China Mobile Tops BrandZ's Ranking, But Web Companies Are Fastest-Growing

83% of Consumers Outside the Country Aren't Familiar With Any Chinese Brand

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Telecom giant China Mobile secures the top spot once again, and internet darling Sina leads the pack in value growth, according to the BrandZ Top 50 Most Valuable Chinese Brands for 2012.

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But Chinese brands continue to be little known beyond the country, with 83% of people outside China can't name any of its brands, according to WPP Group research firm Millward Brown, which started the annual ranking last year. Among those who can, computer maker Lenovo (No. 23) and some beer brands are most often cited.

"This is a fundamental challenge that Chinese brands face," said Doreen Wang, Millward Brown group account director. "There's a lot of homework Chinese brands need to do to be known abroad."

But local companies are developing clout at home, despite the nascent state of their brand-building.

"What we're seeing here is a wake-up call to foreign brands in China," said David Roth, CEO-Europe and Asia at The Store, WPP's global retail practice. "Chinese brands are on the move. It's not going to happen overnight ... but we're beginning to see it in terms of the Chinese understanding and using the magic of branding."

China Mobile, which has nearly 640 million subscribers, again led the BrandZ list with a brand value of $53.6 billion. Banks filled out the top five: Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agricultural Bank of China.

Such state-controlled companies are well-represented on the list , but web companies are among the most dynamic. Sina jumped 15 spots, to No. 25, largely on the popularity of its Weibo microblog service. Just two years after it was launched, Weibo has 250 million users, who post about 86 million messages a day. Sina's brand value is estimated at $1.9 billion.

"If one year ago you asked Chinese consumers about Sina's image, 90% would have said it's a big portal [we visit] to look at news reports," said Ms. Wang. "But one year later ... most young consumers would say Sina provides a good platform to share information."

Other internet companies included in the rankings are search engine Baidu (up three spots, to No. 6) and portals Tencent (No. 10). Making their debuts in the BrandZ rankings are social-networking site Renren (No. 35), travel site Ctrip (No. 40) and portal Sohu (No. 49).

Chinese brands have edged out foreign competition in some categories. For dairy products, Nestle and Danone recently closed factories in China and are revamping their strategies as local brands Mengniu (No. 18) and Yili (No. 22 ) dominate product categories such as milk, ice cream and yogurt.

Both those companies are less than 15 years old and have the advantage of growing up with Chinese consumers, whose tastes and needs are changing as income levels rise, said Mickey Chak, chief planning officer for Ogilvy & Mather China.

Yili and Mengniu sell fruit-flavored milk for kids, enriched "breakfast milk" for office workers and "bedtime" milk with extra nutrients. Common ice cream flavors include peach, sweet corn and red date.

"They're really too big now for anyone to challenge them," Mr. Chak said.

Though food and beverage companies are a basic part of consumers' daily lives, China's dismal product safety record makes trust a serious issue.

"This is a period of zero tolerance, and this is where we need to be humble and modest and find a better way to communicate and interact with our consumers," said Huang Yuanlin, general manager of Mengniu's brand management center. "Sometimes, because of a very small incident, a brand that has been very carefully built up is destroyed overnight. That is what we need to be careful of ."

The BrandZ rankings include mainland China companies owned by a publicly traded enterprise. They are based on published financial data and surveys of more than 35,000 Chinese consumers.

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