BEIJING (AdAgeChina.com) -- China Mobile, the country's dominant mobile phone carrier with more than 500 million subscribers, is the most valuable Chinese brand.
China Mobile Is the Mainland's No. 1 Brand
The telecom is closely followed by the nation's top four banks--Industrial and Commercial Bank of China (No. 2), Bank of China (No. 3), China Construction Bank (No. 4), and Agricultural Bank of China (No. 6), according to Millward Brown's inaugural BrandZ Top 50 Most Valuable Chinese Brands survey released this week in Beijing.
Commissioned by WPP, the study used financial data and consumer opinions on brands to arrive at a dollar value. The views of more than 35,000 Chinese consumers are included in the BrandZ database, and financial and market information is from Bloomberg and DataMonitor.
China Mobile's ad budget around $700
China Mobile's appearance at the top of the list doesn't surprise Beijing-based Adrian Gonzalez, head of Millward Brown's operation in Greater China. China Mobile has been included in the research agency's BrandZ Global Top 100 Most Valuable Brands survey for the past five years, he said, "and is a big investor in dollar terms, spends about $700 million per year."
The top 50 brands on the Chinese list span 19 categories, including banking, technology, retail, apparel, food and beverages. They represent a total value of $280 billion, equivalent to slightly more than 5% of the Chinese economy.
China's economy is now at a tipping point, he said. "Consumers have an increasing number of brands to choose from. If you take all 11 giants on our list, they spend about $2 billion per year in supporting their brands. State-owned enterprises are very active marketers.
Quality gap narrows between foreign and local
Even China's big state-owned enterprises, Mr. Gonzalez said, have demonstrated their ability to build strong domestic brands, "with a number of them earning a deep sense of loyalty and engagement among Chinese consumers. There used to be a big perception gap between foreign brands and local brands, in terms of quality, but tracking the data over the past four years, we find that gap is closing."
For instance, two brands on the list--Fulinmen cooking oil (No. 49) and Great Wall wine (No. 50)--are produced by COFCO, the largest oils and food importer and exporter in China and a leading food manufacturer.
"This is a company with state connections but it's talking from the CEO down about controlling the whole process, from the farm gate to the dinner plate, to control the quality and earn the trust of consumers," Mr. Gonzalez said.
Technology brands like Tencent, China's largest and most used internet portal, and online search leader Baidu, rank highly at No. 8 and 9, respectively.
Millward Brown has designated some of the companies ranked as giants, innovators and image builders.
State-owned enterprises dominate the top 50 ranking, benefiting from strong government support, fewer competitors, and a growing commitment to brand building.
Some state-owned companies, such as China Mobile, have taken advantage of favorable market conditions to adopt sophisticated brand strategies and market segmentation. That should help them face greater competition in the future.
Innovator brands like Tencent and Baidu have developed great products. Other innovative brands are China Merchants Bank (No. 11), which has invested heavily in branding and rolling out new customer offerings; domestic auto maker BYD (No. 19), known for its electric car and green technology; and Haier Group (No. 29), recognized for energy-efficient products and consistent branding.
The image builders
Package goods, beverage and retail brands operate in crowded categories where brand building is critical role. In this group, trust and product performance are key factors in successful branding. Wine and beer brands Changyu (No. 22), Tsingtao (No. 35) and Great Wall created strong brands. Sportswear and clothing brands also stand out, with Li Ning (No. 24), Meters/bonwe (No. 31), Anta (No. 43) and 361 Degrees (No. 44) ranking in the top 50.
One key metric in the brand value equation is brand contribution, the proportion of financial value that is driven purely by brand equity, revealing how well the brand connects with its customers. All three groups include brands with extremely high levels of brand contribution, particularly Baidu, Great Wall, Tsingtao and Tencent, Mr. Gonzalez said.