Fashion
No prize for guessing who tops the list, but some surprises come further down.
There is no prize for guessing which brand is China’s most valuable… but there are surprises further down the top-10 list. Alibaba tops the list of China’s most valuable brands for the first time, recording annual growth of 59 percent to US$141 billion.
The accolade was awarded in the annual BrandZ Top 100 Most Valuable Chinese Brands ranking, published by WPP and Kantar. In the past five years, Alibaba has outperformed the WPP/Kantar Top 100 overall, with it’s brand value climbing 136 percent, compared to the Top 100’s 92 percent rise.
In the second spot on the list of China’s most valuable brands was Tencent, parent of WeChat. Perhaps the biggest surprise was JD which managed only 10th. (The full table is published below)
Despite China’s slower economic growth and international trade tensions, the total value of the BrandZ Top 100 increased 30 percent to $889.7 billion, the highest annual rise since the ranking launched in the year 2011. The growth has been fuelled by brands accelerating their expansion into China’s lower-tier cities, which have seen rapid development and rising consumer buying power, and increase positive attitudes to Chinese consumer brands with a global presence.
On this year’s list of China’s most valuable brands, 13 of the 24 categories increased in value, with entertainment seeing the largest year-on-year growth of 186 percent, followed by education (57 percent) and retail (55 percent). Technology accounted for the most brands out of the Top 100 (11), contributing 26 percent of the ranking’s total value and dominating the top 10 leaders in terms of overseas presence with six brands – double the number last year.
Innovators in AI, e-commerce, New Retail, and social media performed strongly in the study. The success of many high-performers, according to BrandZ, has been driven by a mobile-centric, convenience-driven Chinese lifestyle.
There is vast potential for further brand growth overseas as China moves beyond the industrial focus of its Belt and Road initiative towards establishing leadership in areas including AI, robotics, Internet of Things and green energy. The report also shows the investments brands make to build value are measurably rewarded in the stock market.
“China’s stock market volatility over the past year has provided a real-life stress test for valuable brands, which continued to outperform the market,” said WPP CEO David Roth. “Put simply, valuable brands deliver superior shareholder returns. $100 invested in the MSCI China Index in 2010 would be worth around $128 today. That $100 invested in the BrandZ China Top 100 would now be worth $211.
“The threshold to enter the BrandZ China Top 100 has more than doubled from $311 million in 2018 to $681 million this year, demonstrating the continued pace of growth for Chinese brands increasingly recognized as leading the way in innovation. Against a backdrop of heightened competition and disruption, building stronger brands is what it takes to stay in the game.”
Since first appearing in the ranking in 2015 following its IPO, Alibaba’s rise to the number one spot in 2019 reflects the growth of a brand which has contributed to transformational changes in the Chinese market.
In BrandZ’s ‘Brand Power’ metric of brand equity, Alibaba scored particularly strongly for being ‘meaningful’, suggesting the brand known for coining the term ‘New Retail’ has successfully created closer connections with its consumers.
The Brand Power metric also looks at how brands perform in being different (distinctive), and salient (coming to mind at the moment of consideration). While Chinese brands generally score well for being meaningful and salient, they do not perform as well in being viewed as truly distinctive from the competition or as trendsetters.
“Whether going abroad or expanding domestically, the potential for brand growth is huge for China’s most valuable brands,” said the global head of BrandZ at Kantar Doreen Wang, “but realizing it requires the knowledge and expertise needed to surmount new challenges. This report highlights the importance of Chinese brands to build a difference in the domestic and global marketplace.”
