Growth of brand value in private sector beats SOEs

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The brand value growth of non-State-owned enterprises in China is three times larger than that of SOEs, indicating an increasingly consumer-driven market amid government efforts to emphasize the rebalancing of the domestic economy, a study shows.

Market-driven brands — mostly those of private companies — in the top 50 of the rankings enjoyed value growth of 27 percent, compared with 9 percent for State-owned enterprises, according to the study, 2014 WPP BrandZ™ Top 100 Most Valuable Chinese Brands, conducted by WPP and Millward Brown. The study's findings were released on Tuesday.

Despite the bonds between Chinese consumers and local brands on the basis of price and "fame", foreign brands are stronger in terms of difference — a key ingredient in a strong brand, which stimulates consumer loyalty and value growth, the study shows.

The trend of Chinese brands going global continues. The research also found that global consumers are more likely to purchase Chinese brands in the computer, technology or home appliance categories.

Chinese brands that get the highest proportion of their revenue from overseas markets are Lenovo, Air China and China Eastern Airlines.

A year-on-year comparison of the top 50 shows an increase in total value of 13 percent in 2014 compared to last year, when it dropped 1.6 percent.

China Mobile continues to be the nation's most valuable brand, maintaining the No 1 spot for the fourth year with a value of $61.4 billion, up 21 percent on 2013.

Technology, last year's highest growing category, continues to rise in brand value, with value increasing 28 percent. Tencent rose two positions to No 3 after boosting its value by 68 percent.

Brand value increased in 11 categories, including technology, financial institutions, airlines, oil and gas, and insurance.

But the beverage category declined 6 percent in value overall as alcohol and wine brands felt the impact of the reduction in government spending on entertaining, and faced fierce competition from foreign brands.

Newcomers in the top 50 brands, include China Minsheng Bank, Vanke, Poly Real Estate, Evergrande Real Estate and Country Garden, PICC and New China Life, Yanghe and Lu Zhou Lao Jiao, Belle, NetEase. BYD (cars) made a comeback at 49 having dropped out of last year's rankings.

Of the top risers, healthcare brand CR Sanjiu is the joint biggest riser with a brand value increase of 86 percent, driven in part by Chinese consumers' growing attention to personal wellbeing.

The third-highest riser, Yunnan Baiyao, which is up 72 percent, also benefited from this trend.

Dairy brand Yili grew 86 percent, making it the other top riser in the rankings and China's 15th most valuable brand, due in part to rebuilding consumer trust with its "open factory" campaign, which allowed the public and the media to see the production process.

Mengniu turned a 31 percent decrease in 2013 into a rise of 30 percent in this year's rankings with the same strategy. Tencent was the fourth top riser with value growth of 68 percent, followed by Shuanghui, up 60 percent.

Bucking the trend in the alcohol category, beer brands such as Tsingtao, Snow and Harbin, achieved double-digit value growth thanks to creative interactions with consumers.

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