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NetEase is China’s Fastest Growing Brand

23 November 2016
This article is more than 4 years old.

· NetEase doubles brand value in a year, making it China’s fastest growing brand

· WeChat is also growing strongly, its value is up 90% to CNY 41.5 billion

· Huawei and Alibaba are also growing strongly, by 77% and 65% respectively

· China Mobile is China’s most valuable brand, worth CNY 319 billion

· China’s bank and insurance brands are also growing in value rapidly

· CCB is the world’s most powerful banking brand

Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test. They are evaluated to determine which are the most powerful and the most valuable by country, by industry and against all other brands worldwide. China’s most valuable brands can be found in the Brand Finance China 250.

NetEase is China’s fastest growing brand. NetEase has enjoyed massive success by developing hugely popular games such as the Westward Journey series as well as countless ecommerce and other internet tools. Games revenue topped CNY 18.5 billion in 2015 contributing to a profit of nearly CNY 7 billion. Shares have gained 20% this year and look set to grow further based on this encouraging news about its brand and consensus equity analyst forecasts.

WeChat is also growing strongly and is in the top 5 in terms of year on year growth. The user growth has remained consistently strong, adding 40-50 million new users a quarter since 2012 with the total now standing at around 850 million. As a result, advertising revenue is soaring; revenue for Q3 2016 is up 51% on the previous year at CNY 7.5 billion. WeChat has become the default communication method for the majority of people in China and is rapidly gaining ground across the world. Consumers’ relationship with WeChat is more profound than other brands. They see it throughout the day and it is the way that they engage with many other brands, their friends and family and the wider world. As such it commands almost unrivalled awareness and loyalty.

China Mobile, the world’s largest mobile operator by subscribers, is China’s most valuable brand. Its latest valuation of CNY 319 billion represents an 8% increase from last year’s value. Although the smartphone market and 4G coverage are approaching saturation, China Mobile’s increasing market share contributes towards its continued brand value growth.

On the hardware side of the telecoms sector, Huawei is making astonishing progress internationally. In 2015 it overtook Microsoft to become the world’s third largest manufacturer of smartphones and now has a 9% market share. After the success of the P9, the April 2017 launch of the P10 will be eagerly awaited and should contribute to further brand value growth. From 2015 to 2016, Huawei was up 77% to CNY 126 billion, making it one of China’s top 10 most valuable brands.

Chinese bank brands have been performing well for a number of years, however this year has seen particularly strong growth. China now accounts for 28% of global bank brand value while China Construction Bank has become the world’s most powerful banking brand. Alex Corringham, Consultant at Brand Finance comments, “Chinese banks are moving beyond provision of basic banking services and are investing in their brands, they are performing well on customer brand equity measures such as familiarity, consideration, preference, satisfaction and recommendation, leading to some of the highest scores in Brand Finance’s Brand Strength Index.”

The slight slowdown in the economy has had affected brands differently. Demand for luxury goods has been reduced, negatively affecting Chow Tai Fook, its brand value dropped 12% to CNY 23.7 billion. On the other hand ecommerce giant Alibaba saw its brand value grow 65% to CNY 115 billion. Jack Ma, founder of Alibaba commented, “As the economy goes down, people look online to Alibaba to buy cheaper things.”

Brand Finance CEO David Haigh comments, “China is already a long way down the road towards achieving successful Nation, Corporate and Product brands. There seems little doubt that President Xi Jinping is strengthening both the China Nation Brand and individual commercial brands, enabling China to compete globally on a level playing field with US and EU brands”.

ENDS

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Konrad Jagodzinski
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