China saw more brand value growth over the past decade than any other country in the world, according to the latest Brand Finance China 500 2020 report. The country’s impressive portfolio of high-performing brands has claimed 9 spots among the top 10 brands with the largest increase in brand value over the last decade, leading to a whopping 1100% increase in the combined brand value of Chinese brands in the Brand Finance Global 500 ranking of the world’s most valuable brands – from US$111 billion in 2010 to US$1,334 billion in 2020. This is by far faster than brand value growth recorded by brands from any other country, with – for instance – the United States seeing a 177% and Japan a 94% increase, and nearly eight times faster than the overall growth of brand value within the Brand Finance Global 500 ranking – 143%.
At the same time, looking beyond the global landscape and directly at the domestic Brand Finance China 500 ranking, the value of China’s top 100 brands has increased by 751% over the past decade – from US$175 billion in 2010 to US$1,486 billion in 2020. The combined value of the top 500 Chinese brands stands at an even more impressive US$1,862 billion, up from US$1,810 billion last year. What is more, the number and value of Chinese brands offering products and services abroad has increased over the past year. Among the country’s top 500 brands included in the Brand Finance China 500 ranking, compared to 2019, 10 more brands can boast deriving at least 5% of their brand value from overseas operations, bringing the total to 177. Their combined brand value accounts for 27.6% of the total brand value in the ranking, up from 25.7% last year.
Alibaba.com is iconic of China’s growth over the last 10 years, boasting the largest increase in brand value globally – up by a staggering 4029% to US$18.8 billion, and claiming 22nd spot in the Brand Finance China 500 2020 ranking. Alibaba.com is the namesake of its parent company Alibaba Group, which is largely described as China’s answer to Amazon, and has become one of the most well-known brands in the world. The brand’s success is largely due to the competence of founder, Jack Ma, who was able to harness the potential of a huge untapped B2B e-commerce market, creating a platform for Chinese SMEs and entrepreneurs to sell to the global B2B market. Twenty years since its founding, Alibaba.com remains a platform player able to provide a trusted, seamless experience for buyers and sellers around the world to do business together. The rise in brand value of Alibaba.com is inherently tied into the success of the Alibaba brand at a group level, and the associated skyrocketing rise of its sub-brands Taobao and Tmall, now both ranking even higher – 13th and 15th respectively – than Alibaba.com itself.
Other Chinese tech brands also feature among the world’s top 10 fastest-growing, with NetEase seeing a spectacular 2995% growth over the past decade and Tencent (QQ) close behind with a 2310% increase. In the Brand Finance China 500 2020 ranking, the brands have claimed 30th and 10th positions respectively. With a formidable presence in the gaming industry, Tencent (QQ), continues to command the sector. QQ has focused on increasing its popularity with the younger generations through expanding its entertainment packages to mini games. Furthermore, since the COVID-19 outbreak, the brand’s School-plus-Home groups – which facilitates both online and offline education – have served a staggering 120 million users.
Chinese baijiu brands – namely, Moutai (up 3460% to US$39.3 billion), Wuliangye (up 1634% to US$20.9 billion), Luzhou Laojiao (up 1460% to US$5.6 billion), and Yanghe (up 1283% to US$7.7 billion) – have also performed exceptionally over the last 10 years, boosting China’s overall brand growth. The spirits market in China is flourishing as disposable income and living standards continue to rise across the nation. Consumers are now turning towards top quality and middle- to high-end premium baijiu brands. In this year’s Brand Finance Spirits 50 ranking of the industry’s most valuable brands, Chinese spirits’ brand values increased by 14% on average, while non-Chinese spirits brands decreased by 0.1% on average.
In particular, Moutai and Wuliangye have seen impressive growth over the past year, up 29% and 30% respectively. Rising to 11th spot in the Brand Finance China 500 2020 ranking, Moutai continues to dominate as the biggest player in the Chinese baijiu market and has focused on expanding its footprint and presence globally, with international sales reaching a record US$369 million last year. Wuliangye has also benefited from a particularly strong financial performance last year, doubling in enterprise value following a boom in the stock market. The brand has recently signed a strategic partnership with Pernod Ricard to support both companies’ goal of accelerated development within the Chinese and wider Asian markets. Furthermore, Wuliangye has opened marketing centres in Asia-Pacific, Europe, and America, to promote the brand internationally.
Valuable brands are the foundation of a successful modern economy, and China’s conscious effort to develop and grow both domestic and international brands, will undoubtedly help the country through the COVID-19 pandemic and the economic fallout that will follow. We are likely to see a drop in brand value of at least US$1 trillion across the globe next year, but the headway made by Chinese businesses over the past decade will certainly cushion what could otherwise have been a heavy blow.
David Haigh CEO, Brand Finance
Looking at the country’s most valuable brands, ICBC retains the top position in the Brand Finance China 500 2020 ranking with its brand value reaching US$80.8 billion. It is also the world’s most valuable banking brand. The year-on-year increase of 1% is nonetheless very modest compared to the brand’s average growth rate of 23% over the past decade. Nevertheless, ICBC is China’s biggest lender; the bank has reduced non-performing loans to less than 1.5% and enjoys the loyalty of well over 600 million customers. ICBC also continues to explore new business opportunities, growing in both investment banking and asset management. The bank is also involved in joint ventures with overseas partners and has embarked on blockchain-oriented initiatives.
China’s banks have been affected by the now-curtailed trade war with the US and there have been concerns about big lenders being forced to relax their underwriting policies to stimulate the country’s economy, however, banking remains the country’s most valuable sector. With 79 brands in the Brand Finance China 500 2020 ranking, the banking industry accounts for 23% of the total brand value in the country. Alongside ICBC, three other banking brands appear in the national top 10, although China Construction Bank (4th, US$62.6 billion), Agricultural Bank of China (6th, US$54.7 billion), and Bank of China (8th, US$50.6 billion) all saw a dip in brand value this year.
Taking advantage of the drop in China Construction Bank’s brand value, Ping An has jumped up to 2nd position in the Brand Finance China 500 2020 ranking, having recorded an impressive 20% brand value growth to US$69.0 billion, extending its lead further as the world’s most valuable insurance brand. The brand’s commitment to expanding its portfolio and offering in the non-insurance and digital disruption space is truly setting it apart from its peers. Most notably, the brand’s foray into health technology through its Good Doctor service has propelled Ping An even further into a league of its own within the insurance sector. With a staggering 315 million registered users and nearly 70 million monthly active users, as at the end of 2019, it has become the largest mobile medical app in China in terms of coverage. Despite COVID-19 impacting Ping An’s life insurance business, the sheer boom in registrations for Good Doctor should offset this loss.
Four other insurance brands feature in the top 50: China Life (16th, down 4% to US$25.5 billion); AIA (23rd, up 17% to US$18.2 billion); CPIC (26th, up 31% to US$14.0 billion), and PICC (37th, up 20% to US$11.0 billion). With the next insurance brand in the ranking only half the size of PICC, there is a distinctive gap between the ‘Leading 5’ Chinese insurance brands and their counterparts further down the league table. Competition between the top 5 remains fierce and it is unlikely that smaller Chinese brands will be able to compete with them in the near future.
With a brand value growth of 31% to US$14.0 billion, CPIC is the fastest growing among the ‘Leading 5’. With no dramatic increase in marketing spend, CPIC has smartly invested in its sponsorship programme of the Chinese women’s volleyball team which has boosted the awareness and trustworthiness of the brand. CPIC is currently in the implementation phase of its new CPIC Service, where the company will combine its brand management system with products and services, with the aim of providing a unique customer experience. This move should build CPIC’s brand recognition as well as nurture customer loyalty. The insurer will be looking to continue providing great service to support its brand and business growth as it builds up to its 30th anniversary in 2021.
Despite many success stories, there are also sectors suffering from a slowdown. All but one telecom brands in the Brand Finance China 500 2020 ranking have dropped down the ranking, with the most valuable among them, China Mobile falling from 5th to 9th this year. Big telcos are being squeezed from all sides as OTT messaging apps are impacting voice and SMS revenue, and challenger brands offer comparable data services at below-market rates, leading to fierce price competition and decreasing margins. Despite a drop by 12% to US$49.0 billion, China Mobile has been powering ahead with its 5G+ Plan, which focuses on its four main growth engines: customer, home, business, and new markets. Having been granted its 5G license in June 2019, the brand has accelerated the process through a launch across 50 cities, assimilating emerging technologies such as AI, IoT, and cloud computing, and developing ever-more critical capabilities. Against the backdrop of the COVID-19 outbreak, China Mobile – alongside other telecom brands – must now seize upon the opportunities from businesses and customers working from home and requiring more digital and cloud-based services.
Clearly the next big opportunity for the telecom industry, the 5G space is inviting fierce competition, with infrastructure and handset brand Huawei expanding into markets traditionally covered by Western providers. Despite sparking controversy, the Chinese giant is making clear headway, and with a brand value of US$65.1 billion, it is the 3rd most valuable brand in China and counts among the world’s top 10 most valuable brands for the first time.
President Xi Jinping’s Belt and Road Initiative has successfully propelled Chinese engineering and construction brands onto the global stage and has been the main impetus for their solid performances in the Brand Finance rankings. These brands’ resilience and strength have been put to the ultimate test, however, as COVID-19 engulfs not only the Chinese but global economy. With life making a slow return to normal across the nation, these brands will hope to bounce back, minimising risk to their brand values in the coming year.
Scott Chen Managing Director, Brand Finance China
The largest utility brand in the world, State Grid has climbed to 5th position in the Brand Finance China 500 2020 ranking, recording solid brand value growth, up 11% to US$57.0 billion. Supplying power to over 1.1 billion people and covering 88% of Chinese national territory, the brand is increasing its focus on CSR initiatives, through funding charities and committing to poverty alleviation. State Grid has also supported China’s push to become a greener, more environmentally friendly nation, with a clear target to be the advocate and leader of Ubiquitous Electric Internet of Things.
In the engineering and construction sector, China State Construction Engineering Corporation (CSCEC) has overtaken America’s General Electric to become the industry’s most valuable brand, despite recording a 3% drop in brand value to US$24.8 billion. It ranks 17th in the Brand Finance China 500 2020 ranking.
Another engineering and construction brand, POWERCHINA is the most valuable new entrant to the Brand Finance China 500 2020 ranking, claiming 49th spot in the national classification. As one of China’s biggest multinationals, POWERCHINA has established itself as a leading enterprise in the hydropower industry both on home soil and internationally. Furthermore, the brand has benefited from the Belt and Road Initiative, which has not only allowed POWERCHINA to increase its international exposure – one third of its business is currently from overseas – but to win numerous projects by sharing advanced technologies.
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Along with the level of revenues, brand strength is a crucial driver of brand value.
According to these criteria, WeChat has claimed the title of China’s strongest brand, thanks to the elite AAA+ brand strength rating and a corresponding BSI score of 92.9 of out 100. With over one billion monthly users, the app has positioned itself as essential for everyday communication in China. WeChat has significantly broadened its proposition since its inception, successfully leveraging its brand to develop an extraordinary level of vertical product integration. With WeChat Pay now being accepted in more than 60 countries and the platform opening to international travellers in China for the first time, the brand has set its sights on global markets. As WeChat’s brand strength has flourished so has its brand value, increasing 7% year on year to US$54.1 billion.