Market-driven firms surpass State-owned enterprises in worth
The value of China's top 100 brands surged 13 percent to $525.6 billion last year despite the country's economic slowdown, an annual survey released on Monday showed.
And, for the first time ever, market-driven brands that are owned by entrepreneurial companies contributed more than half, or some 51 percent, of the value of the top 100, surpassing the State-owned enterprises, the survey known as the BrandZ Top 100 Most Valuable Chinese Brands said.
The 2016 edition of the survey was released in Beijing by the New York-based research firm Millward Brown, which owns BrandZ, and the communications group WPP Plc.
It said the result showed evidence of China's continuing transition to a market economy.
"The robust increase in brand value reflects the continued optimism of Chinese consumers, while demonstrating how resilient strong brands are in times of economic turbulence," said Doreen Wang, global head of BrandZ.
Personal care and jewelry were the fastest-growing categories in terms of brand value, followed by real estate, insurance, airlines and travel agencies, the survey revealed.
This is evidence that consumers are still spending on nonessentials, luxuries and big-ticket items, Wang said. They are also spending more on products relating to personal care and health, she added.
According to the survey, Tencent remains China's most valuable brand, growing its value 24 percent to $82.1 billion, followed by China Mobile at $57.2 billion and Alibaba at $47.6 billion.
The highest new entrants were telecoms brand Huawei, ranking seventh with a brand value of $18.5 billion and online retailer JD.com Inc that ranked 15th with a value of $9.4 billion.
Huawei has a strong worldwide presence and its smartphone business has been a powerful growth engine while JD, a challenger to Alibaba Group Holding Ltd, has benefited from the expansion of its mobile offering, the worldwide extension of its e-commerce platforms and partnerships with premium international brands.
"China is the most dynamic market in the world in terms of mobile use, and companies that intend to build their brands there should not underestimate the speed of the digitalization and mobilization wave," said Wang.
"Despite the slowdown in economic growth and extreme stock market fluctuations, consumers feel optimistic: They still hold on to the Chinese Dream of a better life for themselves and their families."
Technology brands accounted for 27 percent of the total value of the top 100, up from 16 percent from just two years earlier, and their growth has boosted the strength of the market-driven brands.
Three tech brands also topped the ranking of brands that generated the highest proportion of their revenue from overseas, including Lenovo at 68 percent, Huawei 62 percent and ZTE 50 percent.
Two tech brands, content provider LeEco, ranking 32nd and gaming platform NetEase that ranks 40th were the highest risers, increasing in value by 81 percent and 73 percent, respectively.
According to Deepender Rana, CEO of Millward Brown, the Chinese brands are now as competitive as multinationals.
The increasing power of "homegrown" brands may help stem the current outflow of capital from China that is concerning economists, he said.
"For 35 years, the tide of extraordinary economic growth lifted many brands, but now the 'free ride' is over in today's rebalancing China," said David Roth, CEO for EMEA and Asia, the Store WPP.
