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The Value of China’s Top Brands Triples in Five Years

10 March 2017
This article is more than 4 years old.

· Major study reveals China’s 100 most valuable brands

· Total brand value of the top 100 has more than tripled in five years to $823bn

· Study suggests President Xi’s desire for world-renowned Chinese brands is being fulfilled

Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. Brands are first evaluated to determine their power / strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation) and given a corresponding letter grade up to AAA+. Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into perpetuity to determine the brand’s value. China’s 100 most valuable brands are ranked and included in the Brand Finance China 100 2017.

In August 2014, President Xi declared that, “We should have our own flagship products and establish our own world-renowned brands.” President Xi presciently saw that the future of China’s industry had to lie beyond manufacturing and that focus had to move from the promotion of ‘Made in China’ to ‘Branded in China’. His grasp of the importance of brands is paying dividends. The value of China’s 100 most valuable brands has more than trebled in the last five years from US$266 billion in 2012 to US$823 billion today.

ICBC is China’s most valuable brand. Its brand value has grown 32% year on year to a total of US$47.8 billion, constituting 20% of its US$239 billion market capitalization (at our valuation date). Its growth has been so strong that it has overtaken Wells Fargo to become the world’s most valuable banking brand. It is one of an increasing number of Chinese brands that rank highly in Brand Finance’s international league tables, including CSCEC, Moutai and Huawei, which are all the most valuable brands in their respective industries.

Alibaba is China’s most valuable tech brand. Its BSI score is 3.3% up from 2016, and its Brand Value has nearly doubled. Valued at over $34.8 billion, the online marketplace continues to thrive at home, but in order to accelerate growth abroad, it is investing in marketing communications including joining McDonald’s, Coca-Cola and Visa as a major sponsor of the Olympics Games.

China’s brands have a number of common attributes that help to explain these impressive results. The first is scale; China’s vast population and the growing prosperity of its citizens create a huge market for its major brands. Relative to other parts of the world, China’s economy is growing rapidly, expanding both organically and through a strong demand for foreign acquisitions. M&A activity of Chinese firms abroad has significantly accelerated in the last two years, hitting a record high in 2016 with such notable takeovers as ChemChina’s acquisition of Syngenta or Haier Group’s of GE’s home appliance division.

Cultural factors are just as significant as macroeconomic ones. Chinese consumers have a relationship with their brands that Western brands can only dream of. Information from Brand Finance’s Brand Strength Index reveals far higher levels of trust and loyalty for Chinese brands than European or American ones. Patriotism is a further boon. Bureaucracy and other factors can make operating in China challenging for foreign brands, but even taking this into account, Chinese consumers are particularly likely to choose domestic brands at the expense of foreign ones. The success of Huawei and other domestic smartphone manufacturers (to the detriment of Apple) bears this out.

ENDS

Note to Editors

You can find more stories about China’s most valuable brands in the Brand Finance China 100 report document. Brand values on Brand Finance’s website are reported in USD. For conversions to CNY, please hover over the ‘I’ button and select CNY from the grid that appears.

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Konrad Jagodzinski
Konrad Jagodzinski
Communications Director
Brand Finance
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Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
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