China Mobile Ranks Among World's Top Brands

Telecom Giant in Fourth Place Behind Microsoft and GE

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[beijing] The world's top global brands are Microsoft, General Electric, Coca-Cola and China Mobile Communications.

China Mobile? Yes. According to the Brand Z Top 100 survey of global brands from WPP Group's Millward Brown Optimor research unit, the state-owned Chinese company falls into fourth place, with $39 billion in brand value.

That's despite the fact that the telecommunications giant does not sell services outside its home country and has not shown a strong aptitude for marketing. Even within China, its name doesn't even crop up with Lenovo and Heier in debate over which mainland companies will be the first to create true global brands.

China Mobile's ranking came as a surprise even to Zhang Yixin, Millward Brown Optimor's Beijing-based Asia/Pacific director. "When we saw the results, we double- and triple-checked everything to make sure we hadn't made a mistake," she said. "China Mobile was probably surprised as well."

In addition to assessing brand values, the survey took into account each brand's effectiveness in driving business earnings and an index of expected near-term brand growth, said Ms. Zhang. China Mobile qualified even though its sales are in a single country-unusual for a global brand. Its size is partly due to lack of competition.

"China Mobile achieved its position [in our survey] by having the biggest subscriber base compared to any other mobile company in the world, but the potential of this market is five times what they have achieved to now," said Ms. Zhang. Even if China's telecom market is opened to foreign competition, China Mobile has a "significant advantage in terms of infrastructure, services and content that would be extremely difficult for foreign competitors who are not Chinese-speaking to manage."

"They're in a hot industry with a lot of scale," said telecom consultant David Wolf, CEO of Wolf Group Asia in Beijing. "If we went strictly by an international standard of marketing here, we'd be hard on them, but they're doing a good job for this category by local standards."

China Mobile certainly has size on it side. With 255 million subscribers at the end of February 2006, the company is the No. 1 mobile phone service provider in the world's largest mobile phone market, in terms of total subscriber numbers. Even so, less than one-third of Chinese are mobile phone users.

Spun off from China Telecom in 2000, the company caters to the country's diverse demographics with a wide range of products such as M-zone, a youth-oriented service with a rebellious image and lots of games; Go Tone, an upscale service for business people; and Shenzhouxing, a pre-paid service developed with China Merchants Bank.

Its strength comes from "a good background, solid infrastructure, and being part of a hot category," said Viveca Chan, Hong Kong-based chairman of WE Worldwide Partners, an independent Chinese agency network. China Mobile "has also done a good job leveraging sub-brands with value-added services to develop customer loyalty and create revenue, helping it develop from a phone company to a lifestyle brand."

For example, business travelers using Go Tone can gain access to lounges in domestic airports. M-zone, meanwhile, has teamed up with outside partners like the National Basketball Association and MTV for co-sponsored contest promotions.

China Mobile's only real competitor, lackluster China Unicom, has 130 million subscribers who spend much less on lucrative value-added services like the SMS messages, games and ringtones that generate more than 20% of China Mobile's revenue. The company's customers send about 700 million short messages per day, according to Xinhua news agency, and sales from ringtone downloads topped $50 million last year.

"China Mobile isn't an 800-pound gorilla, they're an 8,000-pound gorilla here," said Richard Robinson, Beijing-based VP-international business development at Linktone, a China Mobile partner providing wireless interactive entertainment products and services to consumers in China.

To its credit, he added, "China Mobile has become more sophisticated in branding over the past year," but it pales in comparison to veteran marketers like Marlboro, IBM and Toyota, whose brands ranked below China Mobile in the BrandZ survey.

Brand consistency has been a struggle. The company is carved into two dozen divisions by province, each of which appoints its own agencies, usually local shops that handle small projects. Like many Chinese companies, China Mobile works through layers of teams with no centralized marketing director.

The company's latest effort to shake up its image is the appointment of Optimor's WPP sibling, Grey Global Group in Beijing, to handle its national corporate branding account earlier this month.
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