach to data, and in being better storytellers to create more impact.
BENOIT GARBE Managing Director
Kantar Vermeer Greater China, Africa, Middle
East, Asia [email protected]
INSIGHT & ANALYTICS
UNLEASHING CUSTOMER CENTRIC GROWTH
1 325 businesses, marketing, and I&A leaders were interviewed, and more than 10,000 practitioners from 60 countries participated in the online Insights2020 survey.
06RESOURCES
BRANDZ™ VALUATION METHODOLOGY
BRANDZ™ ELIGIBILITY AND DEFINITIONS
BRANDZ™ REPORTS, APPS AND IPAD MAGAZINES
WPP COMPANIES
WPP COMPANY CONTRIBUTORS
WPP COMPANY BRAND BUILDING EXPERTS
BRANDZ™ CHINA TOP 100 TEAM AND ACKNOWLEDGMENTS
ABOUT WPP
BRANDS VALUATION CONTACT DETAILS
WPP IN CHINA
BRANDZ™ ONLINE AND MOBILE
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METHODOLOGY
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BrandZ™ Brand Valuation Methodology PART A
We start with the corporation. In some cases, a corporation owns only one brand. All Corporate Earnings come from that brand. In other cases, a corporation owns many brands. And we need to apportion the earnings of the corporation across a portfolio of brands.
To make sure we attribute the correct portion of Corporate Earnings to each brand, we analyze financial information from annual reports and other sources, such as Kantar Worldpanel and Kantar Retail. This analysis yields a metric we call the Attribution Rate.
We multiply Corporate Earnings by the Attribution Rate to arrive at Branded Earnings, the amount of Corporate Earnings attributed to a particular brand. If the Attribution Rate of a brand is 50 percent, for example, then half the Corporate Earnings are identified as coming from that brand.
PART BWhat happened in the past or even what’s happening today is less important than the prospects for future earnings. Predicting future earnings requires adding another component to our BrandZ™ formula. This component
assesses future earnings prospects as a multiple of current earnings. We call this component the Brand Multiple. It’s similar to the calculation used by financial analysts to determine the market value of stocks (Example: 6X earnings or 12X earnings). Information supplied by Bloomberg data helps us calculate a Brand Multiple. We take the Branded Earnings and multiply that number by the Brand Multiple to arrive at what we call Financial Value.
STEP 1: CALCULATING FINANCIAL VALUE
STEP 2: CALCULATING BRAND CONTRIBUTIONSTEP 3: CALCULATING BRAND VALUE
INTRODUCTION
THE VALUATION PROCESS
The brands that appear in this report are the most valuable in China. They were selected for inclusion in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016 based on the unique and objective BrandZ™ brand valuation methodology that combines extensive and on-going consumer insights with rigorous financial analysis.
The BrandZ™ valuation methodology can be uniquely distinguished from its competitors by the way we obtain consumer viewpoints. We conduct worldwide, on-going, in-depth quantitative consumer research, and build up a global picture of brands on a category-by-category and market-by-market basis.
Globally, our research covers three million consumers and more than 100,000 different brands in over 50 markets. This intensive, in-market consumer research differentiates the BrandZ™ methodology from competitors that rely only on a panel of “experts”, or purely on financial and market desktop research.
So now we have got from the total value of the corporation to the part that is the branded value of the business. But this branded business value is still not quite the core that we are after. To arrive at Brand Value, we need to peel away a few more layers, such as the in-market and logistical factors that influence the value of the branded business, for example: price, availability and distribution.
What we are after is the value of the intangible asset of the brand itself that exists in the minds of consumers. That means we have to assess the ability of brand associations in consumers’ minds to deliver sales by predisposing consumers to choose the brand or pay more for it.
We focus on the three aspects of brands that we know make people buy more and pay more for brands: being Meaningful (a combination of emotional
Now we take the Financial Value and multiply it by Brand Contribution, which is expressed as a percentage of Financial Value. The result is Brand Value. Brand Value is the dollar amount a brand contributes to the overall value of a corporation. Isolating and measuring this intangible asset reveals an additional source of shareholder value that otherwise would not exist.
Before reviewing the details of this methodology, consider these three fundamental questions: why is brand important; why is brand valuation important; and what makes BrandZ™ the definitive brand valuation tool?
IMPORTANCE OF BRAND
Brands embody a core promise of values and benefits consistently delivered. Brands provide clarity and guidance for choices made by companies, consumers, investors and others stakeholders. Brands provide the signposts we need to navigate the consumer and B2B landscapes.
At the heart of a brand’s value is its ability to appeal to relevant customers and potential customers. BrandZ™ uniquely measures this appeal and validates it against actual sales performance. Brands that succeed in creating the greatest attraction power are those that are:
MEANINGFUL In any category, these brands appeal more, generate greater “love” and meet the individual’s expectations and needs.
DIFFERENTThese brands are unique in a positive way and “set the trends”, staying ahead of the curve for the benefit of the consumer.
SALIENTThey come spontaneously to mind as the brand of choice for key needs.
IMPORTANCE OF BRAND VALUATION
Brand valuation is a metric that quantifies the worth of these powerful but intangible corporate assets. It enables brand owners, the investment community and others to evaluate and compare brands and make faster and better-informed decisions.
Brand valuation also enables marketing professionals to quantity their achievements in driving business growth with brands, and to celebrate these achievements in the boardroom.
DISTINCTION OF BRANDZ™
BrandZ™ is the only brand valuation tool that peels away all of the financial and other components of brand value and gets to the core – how much brand alone contributes to corporate value. This core, what we call Brand Contribution, differentiates BrandZ™.
and rational affinity), being Different (or at least feeling that way to consumers), and being Salient (coming to mind quickly and easily as the answer when people are making category purchases).
We identify the purchase volume and any extra price premium delivered by these brand associations. We call this unique role played by brand, Brand Contribution.
Here’s what makes BrandZ™ so unique and important. BrandZ™ is the only brand valuation methodology that obtains this customer viewpoint by conducting worldwide on-going, in-depth quantitative consumer research, online and face-to-face, building up a global picture of brands on a category-by-category and market-by-market basis. Our research now covers over three million consumers and more than 100,000 different brands in over 50 markets.
METHODOLOGY
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Eligibility criteria and definitionsELIGIBILITY DEFINITIONS
The brands ranked in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016 report meet all of these eligibility criteria:
• The brand was originally created by a Mainland Chinese enterprise; and
• The brand is owned by a publicly traded enterprise, or whose financials are audited by major global accounting practice and published in the public domain;
• Bank brands derive at least 20 percent of earnings from retail banking.
BRAND CONTRIBUTION
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 as an index on a scale of one to five, with five being the highest.
BRAND POWER
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
MEANINGFULConsumers feel an affinity for the brand or think it meets their needs.
DIFFERENTThe brand feels different to other brands in the category, or sets trends for the category.
SALIENTThe brand comes to mind quickly and readily when activated by ideas related to category purchase.
BRANDZ™ REPORTS, APPS AND IPAD MAGAZINES
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BrandZ™ - the ultimate resource for brand knowledge and insight
BrandZ™ Top 50 Most Valuable Indian Brands 2015
This ground-breaking study analyses the success of Indian brands across 13 categories, examines the dynamics reshaping the Indian market and offers insights for building valuable brands.
BrandZ™ Top 50 Most Valuable Indonesian Brands 2015
This new study explores the achievements of Indonesian brands, examining the dynamics shaping this fast-emerging market and offering insights for building valuable brands.
Spotlight on Myanmar
The story of Myanmar is one of huge potential, as a new era of openness signals strong growth opportunity. Now is the time for brands to make an impression in this emergent economy.
BrandZ™ Top 50 Most Valuable Latin American Brands 2015
The report profiles the most valuable brands of Argentina, Brazil, Chile, Colombia, Mexico and Peru and explores the socio-economic context for brand growth in the region.
For the iPad magazine, search BrandZ Latin America on iTunes.
8 Retail Trends in China
With the continued rebalancing of the Chinese economy, 2016 - The Year of the Monkey, could be characterized as another year of change for China. The retail sector is at the intersection of much of this transformation, and with the rapid growth of e-commerce, Chinese retail is changing and adapting fast.
BrandZ™ Top 100 Most Valuable Global Brands 2015
This is the definitive global brand valuation study, analysing key trends driving the world’s largest brands, exclusive industry insights, thought leadership and a retrospective look at 10 years of BrandZ™.
The Power and Potential of the Chinese Dream
The Power and Potential of the Chinese Dream is rich with knowledge and insight, and forms part of a growing library of WPP reports about China. It explores the meaning and significance of the Chinese Dream for Chinese consumers as well as its potential impact on brands.
Unmasking the individual Chinese Investor
This exclusive new report provides the first detailed examination of Chinese investors, what they think about risk, reward and the brands they buy and sell. This will help brand owners worldwide understand market dynamics and help build sustainable value.
The Chinese New Year in Next Growth Cities
The report explores how Chinese families celebrate this ancient festival and describes how the holiday unlocks year-round opportunities for brands and retailers, especially in China’s lower tier cities.
For the iPad magazine search for Chinese New Year on iTunes.
The Chinese Golden Weeks in Fast Growth Cities
Using research and case studies, the report examines the shopping attitudes and habits of China’s rising middle class and explores opportunities for brands in many categories.
For the iPad magazine, search Golden Weeks on iTunes.
TrustR
Engaging Consumers in the Post-Recession World Trust is no longer enough. Strong brands inspire both Trust (belief in the brand’s promise developed over time) and Recommendation (current confirmation of that promise). This combination of Trust plus Recommendation results in a new metric called TrustR.
ValueD
Balancing Desire and Price for Brand SuccessDesire is primary. High Desire enables Price flexibility. A new metric, ValueD, measures the gap between the consumer’s Desire for a brand and the consumer’s perception of the brand’s Price. By quantifying this gap, ValueD helps brands optimize their profit and, market-positioning potential.
RepZ
Maximising Brand and Corporate IntegrityMajor brands are especially vulnerable to unforeseen events that can quickly threaten the equity cultivated over a long period of time. But those brands with a better reputation are much more resilient. Four key factors drive Reputation: Success, Fairness, Responsibility and Trust. Find out how your brand performs.
CharacterZ
Brand personality analysis deepens brand understandingNeed an interesting and stimulating way to engage with your clients? Want to impress them with your understanding of their brand? A new and improved CharacterZ can help! It is a fun visual analysis, underpinned by the power of BrandZ™, which allows detailed understanding of your brand’s personality.
Get the BrandZ™ Top 100 Most Valuable Global Brands, Chinese Top 100, Latin American Top 50, Indian Top 50 and many more insightful reports on your smartphone or tablet.
To download the apps for the BrandZ™ rankings go to www.BrandZ.com/mobile (for iPhone and Android). BrandZ™ is the world’s largest and most reliable customer-focused source of brand equity knowledge and insight. To learn more about BrandZ™ data or studies, or view one of our industry insight videos, please visit www.BrandZ.com, or contact any WPP company.
BrandZ™ on the move
WPP COMPANY CONTRIBUTORS
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These companies contributedexpertise and perspective
ADDED VALUE
Added Value is a leading global strategic marketing consultancy providing brand strategy, innovation, insight and communications services. We are driven by one thought – to make marketing that works. Our approaches include qualitative insight and ethnography, segmentation and portfolio planning, brand positioning, cultural insight, innovation, brand equity studies, communications optimization and tracking. Added Value has 17 offices in 11 countries across Europe, North America and Asia-Pacific, and is accredited among “Best Companies to Work For 2014.”
Added Value is part of Kantar, the data investment management division of WPP, the world leader in marketing communications services.
www.added-value.com
Reggie Jin Managing Director [email protected]
ALWAYS MARKETING SERVICES
Always is the largest Field Marketing Services Agency in China, providing Total Field Marketing Solutions from “Sell In”” to “Sell Out””, from “Activation Strategic Planning” to “On-The-Ground Execution”. With a network of 90+ fully-owned offices throughout China, Always has the capabilities to activate in 600+ Tier 1 to Tier 6 cities. Service Offerings include Promoter & Field Marketer Management, In-Store Activation / Promotion, Retail Audit / Mystery Shopper, Event / Road Show, POSM Management and Premium / Gifting.
Always manages 800+ projects on an annual basis across 500+ cities, executing more than 3.5 million activations on behalf of a portfolio of Blue-Chip Clients. Client partners include Unilever,Nestle,Colgate, Johnson & Johnson, Ferrero, Nokia, Intel, Microsoft, Shell, VISA, Pfizer and many more...
www.alwaysmkt.com
Cai Hua CEO, China [email protected]
CTR
CTR Media & Consumption Behavior Research analysts and experts help advertisers, media owners and advertising agencies measure their media image and impact. Born and raised in China, Chinese culture and values are a part of our DNA. We have witnessed the seismic transformation of the market, experienced numerous industry reforms, while building expertise in media management, brand and advertising communications and consumer research.
Our in-depth knowledge of the local market, with a global perspective, enables us to discover the insights that make sense of what is hidden beneath today’s developments. We inspire our clients to make informed decisions based on our unparalleled and profound understanding of thecritical challenges they face in the Chinese marketplace. This is what we bring you, China insights. We can do this because we know China better. China Insight is at the core of our brand value. We aim to share unique viewpoints, look behind the numbers, beyond the trends and between the lines. In short, our job is to help companies and brands understand the Chinese market, its people, and to win in China.
www.ctrchina.cn/en
Ruoyu Chen President, China [email protected]
ESP PROPERTIES
ESP Properties is a commercial and creative advisor for sports and entertainment rightsholders, helping these organisations unlock greater value from their audiences and brand partnerships.
The Consulting team assesses, and advises how to grow, the value of rightsholders’ commercial programs, through a full range of services across data, digital and content development to better understand their audience, and create more relevant ways to engage with them.
The Sales team provides partnership strategy and sales representation to the world’s most active sponsors, within and beyond the WPP network.
www.espglobal.com
John KristickGlobal [email protected]
GREY
Grey, with 121 offices in 116 cities in 94 countries, ranks among the largest global advertising companies. Our long-standing reputation for launching and building many of the world’s leading brands is rooted in our blue- chip client roster, which includes one- fifth of all Fortune 500 companies. Grey today is a full-service agency with a total offering that delivers best-in-class brand communications in every channel, with one uncompromising focus: to accelerate the potential of our clients’ brands with powerful strategy and creative ideas across all touch points.
www.grey.com
Nirvik Singh Chairman & CEO, Asia Pacific [email protected]
GREY DIGITAL
Grey Digital, a Grey Group company, believes in creating unique and engaging digital experiences with the vision to lead the industry as digital lifestyle enablers, specializing in digital engagement, activation and retention strategies.
Over the years, Grey Digital has garnered many international awards, features in publications and actively involved in the student community. Besides commercial work, we often find ourselves hatching our own digital properties, fueled by our passion for creativity. This includes: ‘Hardboiled’ the CSR Magazine; ‘GotCharacter?’ the Design Competition; ‘End Earth’ the non-Linear Digital Comic; ‘SixtyFive’ the Music Portal and our other emerging projects.
These initiatives are our testament to what we do best and love doing - to be highly creative, absolutely fun and digitally daring.
www.grey.com
Joseph Tsang Digital eCosystem Director, Greater China [email protected]
GROUPM
GroupM is the leading global media investment management company serving as the parent to WPP media agencies including Mindshare, MEC, MediaCom, and Maxus, each global operations in their own right with leading market positions. GroupM’s primary purpose is to maximize performance of WPP’s media agencies by operating as leader and collaborator in trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. GroupM’s focus is to deliver unrivaled marketplace advantage to its clients, stakeholders and people.
www.groupmchina.com
Patrick XuCEO China [email protected]
HILL+KNOWLTON STRATEGIES
Hill+Knowlton Strategies was the first international communications consultancy to establish a presence in China in 1984. Headquartered in Beijing, with offices in Shanghai and Guangzhou, H+K China is one of the largest PR agencies in this market, employing 250 bilingual communications professionals who provide cross-sector, integrated communications services to many Fortune 500 companies.
With 30 years of market experience and insights, H+K China has established itself as an industry leader in corporate communications, marketing communications, public affairs, media relations, crisis and issue management, and digital communications. Hill+Knowlton Strategies, Inc. is headquarteredin New York, with 86 offices in 49 countries, as well as an extensive associate network.
www.hkstrategies.com
Ye Yu Chairman, China [email protected]
WPP COMPANY CONTRIBUTORS
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KANTAR
Kantar is the data investment management arm of WPP and one of the world’s largest insight, information and consultancy groups. By uniting the diverse talents of its 12 specialist companies, the group is the pre-eminent provider of compelling data and inspirational insights for the global business community. Its 30,000 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies.
www.kantar.com
Jules Young Global Account Director, China [email protected]
KANTAR HEALTH
Kantar Health is a leading global healthcare consulting firm and trusted advisor to many pharmaceutical, biotech, and medical device and diagnostic companies worldwide. It combines evidence-based research capabilities with deep scientific, therapeutic and clinical knowledge, commercial development know-how, and brand and marketing expertise to help clients evaluate opportunities, launch products and maintain brand and market leadership. Its 600+ healthcare industry specialists work across the product lifecycle from preclinical development to launch, acting as catalysts to successful decision-making in life sciences. Kantar Health is part of Kantar, the data investment management division of WPP.
www.kantarhealth.com
Diana Tan General Manager China [email protected]
KANTAR MEDIA CIC
Kantar Media is a global leader in media intelligence, providing clients with the data they need to make informed decisions on all aspects of media and social media measurement, monitoring and selection. Part of Kantar, the data investment management arm of WPP, Kantar Media provides the most comprehensive and accurate intelligence on media consumption, performance and value.
Asia-Pacific branch Kantar Media CIC is China’s and regional leading social and digital business intelligence provider. The experts from Kantar Media CIC enable enterprises to fully leverage the power of social media and other Internet based big data intelligence across the organization. Since 2004, Kantar Media CIC has pioneered social technology, research and consulting. Founded as CIC, it was acquired by WPP’s Kantar Media in 2012.
www.ciccorporate.com
Sam FlemmingCEO, [email protected]
KANTAR RETAIL
Kantar Retail works with leading retailers and branded manufacturers to transform the purchase behavior of consumers, shoppers, and retailers. Kantar Retail has over 400 employees and offices in 15 markets around the globe. The company is headquartered in London and is part of the Kantar Group of WPP. Kantar Retail has been present in China since 2004 and offers retail insights, consulting, retail analytics, and capabilities development services to clients.
www.kantarretail.com
Oceanne Zhang Director of Retail Insights and eCommerce [email protected]
KANTAR WORLDPANEL
Kantar Worldpanel is the world leader in continuous consumer panels. Our global team of consultants applies tailored research solutions and advanced analytics to bring you unrivaled sharpness and clarity of insight to both the big picture and the fine detail. We help our clients understand what people buy, what they use and the attitudes behind shopper and consumer behavior. We have more than 60 years’ experience in helping companies shape their strategies and manage their tactical decisions; we understand shopper and retailer dynamics; we explore opportunities for growth in terms of products, categories, and regions and within trade environments. Together with our partner relationships, we are present in more than 50 countries – in most of which we are market leaders –which means we can deliver inspiring insights on a local, regional and global scale. In China, we are one of services of CTR.
www.kantarworldpanel.com/cn-en
Jason Yu General Manager, China [email protected]
LANDOR
As a global leader in brand consulting and design, Landor helps clients create agile brands that thrive in today’s dynamic, disruptive marketplace. Our work enables top brands – from Barclays to BMW and Tide to Taj – to stand for something while never standing still. Landor’s branding services include strategy and positioning, identity and design, brand architecture, innovation, naming and verbal branding, research and analytics, environments and experience, engagement and activation, and digital and social media.
Founded by Walter Landor in 1941, Landor pioneered many of the research, design, and consulting methods that are now standard in the branding industry. Today, Landor has 27 offices in 21 countries, working with a broad spectrum of world-famous brands. Clients include Jin Jiang Group, Shougang, Coca-Cola, Tong Ren Tang, Jiangkang, Yuanda, Midea, Leiyunshang, BMW, ECADI and Chia Tai Group among many others.
www.landor.com
Connie Leung President Greater China [email protected]
MAXUS GLOBAL
Maxus is a global media agency with services including communications strategy, media planning and buying, digital marketing, social media strategy, SEO, SEM, direct response media, data analytics, and marketing ROI evaluation.
Maxus help marketers build profitable relationships between consumers and their brands, combining the disciplines of communications planning and customer relationship marketing to deliver “Relationship Media,” our new model powered by creative media thinking and sophisticated, real-time customer data.
www.maxusglobal.cn
Annie Hsiao President, China [email protected]
These companies contributedexpertise and perspective
MILLWARD BROWN
We’re experts in advertising, marketing communications, media, digital and brand equity research, and we work with 90 percent of the world’s leading brands. We know brands that are meaningfully different capture more volume share, command premiums and grow their value. Our key areas of focus are brand strategy, creative development, channel optimization and brand performance. Our team includes some of the most talented market researchers, consultants, storytellers and neuroscience experts in the industry. With offices in 56 countries, we understand the importance of both a global and local focus – and we understand consumers. Today, many brands are a company’s most valuableasset. We can help you manage your brands to drive financial growth and wealth creation for your organization.
www.millwardbrown.com
Rana Deepender Head of Greater China [email protected]
WPP COMPANY CONTRIBUTORS
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MILLWARD BROWN VERMEER
Millward Brown Vermeer is the consultancy arm of Millward Brown, dedicated to unleashing purpose-led brand growth. In today’s global and technology-enabled market, brands and businesses face unprecedented complexity, constant disruption and profound questions: What business are we in? Why do we exist? And how do we build our organization?
Millward Brown Vermeer is the only global marketing consultancy focused on the development and embedding of consumer insight-led marketing strategy, structure and capability.
Our fusion of practitioner and consulting experience means we provide whole-brain solutions to strategic marketing challenges, rooting our approach in consumer research, stakeholder understanding and financial analysis.
www.mbvermeer.com
Benoit Garbe Managing Director [email protected]
OGILVY & MATHER
Ogilvy & Mather is one of the largest marketing communications companies in the world. It was named the Cannes Lions Network of the Year for four consecutive years, 2012, 2013, 2014 and 2015; and the EFFIEs World’s Most Effective Agency Network for two consecutive years 2012 and 2013. The company is comprised of industry leading units in the following disciplines: advertising; public relations and public affairs; branding and identity; shopper and retail marketing; healthcare communications; direct, digital, promotion and relationship marketing; consulting, research and analytics; branded content and entertainment; and specialist communications.
O&M services Fortune Global 500 companies as well as local businesses through its network of more than 500 offices in 126 countries. It is a WPP company (NASDAQ: WPPGY). For more information, visit our website, or follow Ogilvy on Twitter at @Ogilvy and on Facebook.com/Ogilvy.
www.ogilvy.com.cn
Chris Reitermann CEO, [email protected]
OGILVY PUBLIC RELATIONS
Ogilvy Public Relations Worldwide (Ogilvy PR) is a global, multi-disciplinary communications leader operating in more than 80 markets. Named Large Agency of the Year by The Holmes Report and PRNews, Ogilvy PR blends proven PR methodologies with cutting edge digital innovations to craft strategic programs that give clients winning and measurable results. Celebrating its 30th anniversary in business, Ogilvy PR provides strategic public relations counsel to a variety of clients across its social marketing, public affairs, healthcare, consumer marketing, 360-degree digital influence, corporate, and technology practices.
www.ogilvypr.com
Scott Kronick President, China [email protected]
OGILVYONE
OgilvyOne China is part of OgilvyOne Worldwide, the world’s leading customer engagement agency as ranked by Forrester Research, Inc. Our core promise to clients is to help unlock the full value of their customers by turning big ideas and data into personal experiences. This will bring our clients more customers and makes them more valuable. We achieve this by tapping into talent both at home and from our global network of more than 4,500 digital and customer engagement specialists. In China, we have approximately 300 in-house experts across Beijing, Shanghai and Guangzhou. We lead in both B2B and B2C multichannel marketing, and have deep industry expertise in categories spanning high technology, travel, consumer packaged goods, automotive, logistics and luxury. OgilvyOne China is a unit of Ogilvy & Mather, a WPP company (NASDAQ: WPPGY), one of the world’s largest communications services groups.
www.ogilvyone.com
Jacco Schegget President, China [email protected]
TNS
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and customer and employee relationships, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviors and attitudes across every cultural, economic and political region of the world.
TNS is part of Kantar, the data investment management division of WPP and one of the world’s largest insight, information and consultancy groups.
www.tnsglobal.com
Grace Liu CEO China [email protected]
XAXIS
Xaxis is the world’s largest audience buying company that programmatically connects advertisers to audiences across all addressable channels. Through the expert use of proprietary data and advertising technology along with unparalleled media relationships, Xaxis delivers results for over 2,800 clients in 45 markets across North America, Europe, Asia Pacific, Latin America and the Middle East. Advertisers working with Xaxis achieve exceptionally high return on advertising spend through the company’s proprietary media products, as well as through its specialist companies, Light Reaction, plista, Bannerconnect, and ActionX. Xaxis is a GroupM company that is part of WPP.
www.xaxis.com
Michel de Rijk CEO APAC [email protected]
These companies contributedexpertise and perspective
WPP COMPANY BRAND BUILDING EXPERTS
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These individuals provided brand and category knowledge and insights
Leon ZhangMillward Brown
Jason YuCTR
Oceanne ZhangKantar Retail
Patrick XuGroupM
Phat SongOgilvy Public Relations
Nils RoehrigGroupM
Adele Li Kantar Health
Jason Yu Kantar Worldpanel
Jacco ScheggetOgilvy One
Haidong GuanGrey
Joseph Tsang Grey
Mike ZhuOgilvy One
Mickey Chak Ogilvy & Mather
Yi Li OgilvyOne
Jenny MaMillward Brown
Charles Laporte AustOgilvy One
Lucy YuMillward Brown
Benoit GarbeMillward Brown
Theresa LooOgilvy & Mather
Zod FangGroupM
Mark Du Millward Brown
Rajshekhar Mylavarapu Millward Brown
Lily XiongOgilvy & Mather
Mickey ZhangXaxis
Liu YuGeTui
Sam FlemmingKantar Media CIC
Monica ZhaoKantar Media CIC
John KristickESP Properties
Jin Wei TohESP Properties
Annie HsiaoMaxus Global
Benjamin WeiGroupM
Barry LeungAlways Marketing Services
Scott KronickOgilvy Public Relations
Jules Young Kantar
Panos Dimitropoulos Added Value
Chris Bonsi TNS
Mikko Lan Ogilvy Public Relations
Ken Qiu Always Marketing Services
ZJ Wang Kantar Worldpanel
Huang Lei CTR
Peter Mack Landor
Fisher Yu Landor
Lyndon CaoOgilvy & Mather
Maneesh ChoudharyMillward Brown
Li YanCTR
Onie ChuH+K Strategies
BRANDZ™ CHINA TOP 100 TEAM
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These individuals created the report, providing research, valuations, analysis and insight, editorial, photography, production, marketing and communications
Amandine Bavent Amandine Bavent is a BrandZ™ Valuation Manager for Millward Brown. She manages the brand valuation projects for BrandZ™ Her role involves conducting financial analysis, researching brands and performing valuations.
Claire Pan Claire Pan is Senior Analysis Executive for research and development at Millward Brown, where she is responsible for brand research and analysis covering many categories to provide solutions for clients and detailed information for the BrandZ™ ranking studies.
Miquet Humphryes Miquet Humphryes is Director of Global Corporate Marketing at Millward Brown. She is responsible for overseeing the marketing and communications for the Top 100 ranking.
Ken Schept Ken Schept is a professional writer and editor specializing in reports and books about brands and marketing. He helped develop WPP’s extensive library of global publications and has reported on the international retail sector as an editor with a leading US business media publisher.
Doreen Wang Doreen Wang is the Global Head of BrandZ™, and a seasoned executive with 16 years experience in providing outstanding market research and strategic consulting for senior executives in Fortune 500 companies in both the US and China.
With special thanks and appreciation to: Peter Walshe for work on Brand China, Aman Aggarwal, Richard Ballard, Tuhin Dasgupta, Tamsin Grant, Jay Makwana, Anthony Marris, Ben Marshall, Gaurav Mittal, Katie Pearce, Amit Singh, Igor Tolkachev, Meimei Wang and Vivian Wang
Elspeth Cheung Elspeth Cheung is the Global BrandZ™ Valuation Director for Millward Brown. She is responsible for valuation, analysis, client management and external communication for the BrandZ™ rankings and other ad hoc brand valuation projects.
David Roth David Roth is the CEO of the Store WPP for Europe, the Middle East, Africa and Asia, and leads the BrandZ™ worldwide project. Prior to joining WPP David was main Board Director of the international retailer, B&Q.
Cecilie Østergren Cecilie Østergren is a professional photographer based in Denmark, she has worked closely with WPP agencies since 2009. Cecilie specializes in documentary, consumer insight and portraits. She has travelled extensively in China, Brazil and other locations to photograph images for the BrandZ™ reports.
Raam Tarat Raam Tarat is part of the Global Communications and Marketing team at Millward Brown. He project managed the production of the BrandZ™ Top 100 Most Valuable Chinese Brands 2016 report, as well as marketing communications for other BrandZ™ projects.
Christine Zhang Marketing Director of Millward Brown Greater China, Christine is responsible for Millward Brown Greater China’s brand communication and strategies, and helps organize research and fact checking for the BrandZ™ China ranking.
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WPP is the world’s largest communications services group with billings of US$76 billion and revenues of US$19 billion. Through its operating companies, the Group provides a comprehensive range of advertising and
marketing services including advertising & media investment management; data investment
management; public relations & public affairs; branding & identity; healthcare communications;
direct, digital, promotion & relationship marketing and specialist communications.
The company employs over 190,000 people (including associates and investments) in over
3,000 offices across 112 countries.
WPP was named Holding Company of the Year at the 2015 Cannes Lions International Festival of Creativity for the fifth year running. WPP was also named, for the fourth consecutive year, the World’s Most Effective Holding Company in the 2015 Effie Effectiveness Index, which recognizes the effectiveness of marketing communications.
For more information, visit www.wpp.com.
The brand valuations in the BrandZ™ Top 100 Most Valuable Chinese Brands are produced by Millward Brown using market data from Kantar Worldpanel, along with Bloomberg.
The BrandZTM brand valuation contact details
The consumer viewpoint is derived from the BrandZ™ database. Established in 1998 and constantly updated, this database of brand analytics and equity is the world’s largest, containing over three million consumer interviews about more than 100,000 different brands in over 50 markets.
For further information about BrandZ™ contact any WPP Group company or:
DOREEN WANGGlobal Head of BrandZ™Millward Brown+1 212 548 [email protected]
ELSPETH CHEUNGGlobal BrandZ™ Valuation DirectorMillward Brown+44 (0) 207 126 [email protected]
MARTIN GUERRIERIAGlobal BrandZ™ Research DirectorMillward Brown+44 (0) 207 126 [email protected]
BLOOMBERGThe Bloomberg Professional service is the source of real-time and historical financial news and information for central banks, investment institutions, commercial banks, government offices and agencies, law firms, corporations and news organizations in over 150 countries. (For more information, please visit www.bloomberg.com)
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In Greater China, WPP companies (including associates) generate revenues of $1.5 billion with almost 15,000 people in Beijing, Shanghai, Guangzhou and many other cities and provinces.
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WPP in China Online and Mobile
WPP is the world’s largest communications services group with billings in 2013 of $72.3 billion and revenues of $17.3 billion. Through its operating companies, WPP provides a comprehensive range of advertising and marketing services including advertising and media investment management; data investment management; public relations and public affairs; branding and identity; healthcare communications; direct, digital, promotion and relationship marketing and specialist communications. The company employs over 179,000 people (including associates) in over 3,000 offices across 111 countries. To learn more about how to apply this expertise to benefit your brand, please contact any of the WPP companies that contributed to this report or contact:
TB SONGChairman, WPP Greater [email protected]
BESSIE LEEChief Executive Officer, WPP [email protected]
JULIANA YEHHead of Corporate Communications, WPP Asia [email protected]
For further information about WPP companies worldwide, please visit: www.wpp.com/wpp/companies
or contact:
DAVID ROTHCEO The Store, WPP EMEA and [email protected]
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