Tencent remains China's most valuable brand
As in the previous year, Tencent is once again the most valuable Chinese brand in 2016. The Shenzhen-based internet company increased its brand value by 24% to 82.1 billion US dollars.
The mobile communications provider China Mobile recorded a slight increase in value (+2%) to USD 57.2 billion - enough to push last year's rising star Alibaba out of second place. Alibaba suffered a 20% drop in value compared to 2015 and is in third place in this year's ranking with 47.6 billion US dollars. Newcomer Huawei makes it into the top 10 straight away with a value of 18.5 billion US dollars and takes seventh place. These are some of the key findings of the BrandZ Top 100 most valuable Chinese brands study, which was conducted for the sixth time by the international marketing and market research company Millward Brown. The study analyzes the most valuable Chinese brands on the basis of key financial figures as well as market and consumer research data. The ranking is compiled by Millward Brown in cooperation with the media group WPP.
At 51%, privately organized companies contributed more than half of the total brand value of 525.6 billion US dollars of the 100 most valuable Chinese brands for the first time this year. This illustrates both China's continued course towards a market economy and the high resilience of strong brands in economically difficult times - the economy in China has recently slowed down noticeably.
"The results show that many Chinese brands have now caught up with multinational brands in important dimensions. Chinese brands achieve excellent scores in some key factors such as brand awareness and customer dialog, but still have some catching up to do in terms of differentiation," says Bernd Büchner, Managing Director of Millward Brown for Germany, Austria and Switzerland.
Tencent's success in the Chinese brand value ranking is based on a strategy that focuses on the user and successfully combines the categories of content, services and hardware. The Group has monetized the messaging service WeChat through a cooperation with the online retailer JD.com and the joint development of data-based marketing solutions. TenPay also belongs to Tencent - the platform is now the number 2 online payment service on the Chinese market.
Huawei and JD.com most successful newcomers
The most successful newcomers are Huawei (7th place with 18.5 billion US dollars) and JD.com (15th place with 9.4 billion US dollars). Huawei scores with its international presence and a very strong mobile communications division. There are three main reasons for the success of JD.com, a direct competitor of Alibaba: the internationalization of its e-commerce offering, significantly improved mobile platforms and various partnerships with international premium brands.
"The Chinese market is particularly dynamic in the area of mobile applications. In this respect, the mobile presence should already represent a brand in all its facets today: Advertising and marketing, social communication, shopping and payment. International companies that are already active in China or want to be active in the future should not underestimate the speed of digitalization," says Bernd Büchner.
Further trends from the current ranking:
Especially High-growth categoriesThe personal care (+61%) and jewelry retail segments (+61%) recorded the strongest growth, followed by the real estate, insurance, airlines and travel categories. Consumers are therefore still investing in luxury goods and spending a lot of money on personal care and health products.
The Rise of the technology brandsTechnology brands claimed 27% of the total brand value of the top 100 in this year's ranking. Just two years ago, this figure was 16 percent. Three companies from the technology sector also lead the ranking of brands that generated the largest share of their turnover abroad: Lenovo with 68%, Huawei with 62% and ZTE with 50%.
Innovative brands grow faster: If the brands are assessed according to their degree of innovation, the top third of the most innovative brands recorded growth of 29% between 2014 and 2016, whereas the brands in the bottom third grew by just 3%.
Letv and NetEase with the greatest momentum: The content provider Letv (32nd place and USD 2.8 billion) and the gaming platform NetEase (40th place and USD 1.9 billion) show the strongest momentum with growth of 81% and 73% respectively.
"Over the past 35 years, many brands have benefited from China's almost immeasurable economic growth. But those days are now over. In order to continue to increase their value in the future, Chinese brands must now also increasingly emphasize their uniqueness, invest in innovations and constantly deepen customer relationships," concludes Bernd Büchner.
A table of the 100 most valuable Chinese brands is available here for download (PDF). Further information material, such as infographics, a video and the detailed report can be found here.
