State-owned brands still lead in China
BEIJING: State-owned enterprises remain by far the most valuable brands in China, but a new generation of private companies are starting to challenge their position.
Millward Brown, the insights group, reported that China's 50 biggest brands had a combined net worth of $325bn, and had seen their share price rise by 20% in 15 months, versus a 6% drop for the MSCI stock market index of indigenous firms.
China Mobile, the telco, topped the value charts on $53.6bn. It was followed by four banks: ICBC on $43.9bn, the China Construction Bank on $21.9bn, the Bank of China on $18.6bn and the Agricultural Bank of China on $17.3bn.
More broadly, privately-owned enterprises made up two-thirds of the top 50 and saw growth of 27% in brand value year -on-year. State-owned enterprises rose 13% on this measure, and delivered 70% of the total brand value.
Similarly, eight of the top 10 operators were state-owned enterprises. The two exceptions were Baidu, the search engine, in eighth on $16.3bn, and Tencent, the online company, in tenth on $12.6bn.
Elsewhere, Millward Brown found that over half the members of its top 50 were established after 1990, and six - collectively claiming a brand value of $50bn - did not exist in 2000.
As a sign of current limitations, however, the top 50 derive an average of less than 5% of sales from outside China, although the figure topped 50% for Lenovo, the IT group.
Previous multimarket research by Millward Brown covering nations like Australia, India, Malaysia, South Africa, the UK and US also found that 83% of shoppers could not name a single Chinese brand.
Lenovo enjoyed the strongest awareness, with Haier, the appliance manufacturer, Tsingtao, the beer, and Li-Ning, the sportswear brand, also among the best-known operators.
Separately, Millward Brown assessed 779 leading Chinese assets to understand the "brand contribution" to sales. It found that the offerings perceived as possessing the most "meaning" and to be "different" outperformed the norm by 43%.
Exactly half of the top 50 excelled on either one or both of these metrics, as was the case for Sina, the web company, which logged the fastest growth in brand value last year, up 244% to $1,905, not least thanks to its popular Sina Weibo microblog.
Trust also plays a key role, as shown by Fulinmen, a cooking oil and rice products firm that depicts itself as a "caring mother" in its marketing communications. Fulinmen was the second fastest-growing brand on the rankings, up 138% to $380m.
Heritage is a third key trend, personified by Tong Ren Tang, the pharma group, which grew by 89% to just over $1bn. Established some 340 years ago, the firm continues to champion traditional medicines.
Data sourced from Millward Brown; additional content by Warc staff, 12 March 2012