Tencent Holdings Ltd. is China’s most valuable brand, according to the latest BrandZ’s ranking of China’s 100 most valuable brands. Tencent topped the list for the third year running having grow its brand value by 29% to US$106 billion. Alibaba Group Holding Ltd., ranked second with US$58 billion in brand value, while China Mobile dropped from second place to the third, despite recording a 1% growth in brand value to US$57 billion.
Other top-ten brands include ICBC, Baidu Inc, Huawei Technologies Co. Ltd, China Construction Bank, Ping An Insurance Company of China Ltd, Chinese alcohol brand Moutai, and Agricultural Bank of China, according to the BrandZ study, conducted by Kantar Millward Brown for WPP.
The study shows that the 100 top Chinese brands hit record levels in combined brand value in 2017, growing 6% to reach US$557.1 billion in aggregate value.
“Chinese brands are taking the leap and going global on the back of three key factors; the country’s rising international stature, pressure to find alternative sources of growth as the domestic market slows and increasing overseas consumer receptivity to Chinese brands. Young consumers around the world are increasingly positive towards Chinese brands and we now see entrepreneurial Chinese brands starting overseas before they make waves in their home market,” said Doreen Wang, global head of BrandZ.
Education and travel agencies were the fastest-growing sectors with a growth rate of 46%, although the much larger categories of technology and retail showed far higher expansion, up 16% to reach US$163.7 billion and 22% to US$74.2 billion, respectively.
Technology brands continued to lead the way. Tencent strengthened its hold on the top brand with the popularity of social media platform WeChat, and it’s also one of three technology brands in the Top 20 Risers listing, reflecting the centrality of the category to Chinese life and their advanced adoption of consumer technology.
Sina, ranked 61, build up its following among young people by its initiatives in live video and self broadcasting through its Weibo platform, driving a 43% rise in brand value to US$900 million. NetEase, an online and mobile games developer, and a major e-mail service supplier, grew 36% to reach US$2.6 billion in brand value.
The report also shows that Chinese brands continue to expand overseas. Lenovo, the most export-focused brand among the list, has 72% of its total revenues from overseas market, while Huawei and ZTE secured 58% and 47% of their revenues from outside China, respectively.
Chinese brands were active in 2016 in overseas merger and acquisition. Haier’s US$5.4 billion purchase of GE Appliances and Ctrip’s US$1.7 billion acquisition of U.K. online travel aggregator Skyscanner are the two most significant deals. Midea Group acquired two companies including Japan’s Toshiba Appliances and German robotics company Kuka.
“This year we have seen many firsts. With China emerging as a technology powerhouse, it is fitting that in Tencent we have the first brand from China to break the US$100 billion brand value barrier,” said Deepender Rana, CEO, Greater China at research firm Kantar Insights. “The Brand Power – which tests consumer inclination to select a given brand – of Chinese brands continues to grow and for the first time has started to surpass that of multinational rival brands.”
“We expect this trend to accelerate in future years as Chinese companies realize they need to build differentiated brands to command a premium in a competitive market, where penetration led growth is plateauing off in many categories.” added Rana.