Tencent tops tech-heavy BrandZ China ranking

The annual BrandZ Top 100 Most Valuable Chinese Brands is a window into China’s pivot into a consumer-led economy with brands providing products and services for the urban middle classes charting the most impressive performance.

Education and travel agencies were the fastest growing sectors with an increase of 46 percent in brand value; although tech and retail had higher increases in dollar terms with a growth of 16 percent to $163.7 billion and 22 percent to $74.2 billion, respectively. Technology powerhouse Tencent again tops the list with a 29 percent growth in brand value to $106 billion.

Here are the key highlights from the report:

Brands are going premium

Travel agency brand Caissa which serves a niche market of travellers seeking a refined travel experience, entered the ranking at No. 79. The report mentions that many brands are focussing on 'premiumisation'—the desire for new, more distinct products and services—to attract the wealthier middle-class consumers.

Tech leading the way

The popularity of WeChat strengthens Tencent’s stronghold at the No. 1 position. The initiative by Sina (61) in live video and self-broadcasting through its Weibo platform is rewarded by a 43 percent rise in brand value to $900 milion. Maker of online and mobile games cum major email service provider NetEase is another strong performer, with 36 percent increase in brand value to $2.6 billion.

Back to school

Education brands Xueersi (77) and New Oriental (46) led brand value growth at 58 percent and 43 percent, respectively. As providers of afterschool coaching and English language tutoring, both brands serve the national interest to prepare the Chinese citizens for success in the global economy, the report said.

Alcohol, food and dairy brands looking good

Increased marketing effort by alcohol, food and dairy brands to make up for the loss in sales after the curb on entravagant spending during official functions by the Chinese authority solidified the brands’ standing among a wider audience. Alcohol brand Moutai entered the top 10 for the first time at No. 9 with an increase of 41 percent in brand value. 

Chinese brands looking outward

Global perceptions of Chinese brands are shifting following acquisition efforts by Chinese players, such as travel e-commerce Ctrip's purchase of Skyscanner. In addition, many top Chinese technology brands derived a significant proportion of their revenues from sales abraod. The three tech brands in the ranking that generate the highest proportion of their revenue from overseas are Lenovo (72 percent), Huawei (58 percent) and ZTE (47 percent). 

Meanwhile, Chinese brands exceeded multinationals in brand power for the first time. Brand power is the metric of brand equity for the ranking, which indicates consumer inclination to choose one brand over another. 

Speaking on the strong showing of Chinese brands against MNCs, Deepender Rana, CEO, Greater China at Kantar Insights, said: "We expect this trend to accelerate in future years as Chinese companies realise they need to build differentiated brands to command a premium in a competitive market, where penetration-led growth is plateauing off in many categories.

Doreen Wang, global head of BrandZ, said young consumers are increasingly positive towards Chinese brands, and a growing number of entpreneurial Chinese brands are starting overseas before they make waves in their home market.

"Chinese brands are taking the leap and going global on the back of three key factors; the country’s rising international stature, pressure to find alternative sources of growth as the domestic market slows and increasing overseas consumer receptivity to Chinese brands," said Wang. DJI, Anker, Elex and Ninebot are among the digital brands that enjoy notable success overseas.