The Brand Finance China 100, released today, is an annual study conducted by leading brand valuation and strategy consultancy Brand Finance. Hong Kong and China’s biggest brands are put to the test and evaluated to determine which are the 100 most valuable.
Alibaba is this year’s highest new entry. Anticipation is mounting ahead of the company’s IPO, set to be the most valuable ever seen. The Alibaba brand, which brand finance has valued at $6 billion, will be a crucial motivating factor for investors. The brand underpins the company’s revenue stream (over $2 billion last year) and is poised to grow further. The IPO will not only provide a huge boost to consumer recognition of Alibaba internationally, and the involvement of international investors will hugely increase the breadth of stakeholders intent on building the brand.
The positions of the top five are unchanged from last year. China Mobile remains the most valuable brand, with a brand value of $31.8 billion, up from $23.3 billion last year. ICBC is second with a brand value of $22.8 billion, followed by fellow banks China Construction Bank ($19 billion) in third, Agricultural Bank of China ($17.8 billion) in fourth and Bank of China ($16.7 billion) in fifth.
PetroChina is in sixth placed having performed particularly well relative to international competitors. The brand value of most oil and gas companies has fallen or remained static this year, however PetroChina’s brand is worth $16.5 billion, a 27% increase on last year.
Other notable brands covered in Brand Finance’s study include Huawei, which has increased its brand value by 58% to reach a total of $8.7 billion. Though Huawei has faced regulatory hurdles in some western territories, the company and the brand in particular are growing rapidly. Huawei has just signed a two year global sponsorship deal with Arsenal FC that will brand equity particularly in the UK, but also in the many markets globally where Premier and champions league football are popular.
Moutai is another brand that appears to be mitigating the impact of government action. A clampdown on extravagant spending and corruption has proved a major challenge for all Baiju manufacturers. Kweichow Moutai has suffered reduced growth, however by cutting the price of its premium line in half and introducing more mid-price alternatives, it has defied analyst expectation to post 13.7% profit growth. Brand Value now stands at $4.2 billion.
The total brand value of China’s top 100 brands is now $426 billion, up from $321 billion in 2013. This is not merely a reflection of the growing scale of Chinese companies however. The Brand Value to Enterprise Value ratio (BV/EV) shows the proportion of a company’s value accounted for by the brand. It therefore acts as a rough guide of how well developed the brand is and how effectively companies are managing their intangible assets. The average for China’s top 100 brands is now 13.9% up from 10.6% last year and 7.6% in 2010. The average Brand Value to Enterprise Value for the world’s top 500 brands is (covered in Brand Finance Global 500 study) 16.3%, indicating that Chinese brands are rapidly on course to match the world’s best.
Commenting on the results, Brand Finance Chief Executive David Haigh stated, “Chinese brands are clearly developing rapidly. China was once known as the world’s great manufacturer, producing goods for brands owned elsewhere. The results of Brand Finance’s latest table show that China is more than capable of producing not just tangible assets, but hugely valuable intangible assets as well." Mr Haigh will be in Beijing on the 25th and 26th Spetember, leading the UK delegation at the international committee meeting to set the ISO 10668 standard on brand valuation.