Brands become more important in Chinese market
Brands have become more important in the Chinese market as consumers base more purchase decisions on branding, according to the latest annual Millward Brown BrandZ report.
China Mobile retained its number one spot in the annual top 50 Most Valuable Chinese Brands study, with a brand value of US$50,589m. It is closely followed by financial institutions ICBC and China Construction Bank in second and third.
Tech brands in China have reported “tremendous growth” according to the report, as Chinese consumers spend more time and money on digital and mobile platforms.
Chinese search engines Baidu and Tencent moved up the rankings to fourth and fifth respectively.
Non state-owned brands have also increased their representation on the top 50 accounting for more than a quarter (27 per cent) of the league compared to 22 per cent last year.
Standout brands include men’s fashion range Septwolves, which increased its brand value by 44 per cent during the year, Hainan Airlines, which increased its brand value by 23 per cent despite a 22 percent decline across the entire category by building a strong reputation for customer service, and domestic appliances brand Gree.
Chinese brands including laptop manufacturer Lenovo, internet firm Tencent and domestic appliances company Haier are also increasing their influence overseas as well as domestically.
The report states: “For Chinese consumers, brands are becoming more important than ever, playing an increasingly significant role in their consumption choices.”
This means there is an opportunity for companies to invest in their brands to gain advantage, the report claims.
Brands must build a strategy around becoming a bigger brand in China’s lower-tier cities, or a smaller brand in its first-tier cities, the report suggests.
The BrandZ top 50 Most Valuable Chinese Brands have also outperformed all companies in the MSCI China Stock Market Index delivering a higher return on investment, which Millward Brown says proves companies with strong brands deliver better shareholder value.
Despite this, the total value of the top 50 Most Valuable Chinese Brands fell 1.6 per cent to US$320,224 million compared to last year.
The study, commissioned by parent company WPP, combines analysis of financial and business performance with interviews with 35,000 Chinese consumers.
Read our cover feature on the influx of Chinese brands to the West in this week’s issue of Marketing Week (6 December) and online.