About Interbrand Interbrand began in 1974 when the world still thought of brands as just another word for logo. We have changed the dialogue, redefined the meaning of brand management, and continue to lead the debate on understanding brands as valuable business assets. We now have more than 40 offices and are the world’s largest brand consultancy. Our practice brings together a diverse range of insightful right-and-left brain thinkers making our business both rigorously analytical and highly creative. Our work creates and manages brand value for clients by making the brand central to the business’ strategic goals. Our services include brand analytics, brand valuation, strategy naming and verbal identity, corporate identity, packaging design, retail design, integrated brand communications and digital branding tools.
About Brand Valuation We pioneered the techique for valuing brands in 1984 and have continued to improve upon our methodology and set the pace for other approaches. Our valuation techniques have long been recognized by business, academics, and regulatory bodies as uniquely valuable strategic tools. Today, we have conducted over 5,000 valuations for clients to provide guidance in managing their most valuable asset - their brand. Voted one of the three most influential benchmark studies by business leaders, Best Global Brands is our annual report published on the world’s most valuable brands since 1999. It offers our insights into how these global organizations create and manage brand value.
Interbrand Best China Brands 2011
Contents Best China Brands 2011:From Best-in-Class to World Class Jez Frampton
Group Chief Executive Officer
Make your brand work harder for you Thomas Chen
Executive Director of Strategy, China
How do we value Best China Brands? Interbrand’s method for valuing brands
2011 Best China Brands The profiles of the top 50 China brands
When growth slows down Eric Shao
Associate Director, Strategy, China
Industry Insights Financial Services, Real Estate,Energy, Apparel, Automotive, FMCG
How to improve brand strength: BBS Index Introduction & Comments
Contributors and Contact
Interbrand Best China Brands 2011
Best China Brands 2011:
From Best-in-Class to World Class
We are pleased to present our fourth annual ranking of the Best China Brands. While not immune from the current ebbs and flows of the world economy, China continues to represent an engine of opportunity for regional and global growth. The scale of development is dramatic: China now possesses the largest internet population, mobile phone market, luxury market as well as the largest automotive market in the world, just to name a few. Indeed, for many global brands, China is THE long-term growth market, attracting huge direct investments with the promise of very healthy returns to corporate earnings. At the center of this sea of opportunity is the Chinese consumer, the majority of which are economically empowered with all the tools of the digital age. The “good life” in the major cities is now flowing towards second and third tier cities, whose consumers are eager to find outlets for their new-found wealth. However, the story of China is about more than just the overflowing Chinese consumer’s wallet. It is also about increasingly sophisticated Chinese brands leveraging world-class business practices to create and expand into new markets at home and in some cases, overseas. These brands are developing new products, trailblazing new distribution channels, and defining new equations of value. A study of this year’s Best Chinese Brands list confirms many of these powerful trends. The minimum brand value required to make our list this year increased by 18 percent to 1.36 billion RMB. And the ratio between the value of the top and bottom brands is narrowing, from 176:1 in 2010 to 154:1 in 2011, reflecting a more competitive domestic market less dominated by a handful of state-protected industries. Financial services and telecommunications still dominate the top of the list, but mid-size competitive brands are the ones delivering the highest growth in brand value. Internet brands are being rewarded for their exceptional market flexibility and local innovation, and both apparel and electronics brands are proving resilient as they stretch their relevance into adjacent categories. These are the early signs of emerging blue-chip companies, leveraging their brands to seek growth through innovation and product/service excellence. Of course, on the minds of many observers is a key question: When will Chinese brands compete on the global stage? Many of the Best China Brands are still consolidating strength in their vast home market, learning and adapting, and preparing themselves for the next wave of development. But at the current pace, it won’t be too long before we are talking about the Best China Global brands. This year’s study, without a doubt, already reveals a few contenders.
Best regards,
Jez Frampton Group Chief Executive Officer Interbrand
Make your brand work harder for you Thomas Chen
Executive Director of Strategy, China
As the world’s economy still struggles to get back on its feet in the aftermath of the financial tsunami, many Chinese companies continue to enjoy substantial growth in China. Driven by favorable government policies and steady domestic consumption expansion, most of the 2011 Best China Brands have achieved new financial records over the past year. Total profits of the top 50 of the 2011 Best China Brands increased 27% from the same period last year. Among them, we have not only seen exponential growth from booming companies in the internet sector, but also robust double-digit growth from gigantic financial institutions. Upon closer inspection of our ranking, you may notice that many companies listed in 2011 Best China Brands are also named in Fortune 500 because of their enormous business size, such as China Mobile, ICBC, CCB, …etc. While many of them have global scale, their brand values, however, are significantly trailing behind their global counterparts. That is mainly due to the fact that most Chinese brands are not yet working as hard as global brands for their owners.
Enhancing the role of brand in your business Global brands work harder for their owners because these companies put “brand” closer
to or in the center of their business, and it is better synchronized with their business strategy. Coca-Cola is indeed an extreme case, which considers themselves as a brand company rather than a soft drink manufacturer. Most established Chinese companies, on the other hand, are either manufacturing or sales-driven. They still view branding as a part of their marketing communications function. As a result, it is much easier for global brands to mobilize their internal resources to fulfill their promises for customer satisfaction; this nurtures brand loyalty and builds a price premium over time. On the contrary, most Chinese companies are struggling to deliver their brand promises consistently, so it inevitably results in customer dissatisfaction. In fact, most Chinese companies hesitate to employ a brand-oriented management philosophy for a reason. Branding has never been a part of their success story ever since China opened up its market to the world 30 years ago. Most Chinese companies manage to thrive by following a similar success formula: opportunity identification, price war, sales network, and resource acquisition. Therefore, even though they acknowledge that branding is essential to success in the market, it is hard for them to change their management mindset overnight, not to mention that it takes management’s full commitment and significant resources to transform a
company into a brand-oriented organization. Of course, there are Chinese companies succeeding in a different path by being more Marketing-oriented. Yet, they still see branding as a part of marketing communications, and overly emphasize awareness building or instant returns on investment.
Brands create value for you and your customers Brands create value that is not just reflected in financial statements, but also in daily operations. Brands are indeed a living asset of a company which either propel business growth or die with it. Therefore, we must proactively manage this valuable asset and make sure it is running at its highest productivity – in other words, brands must drive market demand for their products on the one hand, and help their company charge a premium price for better profits on the other. Driving market demand is the basic function that a brand must render to its owner. This function becomes particularly critical today because most, if not all, companies are facing “red ocean” competition – an oversupplied market with excessive choices. In addition, escalating production costs and diminishing returns on price wars are also forcing Chinese companies to rethink the importance of branding in their new success strategies.
To build a strong brand with pull force for the company’s products and services in the market, top management must shift their mind set from “inside-out thinking” to “outside-in thinking”. “Inside-out thinking,” which is popular among Chinese companies, tends to focus on "Who I am " and "What I want to do". It is not uncommon to see Chinese companies state its brand mission as “be China’s #1, respected and world’s renowned brand.” While this type of brand mission may faithfully reflect the true ambition of top management, it is totally irrelevant to consumers. Hence, “inside-out thinking”brands are often viewed by consumers as a hard sell or propaganda tool. This does not generate much pull force in the market. “Outside-in thinking” brands can better drive market demand. They care about their customers, not just about themselves, and they tell the market “why my existence is good for you” and “what I can do for you”. For instance, Steve Jobs started Apple with the belief that human beings are the masters of machines, so it is machines that need to learn how to communicate with people, not the other way around. This apparently provided a compelling reason to justify Apple’s very existence in an IBM dominated era and since then, they have been attracting millions of fans. Today, Apple is the world’s richest company with, at one point, more cash than the U.S.
government. Yet again, all the glamour of the Apple brand comes from Mr. Jobs’ “outside-in thinking” belief, not a selfish business ambition. Without this vision, the world would not have those user-centric, experience-rich, world-changing inventions such as iPod, iPhone, and iPad. In addition to driving market demand, brands also create value by enhancing the brand owner’s ability to charge premium prices for their products and services. This is indeed an advanced function of a brand. To do so, brands must add intangible value on top of their tangible products and services. This has evolved from simply “a peace of mind” and “quality guarantee” in the past, to an inspiring “social meaning.” A successful brand, that increases product and service value, must be able to help its customers express “who I am” or articulate “what I believe” to others. Most Chinese brands, however, still emphasize the threshold value: “peace of mind” or “quality guarantee”. Only a few have attempted to create brands with inspiring social meaning, but many have not yet succeeded because of the inconsistent brand experience: these attempts mostly end with words; they don’t live up to what they say. They need to further improve their authenticity.
Embracing a brand-oriented management philosophy For those Chinese brands with the ambition to become global brands, we believe embracing a brand-oriented management philosophy is essential. Only when brand strategy is fully synchronized with business strategy will your brand begin to unleash its full potential to drive the business forward: shaping your business decisions, directing your growth and ensuring that everyone in the company is on the same page to deliver a fully integrated customer experience. Interbrand sincerely hopes our annual Best China Brand ranking is a reminder for Chinese executives and business leaders that brands are the most valuable asset of a company and it takes top management’s commitment and constant investment in brands to render truly sustainable growth.
Interbrand Best China Brands 2011
How do we value Best China Brands? The Interbrand method for valuing brands is proven, straightforward, and profound. It examines brands through the lens of financial strength, the importance of the brand in driving consumer selection, and the likelihood of ongoing revenue generated by the brand. To start, Interbrand compiles a list of global brands from our marketing database accumulated from more than 25 years of valuing brands and nearly four decades of consulting with organizations around the world. We then narrow the candidates based on the following criteria for consideration: 1. There must be substantial publicly available financial data. 2. The brand must be positioned to play a significant role in the consumers’ purchase decision. 3. The Economic Value Added (EVA) must be positive, showing that there is revenue above the company’s operating and financing costs. 4. The brand must have a broad public profile and awareness. 5. The brand is barely affected by uncertain factors such as sector polices Based on these criteria, certain brands you might expect to see in this ranking are not included. Huawei for example, is privately held and do not have financial data publicly available. CCTV, is state-owned media but not a business organization. Certain industry sectors are also not included in our study. An example are real estate brands, we include them in the list in 2006 and 2007, but we observed these enterprises’ operating performance is greatly influenced by the polices, land cost and accounting assumptions. Therefore, the real estate brands have been not included in the list since 2010. And a similar example is the airline brands.
For brands that meet the Interbrand criteria, we next look at the current financial health of the business and brand, the brand’s role in creating demand, and the future strength of the brand as an asset to the business. This method is defined on the opposite page.
Interbrand Best China Brands 2011
Methodology Interbrand’s method looks at the ongoing investment and management of the brand as a business asset. This means that our method takes into account all of the many ways in which a brand touches and benefits its organization – from attracting and retaining talent to delivering on customer expectation. The final value can then be used to guide brand management, so businesses can make better, more informed decisions.
FINANCIAL PERFORMANCE Financial performance measures an organization’s raw financial return to the investors. For this reason, it is analyzed as economic profit, a concept akin to Economic Value Added (EVA). To determine economic profit, we remove taxes from net operating profit to get to net operating profit after tax (NOPAT). From NOPAT, a capital charge is subtracted to account for the capital used to generate the brand’s revenues; this provides the economic profit for each analyzed year. For purposes of the rankings, the capital charge rate is set by the industry weighted average cost of capital (WACC). The financial performance is analyzed for a five-year forecast and for a terminal value. The terminal value represents the brand’s expected performance beyond the forecast period. The economic profit that is calculated is then multiplied against the role of brand to determine the branded earnings that contribute to the valuation total as noted earlier.
There are three key aspects that contribute to the assessment: the financial performance of the branded products or services, the role of brand in the purchase decision process and the strength of the brand.
ROLE OF BRAND Role of brand measures the portion of the decision to purchase that is attributable to brand – this is exclusive of other aspects of the offer like price or feature. Conceptually, role of brand reflects the portion of demand for a branded product or service that exceeds what the demand would be for the same product or service if it were unbranded. Role of brand determinations for this study derive, depending on the brand, from one of three methods: primary research, a review of historical roles of brand for companies in that industry, or expert panel assessment. The percentage for the role of brand is multiplied by the economic profit of the branded products or services to determine the amount of branded earnings that contribute to the valuation total.
BRAND STRENGTH Brand strength measures the ability of the brand to secure the delivery of expected future earnings. Brand strength is reported on a 0 to 100 scale, where 100 is perfect, based on an evaluation across 10 dimensions of brand activation. Performance in these dimensions is judged relative to other brands in the industry, and in the case of exceptional brands, relative to other world-class brands. The brand strength inversely determines, through a proprietary algorithm, a discount rate. That rate is used to discount branded earnings back to a present value based on the likelihood that the brand will be able to withstand challenges and deliver the expected earnings.
Operating Profits Branded Earnings x
Taxes = NOPAT -
Economic Profit x
Brand strength
WACC =
Role of Brand =
Discount rate
ECONOMIC PROFIT
BRANDED EARNINGS
BRAND VALUE
BRAND VALUE RESULTS The parts come together so that forecast financial performance projects economic profits that are multiplied by the role of brand to reveal branded earnings, which, based on the brand strength, are discounted back to a present value and totaled to arrive at a brand value.
Interbrand Best China Brands 2011
2011 Best China Brands 2010 BV rank BV rank
Brand
Sector
BV 2011 Million RMB
BV 2010 Million RMB
BV Var% (10-11)
1
CHINA MOBILE
Telecommunications
208,980
202,855
3%
2
CHINA LIFE
Financial Services
104,031
99,510
5%
CHINA CONSTRUCTION BANK
Financial Services
100,822
96,201
5%
4
ICBC
Financial Services
88,489
77,699
14%
5
BANK OF CHINA
Financial Services
72,855
68,416
6%
6
PING AN
Financial Services
59,995
56,971
5%
8
TENCENT
Internet Services
40,320
22,964
76%
9
MOUTAI
Alcohol
29,546
21,430
38%
7
CHINA MERCHANTS BANK Financial Services
27,561
23,199
19%
10
CPIC
Financial Services
21,383
15,349
39%
11
BANK OF COMMUNICATIONS
Financial Services
17,031
12,769
33%
17
BAIDU
Internet Services
12,533
6,950
80%
12
LENOVO
Electronics
11,622
10,108
15%
13
WULIANGYE
Alcohol
11,292
8,807
28%
15
SPD BANK
Financial Services
10,235
8,137
26%
14
TSINGTAO
Alcoholic Beverage
9,504
8,481
12%
21
ANTA
Sporting Goods
9,100
5,272
73%
18
CITICS
Financial Services
8,808
5,875
50%
24
CMBC
Financial Services
8,226
5,036
63%
27
ALIBABA
Internet Services
7,782
4,014
94%
22
CHINA CITIC BANK
Financial Services
7,723
5,170
49%
16
LUZHOU LAOJIAO
Alcohol
7,579
7,379
3%
33
CTRIP
Internet Services
7,264
3,314
119%
25
INDUSTRIAL BANK
Financial Services
6,743
4,486
50%
23
CHANGYU
Alcohol
6,743
5,072
33%
3
Interbrand Best China Brands 2011
2011 2010 BV rank BV rank
Brand
Sector
BV 2011 Million RMB
BV 2011 Million RMB
BV Var% (10-11)
26
20
DFM
Automotive
6,266
5,333
18%
27
30
YUNNAN BAIYAO
Pharmaceuticals
5,877
3,813
54%
28
-
CHINA TAIPING
Financial Services
5,724
-
-
29
19
LI-NING
Sporting Goods
5,163
5,771
-11%
30
29
CHINA MERCHANTS SECURITIES
Financial Services
4,349
3,849
13%
31
26
GREE
Electronics
4,345
4,126
5%
32
40
NEW ORIENTAL
Education
4,319
2,640
64%
33
31
MIDEA
Electronics
4,111
3,743
10%
34
36
HAIER
Electronics
3,870
3,118
24%
35
34
NETEASE
Internet Services
3,611
3,306
9%
36
39
SUNING
Retail-Electronics
3,216
2,742
17%
37
35
YURUN
Food & Beverage
2,967
3,287
-10%
38
28
MENGNIU
Food & Beverage
2,898
3,947
-27%
39
-
CHINA EVERBRIGHT BANK
Financial Services
2,820
-
-
40
44
PEAK
Sporting Goods
2,436
1,799
35%
41
43
361o
Sporting Goods
2,387
1,994
20%
42
32
SOHU
Internet Services
2,167
3,348
-35%
43
-
BELLE
Apparel
2,119
-
-
44
42
999
Pharmaceuticals
1,850
2,096
-12%
45
50
HUAXIA BANK
Financial Services
1,824
1,151
58%
46
-
GREAT WALL
Automotive
1,786
-
-
47
46
BOSIDENG
Apparel
1,778
1,422
25%
48
45
HAITONG
Financial Services
1,709
1,747
-2%
49
38
SHUANGHUI
Food & Beverage
1,695
2,850
-41%
50
-
BANK OF BEIJING
Financial Services
1,360
-
-
Interbrand Best China Brands 2011
01
CHINA MOBILE
￥208,980 million
3%
China Mobile enjoys the largest global network and consumer
popularity of its intelligent terminal and broadband mobile
base. A variety of product brands such as GSM (global system for
network, the brand knows how to provide value-added services
mobile communications), M-ZONE, Easy Own and G3, with
for customers besides, which in turn sets up challenges for its
different market targets, have accumulated a stable customer
competitors.
base for China Mobile. China Mobile launched the brand “i-power” to keep expanding its customer base. With the increasing
02
CHINA LIFE
￥104,031 million
5%
As the largest life insurance company in China, China Life earned
accelerating the development of individual insurance and bank
the trust of clients with its long history, stability, nationwide
assurance businesses. It has also retained the advantages of
sales, service network and solid product line. It has built up the
having the largest sales network nationwide and officially opened
brand image of authority, trustworthiness, and honesty by
its online sales channel. China Life emphasizes corporate social
communicating and practicing the brand slogan “To Know, To
responsibility by “spreading kindness, benefiting society” through
Trust” for many years. Facing a complicated business
two of its organizations: China Life Charity Foundation and China
environment of 2010, China Life consolidated its leading position
Life Volunteers Association.
in the domestic market and optimized its operating structure by
03
CHINA CONSTRUCTION BANK
￥100,822 million
5%
China Construction Bank (CCB) is one of the five largest
Forever” and a customer-centric business concept for
commercial banks in China, and features medium and long-term
implementation. In 2010, CCB launched Min Ben Tong Da
credit businesses. It also occupies a leading position in the field of
(meaning human-oriented growth) brand for comprehensive
infrastructure loans and home financing, taking on some
financial services including “cultivation of people through
higher-risk projects in China. CCB has traditionally maintained
education” and “happiness of people through culture”. It also won
good relationships with leading strategic corporate customers,
an Outstanding Dedication Award by China Red Cross.
major financial institutions and government customers. CCB’s brand communication focuses on the interpretation of the ancient culture, and has slogans such as “Pursue Excellence, Prevail
Interbrand Best China Brands 2011
04
ICBC
￥88,489 million
14%
Having the largest number of customers and widest banking
the minds of customers who see the brand as "arrogant" with only
network, Industrial and Commercial Bank of China (ICBC) makes
a "single product,”. Today, much to consumer’s surprise, this old,
the top three on this year’s list. The large scale and growing
established, state-owned bank is getting in touch with the digital
branded revenue provide ICBC with a solid foundation for brand
age by utilizing micro-blogging and other social means of
value. Moreover, the bank is actively exploring overseas markets,
communication. Admittedly, ICBC will need time to make the
constructing information networks and improving products and
most of this new medium.
services to shed its “local” brand personality and gradually reverse
05
BANK OF CHINA
￥72,855 million
6%
06
PING AN
￥59,995 million
5%
Among the four major state-owned banks, Bank of China (BoC)
In 2010, Ping An made significant breakthroughs in the banking
considers its international brand image to be unique. Its brand
business by successfully acquiring ShenZhen Development Bank.
communication philosophy is “global service”, aimed at
The establishment of Ping An-UOB Fund has further enriched its
strengthening the brand’s equity. Recently, the bank worked with
product line and completed its integrated financial model. Ping
overseas partners to strengthen cooperation, consolidate its
An brought corporate social responsibility to its business by
international operations, and increase the diversity of financial
promoting the concept of “Green Finance” and start the “Green
products, especially in the medium to high-end personal banking.
Commitment, Ping An China” and “Low Carbon 100 Action Plan.”
This enhanced the brand’s reputation and loyalty. However, the
These initiatives combined with other CSR activities strengthened
brand attribute of "internationalization,” may hardly maintain its
the Ping An brand image and helped grow its brand value.
brand differentiation in the near future.
07
TENCENT
￥40,320 million
76%
08
MOUTAI
￥29,546 million
38%
In March 2010, Tencent ushered in a new era by hosting more
"A state banquet with wine", this high-end brand image is the
than a hundred million people online simultaneously, a major
most important asset of the Moutai brand. However, this
milestone in the history of China's Internet. As the largest
premium brand image is a double-edged sword. With high
integrated Internet services provider, Tencent launched a
prices, the brand is no longer as accessible and has become the
comprehensive open platform strategy in 2010 covering QQ, QQ
“wine of the privileged class” to consumers. To eliminate this
Space, QQ Mall, TenPay, Tencentmicroblog, Pat and other
misunderstanding and improve its brand image, Moutai has
platforms. With this approach, its slogan of "one-stop online life"
made many efforts in recent years. One of the most
has started to take shape. Tencent promotes the concepts of
noteworthy moments was when Moutai came up with "wine
youth, social networking, entertainment, interaction and bases
of the privileged class" and "wine of culture" concept. The
through its QQ brand, but the overall recognition for Tencent is
move allowed Moutai to position the brand on a solid
lower without a systematic and consistent presentation of the
foundation, and rebrand itself into a more affordable product.
corporate brand within other business segments.
09
CHINA MERCHANTS BANK
￥27,561 million
19%
10
CPIC
￥21,383 million
39%
China Merchants Bank became the first to make use of
CPIC is strategically transforming from a product-/sales-oriented
micro-blogging and other social media to interact with
to customer-oriented culture and launched differentiated
customers. This reflects China Merchants Bank’s "we’re here just
products and sales channels based on customer needs. China
for you", customer-focused business philosophy. Bank customers’
Pacific Insurance gradually established its brand image of being
demands for more financial products have created more
honest, convenient and intimate by consistently communicating
emphasis on improved service standards and communications.
and practicing the brand slogan of “Promise with Heart,
This, to a certain extent, has added to China Merchants Bank’s
Responsible with Love” and the brand commitment of “We will be
brand strength. However, while China Merchants Bank has
around you anytime,”
improved its efficiency, convenience and friendly customer service, it has yet to explore its full potential, leading to the gradual loss of freshness in the brand.
11
BANK OF COMMUNICATIONS
￥17,031 million
33%
12
BAIDU
￥12,533 million
80%
Bank of Communications is a 100-year-old, national financial
As the largest Chinese search engine and website, Baidu
services brand, but through its cooperation with HSBC, it has
communicates in a simple and direct way, applying marketing
been a leader in introducing advanced technology and products.
slogans like, “Use Baidu and you will know”, and “House
It continuously pursues financial innovation, helping to enhance
searching, use Baidu yet?” thus winning over Chinese netizens
its image as China’s leader in financial reform. Bank of
with a definitive brand image. Baidu has more than 70% market
Communications emphasizes its brand heritage and core values
share in China and enjoys a large customer base. As an Internet
of history, integrity and communications to shape its image. At
brand, Baidu quickly responds to the market and continues
the same time, it relies on personal communications and
launching new products and services to meet market needs with
exceptional services to become more desirable to customers.
a wide business scope and comprehensive service content. In addition to functional search, Baidu launched community search, mobile Internet services, website, enterprise services, and online entertainment. With its online entertainment, PasteBar and Baidu Knows have resonated extremely well with users.
Interbrand Best China Brands 2011
13
LENOVO
￥11,622 million
15%
In May of this year, Lenovo Group chairman Liu Chuanzhi made a
these brands has enhanced the Lenovo brand internationally
high-profile announcement, "after six years of operation, Lenovo’s
among young, fashion-oriented consumers.
acquisition of IBM’s PC business can be said with great success." The excellent performance in fiscal year 2010/2011, and successful communication of Lenovo’s core products, such as mobile phones and laptops contribute to the increasing brand value of Lenovo. Although different product brands have different personalities, together, the expression of
14
WULIANGYE
￥11,292 million
28%
As the symbol of the Chinese liquors, Wuliangye always takes the
activities, tasting, sale terminal, and souvenir kiosks at the
top position in China’s high-end spirits market. Leveraging its
Shanghai Expo. Moreover, it has an excellent track record in social
unique “five grains brewed” message has helped extend the brand
welfare and environmental protection causes and always puts its
into multiple product lines in middle and low-end markets,
corporate mission of “benefiting society by wisdom, courage and
satisfying the needs of consumers in different regions and social
diligence” into action. Wuliangye also proactively supports its
levels. As a high-end liquor brand, Wuliangye consistently invests
international strategy, and works hard to achieve its goal of
in brand communication to seize market opportunities. It
“China’s Wuliangye, the World’s Wuliangye.”
strengthened its position as an industry brand leader with a full display of videos,
15
SPD BANK
￥10,235 million
26%
16
TSINGTAO
￥9,504 million
12%
In 2010, SPD Bank introduced China Mobile as its strategic
For a long time, when a consumer thought of Tsingtao beer, they
partner to make its core capital ratio increase dramatically.
would think of "a brand with a long history" and "mellow taste."
Recently, SPD Bank became a flagship financial group entity in
Because of this, Tsingtao Beer has been exploring how to
Shanghai, citing the city’s development through transformation,
re-energize the brand, relating to young consumers. Over the
and aims to become a world-class corporate brand. SPD Bank
past two years, we have been pleased to see the efforts of
also intends to be the first “low-carbon bank” in China’s finance
Tsingtao Beer: collaboration with the NBA, sponsoring a variety
industry, using its financial leverage and capital allocation to
of sporting events, the use of personalized packaging and
demonstrate green corporate social responsibility to its
combined use of various means of communication. The Tsingtao
customers.
beer brand is full of vitality and these attempts have strengthened its "Passion and Dream" brand proposition, appealing to younger consumers, but also enhancing the brand's market influence.
Interbrand Best China Brands 2011
17
18
ANTA
￥9,100 million
73%
CITICS
￥8,808 million
50%
As a professional sports brand, Anta adheres to a clear brand
CITICS achieved growth in 2010 and remained in the number one
philosophy: “Keep Moving.” Anta’s sponsorship of professional
position. Its main businesses performed well and investment
sporting events with top athletes and corporations clearly
banking surpassed the CICC in underwriting results for the first
demonstrates that Anta is a professional sports brand. In
time. Inheriting a culture of innovation from CITIC Group, CITIC
addition, Anta was able to quickly respond to the market by
Securities has gradually established the brand image of “being
launching Anta Lifestyle and Anta Kids to meet the sporting
steady, visionary and strong” by balancing the relationship
goods needs of women and children. In terms of brand
between stability and innovation, proactively enhancing business
protection, a multi-brand strategy favors sustainable
model transformation, adding customized service in its broker
development for Anta.
business, and accentuating the advantage of its research capabilities.
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CMBC
￥8,226 million
63%
As China’s first commercial bank to complete share reform,
concept “To serve the public and offer care to the public,” which
Minsheng Bank targets private enterprises, small and
expresses its core value and social mission to serve the public with
micro-enterprises, and high-end customers through continuous
a genuine and honest attitude. Its brand position is consistent
product innovation and value creation for customers. It has been
and highly recognized.
a leader in comprehensive return and risk control, and they have been honored for their efforts many times. In 2010, Minsheng Bank further strengthened its strategic focus on small businesses by unifying management practices and delivering on its brand
20
ALIBABA
￥7,782 million
94%
Alibaba maintains an extremely clear position and devotes itself
through its AliExpress, and 1688.com platforms. Leveraging the
to growing small and medium-sized enterprises through its
resource integration of the whole group, Alibaba constantly
e-commerce platform. In 2010, Alibaba accelerated its business
delivers on its brand mission to ''Make business easy.”
transformation, migrating from "Meeting in Alibaba" where it was merely an information platform for buyers and sellers to "Working in Alibaba" where it now enables complete online transactions
Interbrand Best China Brands 2011
21
CHINA CITIC BANK
￥7,723 million
49%
As one of the earliest emerging commercial banks in China, China
further expand its scope of customer service and provide
CITIC Bank is the first commercial bank that participated in
high-quality and efficient online financial services by 2011.
raising funds in financial markets both at home and abroad with great success. After more than 20 years, China CITIC Bank has
“Promise and keep it” became China CITIC Bank’s business
achieved outstanding growth in private banking and excels in
message, emphasizing its commitment to customers. However, a
such emerging businesses as custody, investment banking and
uniform, clear and in-depth brand message will be hard to deliver
auto financing, thus laying a solid foundation for rapidly
in the near future because of a weak link between brand and
developing itself into a national commercial bank with a
customer experience, as well as inconsistent communication
competitive advantage. Relying on the technical superiority of
platforms.
Alibaba and customers in e-commerce, China CITIC Bank will
22
LUZHOU LAOJIAO
￥7,579 million
3%
In 2010 LuzhouLaojiao continued its strategy of "dual-brand building and multi-brand operation" put forward in 2009. The high-tier brand image was leveraged by Guojiao 1573 and LuzhouLaojiaoTequ specifically for the high-end market, at the same time, these product lines were optimized through multi-brand operations to ensure the supply for markets of different levels and to enhance its brand presence. The relevant brand associations should still be communicated more effectively while the distribution of its activities is strongly positioning the social responsibilities of its enterprises.
24
23
CTRIP
￥7,264 million
119%
As a leading online travel service brand in China, Ctrip.com serves more than ten million registered members with hotel reservations, airline ticket booking, holiday travel booking, business travel management, merchant recommendations and travel information. Ctrip.com targets the mass market of business and independent travel with fast, cost-effective products and reliable services. With fierce competition, Ctrip.com needs to refine and differentiate its brand proposition and deepen its brand assets in respect of travel, to become a stronger brand.
INDUSTRIAL BANK
￥6,743 million
50%
Industrial Bank was established for 23 years and has developed
Trust Ltd. and reached a cooperative agreement with partners
into an outstanding bank with a unique positioning in the
including China United Network Communications Limited and
market. With balanced principles, Industrial Bank uses green
Hang Seng Bank in many fields. This will help Industrial Bank
credit, energy saving and emission reduction as competitive
advance in comprehensive management, financial services ability
offerings to differentiate its business strategy and support its
and brand influence.
image of being the “Pioneer of Green Banking”. In addition, Industrial Bank has taken the lead in establishing a bank-to-bank cooperation platform and is innovative in terms of inter-bank services. From the end of 2010 to the beginning of 2011, Industrial Bank has purchased and controlled the shares of Union
Interbrand Best China Brands 2011
25
CHANGYU
￥6,743 million
33%
As the largest wine-producing enterprise in Asia, Changyu creates
its large underground century-old wine cellar are known as one of
a co-branding model with its alliances with world-famous
the ”Asian Miracles” and have become famous local attractions. In
vineyards. The cooperation focuses on branding, technology and
March 2010, Changyu International Wine Town was opened as a
marketing where Changyu shares profits and markets with
national AAAA grade scenic spot. It will be an important outlet for
partners while leveraging their brand equity to consolidate its
the communication of wine culture, as well as a great touch point
high-end brand image. Changyu has always been the industry
for Changyu to accumulate brand assets.
leader in the popularization of wine culture in China: both Changyu Wine Culture Museum located in Yantai Shandong and
26
DFM
￥6,266 million
18%
As one of the three largest auto companies, Dongfeng Motor
maintained its leading position through cooperation with
started with the production of medium-sized trucks. After 40
world-renowned engine and technological manufacturers and
years of development, it now manufactures a full series of
has sustained investments in independent innovation. In the
commercial and passenger cars, engines and auto parts. In 2010,
passenger vehicle field, successful collaborations with a number
due to the combined effects of various policies for encouraging
of international brands have contributed to its solid reputation,
consumption, China's automobile industry experienced rapid
but it still lags behind in its own brand's performance in the
growth and Dongfeng Motor's sales reached 2.6 million, which
overall market due to its late development. However, the success
ranked them the second place in the domestic automobile
of Dongfeng Xiaokang, which is characterized by precise
industry. In the field of commercial vehicles, especially
positioning and clear communication, helps reinforce the
medium-sized commercial vehicles, Dongfeng Motor has always
company’s confidence in its own brand.
Interbrand Best China Brands 2011
27
YUNNAN BAIYAO
￥5,877 million
54%
A century-old brand, Yunnan Baiyao is billed as the “Treasure of China and Power Cure” as a result of its unique and amazing curative effects. Yunnan Baiyao makes skillful use of its dynamic brand asset – “hemostasis” – to extend products to wound treatments, aerosols and toothpaste. It also promotes its products among young consumers by sponsoring Olympic Games and holding street basketball games so that the brand can get close to young consumers and project vitality. Yunnan Baiyao carries out a multi-brand strategy, with Yunfeng in the field of typical natural drugs, Qiancaotang in the field of health and
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health preservation, Taibang in the field of bandages and first aid, Tianzihong in the field of women’s drugs and Tongqiaoqiao in the field of children’s drugs. All of these sub-brands are continuously developing in both depth and breadth, while Yunnan Baiyao rules one single field – traumatology. Its multi-brand strategy strengthens the value proposition of each brand and firmly occupies consumers’ minds; at the same time, it reduces the risk of a single brand by avoiding dilution of its core brand value.
CHINA TAIPING
￥5,724 million
NEW
China Taiping, formerly named China Insurance, is the oldest
overseas businesses. After years of effort in integrating brand
insurance company in China, covering life, property, casualty,
resources, it has successfully established awareness and influence
endowment, reinsurance and asset management through a
as an ambitious industry challenger. With an 80-year history in
network of direct consultants, brokers, and agents. As the only
both domestic and overseas markets, it reflects characteristics of
Chinese insurance company with headquarters in Hong Kong and
both oriental and western cultures, further supportings its brand
a long history of overseas operations, China Taiping insists on
differentiation. Now its key challenge is bringing that
international standards, and has a leading position in the Hong
differentiation to life in concrete communications and branding
Kong, Macau and Singapore. China Taiping returned to the
practices.
domestic insurance market in 2011 while it strengthened its
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LI-NING
￥5,163 million
-11%
30
CHINA MERCHANTS SECURITIES
￥4,349 million
13%
As a leading sports brand in China, Li-Ning, relying on the Beijing
"Investors should have the right to choose" is the brand belief of
Olympic Games, surpassed Adidas’ market share in 2009 and
China Merchants Securities. It offers a variety of products and
ranked second (after Nike) in China. Li Ning launched a complete
services to meet the demands of individual, institutional and
rebranding campaign in 2010 which targets the 90s generation as
financial clients, challenging the traditional brokerage model
its core consumers. However, so far, the new positioning,
which focuses on business customers. In 2010, China Merchants
changed logo and slogan have not yet brought Li-Ning the
Securities has established a sound risk control system and solid
expected growth it envisioned. Therefore, does Li-Ning’s brand
technical support platform. With prudent investment and
strategy, aimed at the 90s generation, need to “make a change”?
long-term prospects, China Merchants Securities has also rapidly developed its asset management and investment banking businesses.
Interbrand Best China Brands 2011
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GREE
￥4,345 million
5%
In recent years, Gree has shown its dedication to independent
energy technology as a supplier of central air conditioners, which
innovation with its new slogan: “Grasp the Core Technology.” In
provided a good example of its international promotion efforts. In its
2010, Gree released three self-developed core technologies, which
brand communication, Gree has consistently focused on
filled a technological vacancy in the domestic air conditioning
professionalism, technology and quality, but the lack of emotional
industry that reached international levels. During the World Cup in
associations with the brand combined with repeated air conditioning
South Africa, it enhanced its image considerably due to the stable
explosion scandals have damaged the brand’s perception of quality.
operation of its high-quality products –the application of low-carbon
32
NEW ORIENTAL
￥4,319 million
64%
33
MIDEA
￥4,111 million
10%
As China's first, overseas-listed educational institution, New Oriental
Despite a high degree of homogeneity in the white goods industry,
has been in the market for five years. New Oriental is extending its
Midea hopes to gain a competitive edge through service and building
network of schools to fourth tier cities and is expanding its business
the best service brand in the industry. In 2010, Midea invested 200
to a wider area, such as online education, education product
million RMB to upgrade its service and actively promotes service
development and media publishing.
standards for the industry. In March 2011, the on-site cleaning service standard of refrigerators and washing machines was formally
New Oriental is also using social media, such as Renren to closely
adopted by the Ministry of Commerce, setting the standard for
interact with its target audience, and to win the brand a broader and
household electric appliance enterprises. In brand communications,
more positive reputation. This has managed to enhance its brand,
Midea has been advocating the concept of "Life can be better."
further contributing to New Oriental’s brand being in a top position.
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HAIER
￥3,877 million
24%
By adhering to the concept “Sincerity is Forever” when it was
home appliances, it ranks first in the world. This success reflects
established 27 years ago, Haier has been diversifying beyond its
its innovative ability to satisfy consumers’ individual needs as well
core business of manufacturing home appliances. The idea of
as take the leading position in green trends. In 2010, Haier took
“individual-goals” helped Haier to make the transition from
the “EXPO” opportunity to offer sponsorship and marketing
“selling products” to “selling services” and to become the
strategies for pavilions of many countries; it promoted home
“Representative of China’s home appliances”.
appliance modernization by virtue of its “Internet of things” to further strengthen Haier’s status as “the first brand of global
2010 is the fifth year of Haier’s implementation of its global brand strategy. Representing 6.1% of the global retail volume of large
consumer appliances” and also as a “Global leader.”
Interbrand Best China Brands 2011
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NETEASE
￥3,611 million
9%
Netease repeatedly highlights its core concept “Power to
cooperates with international gaming companies to foster
People”, by marketing entertaining and practical services like
many popular, high-quality, online games that greatly increase
online gaming, free email accounts, Picasa Web Albums, online
its value.
videos and microblogs. In recent years, Netease has achieved rapid development in online gaming because it develops gaming platforms based on its research and development ability and
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SUNING
￥3,216 million
17%
Suning is the leading electronics retail chain, as well as the largest
devotes itself to providing customers with excellent services
commercial enterprise group in China. With nearly 1,500 stores in
covering pre-sales, sales and after-sales, to create a great
more than 300 cities nationwide and a persistent investment in
shopping experience. In 2010, its e-commerce platform, "Suning
advertising, it has gained great brand awareness. The brand
Tesco" was formally launched. Thanks to Suning’s accumulated
slogan of "Bring Happiness Home" is gradually becoming familiar
advantages with suppliers and backstage facilities, Suning Tesco's
in the marketplace. With its focus on consumer demand and its
market share in e-commerce has constantly increased, surpassing
constant innovation of store models, it has transformed its
a number of well-known e-commerce websites that have been in
first-generation air conditioning franchise stores into the seventh
the market longer. This fully demonstrates Suning’s great brand
generation Expo Super Flagship Stores and developed a portfolio
appeal.
of multi-format stores for various market segments. Suning believes that service is its most important product and
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YURUN
￥2,967 million
-10%
38
MENGNIU
￥2,898 million
-27%
In 2011 with food safety incidents in the meat processing
Mengniu replaced its brand communication of “Every Day for
industry, Yurun was not immune to the industry’s challenges.
Tomorrow” with “Good Quality and Green Life,” which
Through rapid response and crisis control, Yurun managed to
demonstrated its determination to implement a quality-based
reduce the negative impact on its brand. However, with
green strategy. Mengniu set up funds with relevant state
consumers concerned about food safety issues, and the gradual
ministries to realize the ecological forestation of the grassland
increase in information transparency, Yurun must carefully
and communicated green ideas to the public through its pavilion
adhere to the "food industry is a moral industry" philosophy and
during the Shanghai World Expo. However, as is evident from the
abide by stringent production guidelines in order to establish a
student milk scandal in April 2011 and the microblog disturbance
truly high-end, reliable food brand.
afterwards, Mengniu's crisis has not yet subsided.
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CHINA EVERBRIGHT BANK
￥2,820 million
NEW
40
PEAK
￥2,436 million
35%
Based on “Customer centric” and “Service and solution drives,” China
Since its establishment, Peak has built a clear brand philosophy
Everbright Bank makes active attempts to transform itself from a
focused on basketball both in its marketing and promotion, and
product bank to a customer bank. The bank succeeded in listing A
has established a cooperative partnership with world-famous
shares in 2010, which will help the brand achieve new development
basketball leagues, events and players. The close integration with
in the future. It is worth noting that China Everbright Bank recently
basketball has given Peak an edge over other sports brands in
invested heavily in its brand to form a uniform and clear image
China. Beyond basketball, in 2010 Peak has placed greater
between key businesses and marketing communications.
emphasis on expanding into running, tennis and football. Peak expects to foster an international and professional brand image among the Chinese consumers with this new brand strategy.
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42
361°
￥2,387 million
20%
SOHU
￥2,167 million
-35%
As a leading domestic professional sports brand, 361° always
Sohu is committed to making networks an indispensable part of the
adheres to building and investing in their brand, and encourages
Chinese way of life. In 2010, with its "Rebuild Sohu" strategy, it
all young consumers to engage in sports. Benefiting from the
emphasized the synergy of its video (media), search engine, game,
continued expansion of its retail network, innovative marketing
Web2.0 and other businesses to enhance its competitiveness across
methods and other factors, 361° has witnessed robust growth
a wide range of products. Although it missed the first strike in
between 2010 and 2011. By sponsoring the 2010 Guangzhou
microblogging, Sohu still regards microblog as a key product to
Asian Games, 361° associates its brand with professional sporting
compete with Sina and Tencent. The Sogo restructuring and the
events and uses “One Asia, One Love” as its slogan. With its
cooperation with Alibaba also indicates its attention to the market
strong brand communication and passionate following, 361°
potential created by Google’s exit.
communicates with consumers more directly.
Interbrand Best China Brands 2011
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44
BELLE
￥2,119 million
NEW
999
￥1,850 million
-12%
Belle is a newcomer to the list of Best China Brands, and this is
China Resources Sanjiu is the leading company in the
not by accident. With the financial crisis and weak growth in
over-the-counter (OTC) industry and and innovator of traditional
domestic consumer markets, Belle International's multi-brand
Chinese medicine prescription drugs. Its core products are based in
and channel strategy has played an active role in this market
domestic pharmaceutical markets where they have high market
environment. With more than twenty private brands and brand
share and strong recognition. In 2010, they continued to focus more
agencies, Belle International plans to cover all market segments,
on research and development, enhancing intellectual property
increasing its anti-risk capacity. Meanwhile, after more than 30
protection for core products and laying the foundation for
years of hard work and construction, Belle's sales channels have
sustainable development. However, due to criminal charges the
penetrated rural areas and fourth-tier cities. It is worth
brand faced in 2010, its reputation was badly affected. Sanjiu
mentioning that Belle’s brand of communication through
advocates paying attention to the adverse effects of western
distinctive branding, flexible and reasonable strategy has caused
medicine and highlights the safety of traditional Chinese medicine in
the target consumers to have high awareness and positive
its branding efforts to create brand differentiation. The brand lacks
reputation of the brand. The combination of these factors pushes
imagination by only focusing on general Chinese medicine attributes
Belle's first appearance on the list to occupy a good position.
instead of core consumer demands. In addition, after it was renamed "China Resources Sanjiu", it has been considering whether it should leverage the brand equity of its major shareholder.
45
HUAXIA BANK
￥1,824 million
58%
46
GREAT WALL
￥1,786 million
NEW
Huaxia Bank is the fifth listed Chinese bank and advocates a
Great Wall Motor, a private auto company with great potential for
human-focused corporate culture and values of “integrity,
development, has focused on its international and domestic market
standard, harmony” to enhance its social reputation and sustain
development strategy for years. Its hero brands Haval and Wingle
its development capability. The strategic orientation of Huaxia
continue to be China's top sellers and exporters in their respective
Bank is to offer services to small and medium enterprises. Its
market segments; they also accumulate abundant brand equity for
“dragon boat” plan includes a series of high value products and
the main brand thanks to their excellent quality. In 2010, Great Wall
services targeted to this specific segment of the market. Given
Motor launched its first sedan, Voleex C30, which has high-quality
Huaxia’s focus, the awareness and identity of its brand needs
features and was an instant success in the market. This marked its
further enhancement and external expression to fully clarify its
initial strategic transition into the car market and fully reflected its
unique market position.
brand appeal. Due to its long-term pursuit and confidence in quality, Great Wall Motor launched its brand tagline "The Great Wall Car Made in China", which represents the sentiment of a private enterprise ready to serve its own country. In 2010, the Great Wall Motor team participated in the Dakar Rally and established a pragmatic voice in the world with an ultimate challenge to consistently deliver superior quality.
Interbrand Best China Brands 2011
47
BOSIDENG
￥1,778 million
25%
48
HAITONG
￥1,709 million
-2%
BOSIDENG has adopted the new strategy “to accurately position
Hai Tong has enjoyed a good reputation in the business sector
segmented markets and effectively develop multiple brands” and
with its stock and bond underwriting, and mergers and
“seasonal product transformation.” It launched six core brands of
acquisitions, especially, with a strong competitive edge in small
down apparel and two non-down “MAN” apparel brands to cover a
and medium-sized stock underwriting. Under the pressure of the
wide range of age groups and styles.
commission war in domestic brokerage in 2010, it sought to transform the brokerage business from trading channel-centered
In 2010, BOSIDENG has made great efforts to become a top global
services into comprehensive customer-centered ones. Because of
brand. by accelerating its entry into the international marketplace
this, the brokerage service brand of the Rainbow Club was
when “Bosideng MAN” entered GREENWOODS, the famous UK
launched to improve customer satisfaction and meet customer
retailer, and established franchise stores in the UK enhancing its
needs. At the same time, Hai Tong has strengthened its
“international” brand image. In 2010, BOSIDENG cooperated with
investments in new industrial projects, captured the market of
many famous e-business websites to facilitate its brand message in
stock index futures trading and made breakthroughs in
new media.The establishment of large flagship stores in many
consulting on financial and overseas emergency sales.
domestic, large cities also effectively promoted the overall brand image of the group.
49
SHUANGHUI
￥1,695 million
-41%
50
BANK OF BEIJING
￥1,360 million
NEW
With mainstream and social media extensively reporting on
Founded in 1996, Bank of Beijing achieved rapid economic
quality issues,Shuanghui is facing declining consumer
development with a strong base of high-quality customers, and
confidence. Because of its brand strength, Shuanghui still
adherence to its market positioning "to serve the local economy,
remains on the Best China Brands list. After the crisis, Shuanghui
SMEs and the people." It quickly grew into a unique commercial
presented a new brand slogan, "We are in action", but it still faces
bank with a business philosophy to be customer-centric. It has
serious quality issues which include consumer distrust and
had an outstanding performance in the financial sector in recent
resisting the sentiment related to internet blogging and other
years, playing a leading role in the support of SME development,
social media, further escalating problems with the brand.
environmental protection related credit business and cultural and
Shuanghui will only maintain its position through courageous
creative industries. In 2010, it significantly improved its total
reflection, a successful business strategy and solid actions in
profits, risk profile, and cooperation with other financial
order to secure a top spot in next year’s list.
institutions, and it made its retail financial business a major priority of future development. "Sincerity" is the core focus of its messaging, and it is on the way to building a brand image of "a modern, international and service-leading commercial bank'' by emphasizing its goal of "reliable, high-credit and meeting the needs of local customers.”
When growth slows down Eric Shao
Associate Director, Strategy, China
We have become accustomed to China’s booming growth, but we seldom ask ourselves whether the growth is sound and what unseen costs might exist. When growth slows, how will our thinking and actions fundamentally change?
Fears of China’s domestic inflation, the U.S. credit
As a responsive indicator, growth rate will directly
crisis, and the consequent reactions in the
affect brand value, when a brand’s profitability
financial market—these are just some of the many
decreases. Markets had high hopes for Chinese
problems signaling the slowing pace of the global
brands in the past given its size and growth. The
economy, which could also affect China. Under
theme of our BCB 2010, “Riding on China’s
this expectation, will the Best China Brands
Growth”, told the same story of how Chinese
continue their miracle stories in the future?
brands leveraged market growth. However, when the trend slowed, values returned to where they
Re-thinking about the growth pattern The top ten most valuable Chinese brands grew eight percent, exactly matching the GDP trend, but the number was slightly lower than 10 percent for the overall top 50. Ranked first, China Mobile’s value increased by three percent, as the brand faced a fierce smart-phone battle last year. Other top leaders achieved limited growth last year. What is happening to the leading brands? Based on branded revenue, Interbrand’s brand valuation model is an important step in projecting future brand earnings, for which the factor “g” (profit growth rate) is derived from the averaged estimates of a few investment banks. When these banks lower their growth expectation on a brand, its value has to be adjusted accordingly. Sometimes, the adjustment can have a very negative result.
should be. In particular, financial brands are more vulnerable to the outside market, as well as government policies. Many brands like Tencent, China Merchant Bank and China Pacific Insurance can still maintain strong growth momentum. These rapidly growing brands proved their strong potential for achieving high economic return, and they sustained it through this past year.
Interbrand Best China Brands 2011
in Million RMB
Internet Services
Education
Pharmaceuticals
Telecommunications
Sporting Goods
Alcohol
Banking
Bifurcated value growth by industry Internet services and education are the fastest growing
In apparel, brand values have gone up and down during the
industry sectors with above 60% growth, followed by
past year; Metersbonwe left and Belle joined the list. As a
automotive, securities and sportswear. The brands in these
shining star, Bosideng was awarded for its efforts on
industries also achieved great financial performance and high
transforming its young fashion apparel brand. The brand
growth expectations. IT service brands such as Tencent,
definitely needs to design for the dream and lifestyles of its
Baidu, Alibaba and Ctrip, grew to be more open, confident and
target consumers, not just simply design clothing for them.
strong in their service offerings. For instance, Tencent grew to be the largest Internet services portal; Baidu is striving to take
Food & Beverage faced many challenges with health and safety
the place of Google in its absence; and Alibaba and Ctrip are
issues. Brand values were hit because they did not address
continuing to add innovations to their e-commerce
consumers’ concerns and respond appropriately. Although
businesses.
they placed their hopes on advertising, it was not enough, especially since problems existed in their material sources,
New Oriental Education, the only brand in the education service
manufacturing process and quality standards that are
sector, is a weather vane for the whole sector, indicating an
fundamental to the supply chain.
unstoppable trend, as education moves away from the old administrative system and takes risks to redefine itself.
Interbrand Best China Brands 2011
Electronics
Insurance
Alchoholic Beverage Securities
Automotive
Retail
Food & Beverage
Apparel
BSS as the indicator of growth quality Interbrand’s Brand Strength Score (BSS) uses ten factors which create a comprehensive framework for evaluating as well as managing brands. There are four factors from an internal perspective and six factors from an external perspective which provide a view a brand’s long-term ability to secure future brand earnings. In our BCB study, we found high BSS variance in industries such as consumer electronics, Internet services and pharmaceuticals. It could be said that branding is not sophisticated enough in these industries without enough clarity, commitment, protection and responsiveness in managing the brand on a daily basis. On the other hand, top brands still have a lot of room to increase and improve competitiveness by fully leveraging the power of the brand. Today, the average BSS of Best China Brands is relatively low: 48 out of total of 100. If the BSS average of Chinese brands were improved by ten points, the total value of all Chinese brands would increase 44 percent. If so, Best China Brands will achieve another miracle by improving the fundamental quality of branding, rather than leveraging the sales growth or positive expectations. From this excercise, we can see that Chinese brands should focus their attention on quality improvement with patience and openness, since it is a long journey for any brand who wishes to be as competitive as Best Global Brands.
Interbrand Best China Brands 2011
Industry Insights Financial Services Simon Meng
Brand Consultant, China
In 2010, the global financial crisis began to ease little by little. The
need to make good use of brands to strengthen customers’ belief in
world economy continued to be on the difficult road to recovery
their long-range business while practicing basic skills. Second, in
while developed economies witnessed slow growth and emerging
order to strengthen the ability of resisting cyclical risks of the
market countries suffered from high inflation. The reform of the
economy and to form synergies, more and more financial
international financial system and regulation accelerated, and the
institutions have defined the business strategy of comprehensive
deeper impact of the global financial crisis was gradually changing
operation. Financial conglomerates represented by Ping An, CITIC
the pattern of the global economy and finance. In the international
Holdings and China Everbright Group have been playing more and
scene, China accelerated the transformation of economic
more important roles in the whole Chinese financial sector and
development patterns and adjustment of the industrial structure,
need to shape a uniform image of “army group” via brands to
thus continuing to maintain steady and rapid economic
highlight their unique advantages. Third, regardless of developing
development. However, the pressure from “restraining inflation
towards financial conglomerates, the boundary of such traditional
and maintaining growth” built up and the monetary policy of China
industries like banking, insurance, securities and trust have
was adjusted from “moderately easy” to “stable and steady”.
become vague. The cooperation and competition between them becomes increasingly frequent so that financial institutions are
The financial services industry, as the “lifeline” of national economic
required to achieve “customer orientation”, further subdivide
development, is actively transforming itself due to the changes in
market and provide specialized and meticulous financial services
both the international and domestic situation of the Post-Financial
that meet customer needs. In this scenario, the brand becomes the
Crisis Era. This raises new challenges for brand building of financial
important tool for them to accurately communicate with their
institutions. First, as a result of the financial crisis, risk control
target audience – showing their understanding about customer
awareness and related capacity building have been enhanced for
needs and their own distinctive competence.
the whole financial system; however, financial institutions still
Interbrand Best China Brands 2011
Insurance
Securities
In 2010, facing great impact from the financial crisis, China improved the basic construction of the insurance market. The insurance market continued to keep good momentum on development, fundamentally driving the rapid development with total assets increasing by 22 percent and premium income increasing by 30.4 percent. However, China’s insurance industry is still puzzled by over-centralized products and imbalanced channels, so it is facing pressure on structural adjustment; reform policies issued by the supervision department can have a distinct guiding effect. However, improving the ability of enterprises, educating and guiding the market by brand - to let insurance products “return to guarantee” and develop more innovative channels accepted by consumers - is the only way to fundamentally solve their problems.
In 2010, affected by the gradual decline in incentive policies adopted by the government, the expected rise of inflation and the European debt crisis, China’s overall stock market witnessed violent fluctuations and the total income as well as net profit of the securities industry slowed down. As the competition in traditional businesses that “depend on heaven for food” became increasingly intense and small and medium- sized securities companies launched more efforts, the degree of concentration of brokerage and underwriting further decreased. The profit model with service homogeneity is hard to carry on and the transformation of profit model of the securities industry is extremely urgent. It can be seen that the income structure of the industry has presented the characteristics that the income from brokerage greatly decreases while the income from underwriting increases.
Although Chinese-funded insurance enterprises are protected by national policies, they have already faced great challenges from foreign-funded and joint-venture insurance enterprises. In this fierce competition, many Chinese insurance enterprises began to seek the strategic transformation from “product orientation” to “customer orientation” and provide customized products and services according to the different needs of consumers based on market segmentation. The transformation of business strategy needs to incorporate brand strategy, thus allowing brands to become the core power of business development through unique brand positioning, proper brand expression and continuous communication so that enterprises can move ahead in the competition.
Compared with traditional businesses, for such new businesses like investment consulting, asset management, direct investment and security financing, professional service capacity is needed. However, it is a hard choice for customers due to their lack of understanding of the capacity of professional service. At the moment, brands can play a crucial role – they can help enterprises establish differentiated cognitive abilities and thus win the trust and preference of customers. Therefore, in the period of industry transformation, securities companies, while making greater efforts to raise customer demand, shall focus on strengthening brand building and seize the opportunity of new businesses by brands.
Banking The financial crisis had a severe effect on many internationally, renowned banks. Given this opportunity, China’s banking industry has been accelerating its international development. However, domestic banks will not change their status or consider the mainland to be their “main battlefield” in terms of transforming economic development of the State. Their goal is to further achieve “careful and intensive cultivation” to meet the all-around competition of foreign banks in the Chinese market. As the Central Bank strengthens liquidity management and credit control, domestic banks need to enhance financial innovation, rapidly develop intermediary business and promote continuous optimization of both business and profit structures. As intermediary services require less for such “tough targets” as interest rates, limit and number of outlets, they will conversely require more for such “soft power” as professional competence and customized services; the support shall be won from many brands for intermediary services. Therefore, domestic banks need to
deeply explore customer demand, make the targeted response through brands and in turn, win the preference and loyalty of customers. Many domestic banks aim at “constantly expanding the scale and realizing nationwide operation,” yet they will obtain negative results if they indulge in the pursuit of size instead of their own features. According to the successful experiences of American Express and Wells Fargo, the operating philosophy of “Small but Beautiful” can also win the favor of the market over the “Large and Comprehensive” approach. The financial services of small-sized enterprises and rural areas, currently supported by the State, provides banks which lack size with the opportunity of achieving the “Small but Beautiful” mentality. They do have the opportunity to construct core competitiveness based on a specialized segment of the market and to make use of brand to differentiate themselves from competitors.
Interbrand Best China Brands 2011
Real Estate Ruby Wang
Senior Strategist, China
Based on Intrinsic Requirements and Stick to Brand Proposition -the Inspiration of Real Estate Industry in 2010。 Over the past year, China's real estate market has undergone the most stringent regulation in its history and the whole industry continues to face deep adjustment. The real estate companies focused on high turnover and greatly promoted product sales to seize market share, while home buyers were increasingly cautious, are taking a “wait-and-see” approach. As people tend to be more rational when purchasing homes, the real estate enterprises with strong brand competitiveness are taking this opportunity to capture more market share. In the end of 2010, Vanke exceeded the 100 billion RMB mark in global residential sales by breaking the original benchmark and became the industry leader. What kind of customer recognition and brand is needed for such an enviable market performance? For the past three decades, it has adhered to the human-centered idea of experiences and insights of life as the principle of construction and service. In this sense, Vanke’s brand can always pull its determined weight in any market environment. When customers can personally experience all the user-friendly details, naturally, they will express constant wariness judging on the value. Poly Real Estate, which ranked second in annual sales performance for 2010, (its annual sales rose by 53% to 66.3 billion RMB) launched a new service brand: "harmonious home” in the same year, which triggers nostalgia of courtyards. This aims to further disseminate the service spirit of harmonious, cozy and affectionate solitude in communities. In recent years, Poly has maintained its strong business performance by continuing to stick to its core brand philosophy of incorporating traditional Chinese culture, which nourishes the wisdom of branding, after the continuous collisions with the needs of the times. Likewise in 2010, China Overseas Estate, “the Engineering Leader”, reflected on the incompatibility between population growth and resource consumption. They developed fifth-generation, top-quality products focused on the promotion of low carbon. They have always maintained a pragmatic and stable attitude and devoted themselves to the pursuit of quality products with the brand idea of "timeless top-quality". The product promotion
resulting from the trend of the low-carbon era, undoubtedly pours new brand power into the concept of ‘Top-quality’. As we can see, these enterprises which steadily forge ahead, have the ability to adhere to composure in the midst of restlessness; they have faith and they are constantly pouring new ideas in line with the new era. This is the insistent power of the brand. When people attach importance to practical value with the rational regression of the market, realize real feelings with the entire mind, and persistently respond to the intrinsic requirements of construction users, then inevitably, they are on the right road to ever-lasting brand prosperity.
Energy Lawrence Chen
Senior Strategist, China
Energy is closely interrelated with national security, industrial structures, and our daily life. It has an extensive range in terms of energy forms and types, like oil and coal. It also includes public utilities like: gas, electric power and water. Moreover, new energy, which has been developing rapidly over the years, includes solar energy, wind energy, biomass energy, nuclear energy, geothermal energy, hydrogen energy and other forms which are included in the scope of big energy industries. On the other hand, in terms of the value chain of the energy industry, mining and excavation, generation, transportation, distribution, storage, application, management and regeneration also involve the complicated technology and wide-range scientific applications. The energy industry in China is witnessing a period of dramatic change. With the scarcity of traditional energy sources and serious effects on the environment, energy development and energy efficiency improvement draw more and more scrutiny; especially, technological advancement and the market application of new energy. New energy can serve as a supplement to traditional energy as well as effectively reduce the influence on environmental safety. Even though the development and use of renewable energy and new energy sources started relatively late in China, a series of supporting administrative rules and measures (Law of Renewable Energy in 2006, and energy policies during 11th Five –Year Plan) issued by the government stimulated, encouraged and promoted rapid development of new energy. The scale of energy production and the range of energy use is expanding throughout the whole energy industry.
The energy industry is gradually developing from a manpower resource and capital-intensive industry into a skill and knowledge-intensive industry. Today, “brands” have becomes more important and sometimes even key assets. Companies in traditional energy industries, such as SINOPEC, CNPC, CNOOC and Shenhua Group Corporation, those in public utility fields, such as State Grid, China Southern Power Grid, Beijing Gas and Towngas, and the new energy solutions providers, such as ENN, Goldwind, Suntech Power and Yingli Solar, are all exploring to build the overall strength of their brands. Jumping from traditional thinking models and placing more emphasis on customer communications, they strive to win greater market penetration. Interbrand made the following conclusions based on observations and analysis of branding development throughout the energy industry: 1. “Brand” will become the language describing the future of the energy industry. We are in a new era to define the “New Energy” industry. In this historic moment, energy enterprises describe the whole picture of better life through “Brand” and interpret their important role in the new energy industry. 2. “Branding” is used to guide society to accept new energy concepts. To grasp the opportunity of industry changes and coming trends, as well as to enhance the authority, energy enterprises started to change their previous communication channels, which only relied on transaction businesses. They will now start using branded communications to highlight the benefits to society. In addition, they will effectively integrate the value proposition of the brand and energy theory to educate society to gradually accept new energy concepts. 3. Customers’ decisions rely more on the understanding of the “brand.” The energy industry is developing in a more complicated and abstract way and more and more traditional energy enterprises are devoting themselves to clean energy, solar energy, biomass energy and energy services. Therefore, more efforts shall be made on branding to establish communication with customers, partners and even the public to improve the role of brands in the decision-making process.
4. “Branding” of the energy industry will bear more responsibilities for social services. As the consciousness of health, environment and safety (HES) management grows, the“brand” of the energy industry will bear more responsibility for social services. Establishing a foundation, developing research sponsors, promoting a green economy, providing community education and carrying out sustainable development can strengthen the master brand of energy enterprises. In terms of business communication, the energy industry is a very typical B2B model; therefore, enterprises will attach more importance to stable business relations with the government, large-scale customers and partners. However, branding communication differs from business communication, and as more emphasis is placed on the intrinsic and long-term demand of the core target population, expectations for an ideal energy state in the future will rise. The whole energy industry in China is reaching a stage of rapid development, but at their speed of development they will also have to think about how to improve the quality of their enterprises and their social responsibilities. Therefore, systematic brand building and more active market-oriented brand communication become tasks which enterprises cannot avoid. Only in this way, business development can be coordinated to aid a new round of development.
Apparel Maggie Ren
Senior Brand Consultant, China
The clothing market in China is currently undergoing drastic changes. On the one hand, rapidly developing market prospects means unlimited opportunity: as the middle-class grows and expands, consumption generated by the integration of personal consciousness, consumerism and social circle leads to the unprecedented increase in demand of personal identity expressed through clothing. The clothing industry is expected to become a giant market with 1.3 trillion RMB in sales projected over the next ten years. Facing the future “ten golden years,” Chinese clothing enterprises are eager to make their own mark, eventually solidifying their place in the fashion market. On the other hand, the future is full of variables and uncertainties. As we begin to see many of the international traders swiftly enter into tier-II and tier-III markets, consumers’ fashion aesthetics and consumption experiences are undergoing deep changes. Mainstream fashion has developed into a more mature style. Affected by the impact of emerging fashion networks, consumer demand is increasing. As a result, questions are being raised in response to this rapidly emerging movement. What can brands do for the long-term success of such enterprises? How can we keep up with the ferocious appetite of consumers? Should we still attract the attention of consumers by building retail experiences with trendy styles, constantly launching faster, and more novel products, dazzling brand advertisements, celebrity endorsements and television advertising campaigns? Maybe, we can ponder the effects of “VANCL” which flourished out of nothing.
1. It would be better to directly relate to consumer’s current
3. While the traditional marketing channels do a good job in
mindset and lifestyle than to make assumptions on their life status
pushing ideas, online interaction and public participation provide
with advertising, thus creating a brand proposition with attitude
new possibilities for brand loyalty and passion. Brand
and value. Especially, the post 80’s and 90’s generation whose
communications have increasingly become a powerful outlet of
personal awareness and attitude towards consumption has
free speech, which can no longer be denied. In the future, it should
reached a historic stage. They are willing to mark their own
be good to invest in online channels for both communication and
attributes with consumption and corresponding to their value
sales purposes.
concept is the vital point by which to determine whether a clothing brand will play a role in the industry’s more segmented future.
Predictably, when product lines expand, communication channels become more three-dimensional and the levels of communicating
2. The success of a brand does not rely on the fast launch and
information grow more complex; the competition grows and
innovative design of the products of the season, but rather
intensifies. The brand image can either make or break the business;
conveying the essence of brand so that design style relates to
it all depends on whether the brand is the “red thread,” core,
people’s demand. The success of a brand does not rely on
through the business.
advertising placement or celebrity endorsement, but rather the consistency between the ideal worlds in advertising and the real world experience in the store. As a matter of fact, distribution, products and retail environments will experience the flow process, which starts with the brand and ends with the brand. This means that each detail will become the experience concerning the brand after merchandise, to reflect core messages of the brand and finally reaching positive brand association. Therefore, marketing on and off the line, product development, shop displays and story advertising shall center on the brand to form a circular theme so as to follow in a proper sequence and achieve organic growth.
Interbrand Best China Brands 2011
Sports wear Compared with other types of clothing, sports wear brands made in China seem to be more successful. Li Ning is currently the second largest sports wear brand in the Chinese market, surpassing Adidas. Also, Anta is currently valued at over 30 billion RMB and has ambitiously declared a plan to open 10,000 shops. The industry considers this quite normal for double-digit growth. However, if we review the superb sales figures concerning sporting good brands made in China over the past few years, most companies have selected to keep away from the mainstream nature of international brands. Instead, these companies have taken a different business approach by “using the rural areas to encircle the cities”. These Chinese brands choose to grow their business in public markets rather than establishing brands in professional markets –to achieve success by proposing sports-irrelevant brand propositions rather than offering professional benefits. At any point, should international brands decide to enter into the tier-II, tier-III and tier-IV markets, local brands will be threatened as a result. Someone once described what makes local brands worried: although consumers buy the local brand, they are still thinking of the international brand; once the budget is not a problem, these consumers will turn to international brands sooner or later. In fact, celebrity endorsements, TV advertising and rapid expansion of franchises and outlets have become the one and only way to push digital growth of sporting goods brands made in China. The high cost of advertising maintains growth prosperity and delays the uproar of sporting goods brands made in China. However, it overdraws rational construction of local brands. What have sporting goods brands made in China accumulated over all these years? As advertising replaces technological innovation and unique design style, local have brands always drifted towards an empty inner brand core which lacked sufficient brand support factors.
The brand cycle of “belief” and “action” is the core problems local brands have to face. In terms of sports belief or philosophy, sporting goods brands made in China need to make a rich and close connection with the public. Li Ning’s tagline, “Make the change”, finally gets rid of embarrassment and accomplishes the change of “from daring to think, to action”. Besides a magnificent slogan-change, news conferences and a round of advertising releases, what really matters is that Li Ning learned how to translate brand spirit into real, professional and daily story. The key is to convey the message of deep meaning in the brand so that people can develop all kinds of associated images of different sports states or life philosophies. This will help a brand move and win the favor of the consumer. Action, technological breakthroughs, star products and the real impulse to engage in sports are the necessary coming-of-age scenarios for developing truly great sporting goods brands. Chinese sports brands will gain success with the progress of Chinese sports, including sponsoring outstanding athletic fields in China’s Sportsdom, focusing on the differentiated sporting talents of Chinese people, and making true contributions through technological breakthroughs. Proven success came from the rise of Nike and Adidas. This could pave the way for sporting goods brands made in China to achieve long-term success. Here is an interesting comparison: in 2010, when Anta was full of confidence in promoting its annual highlight - elastic rubber, Li Ning carefully explained why it had only a 5% shop growth plan. Leaders of local brands began to remove the process of single handedly relying on extensive growth and attaching more importance to intensive growth. Maybe the future is full of variables, but “Keep Moving” can always “Make the change”.
Interbrand Best China Brands 2011
Automotive Eric Shao
Associate Director, Strategy, China
Chinese auto brand – Making Chinese Lantern There has been a great leap for China’s automobile industry. It is projected to be the largest auto market in the world. The momentum is triggered by huge demand, favorable government policies and the strong foundations of the industry as a whole. As the miracle continues, more and more Chinese brands will arise following their predecessors – Geely, Chery, Greatwall, and BYD. They have come at a perfect time. Why? IMarching to the Quality of Growth When Santana brand was introduced to China in the middle of 1980’s, the industrial foundation of China’s auto industry was still in the era of the 60’s. From assembly line to all kinds of auto parts (windshield, lights, seats etc), there was almost nothing available domestically. However, 30 years later, China has developed a few huge auto industrial clusters, where hundreds of OEMs are established and low cost labor is readily available. The whole industry was built with the prerequisites of large scale production, huge domestic demand and the development of modern management. Cost leadership and national networks require the strategy of being big, while modern management is a must. All of this is the result of competition, because lean manufacturing, automation and logistic distribution are the source of competition and manufacturing management is the most critical part. Lack of core technical competence Without the patents and knows-how, making a car resembles a Chinese lantern – it is beautiful outside but it is just made of different pieces and materials inside. Likewise, China’s automobiles such as the passenger car, truck, and coach are assembled with the parts from same OEMs and even the exterior part has a very similar look. Lack of differentiation encourages price wars and tightens the margin of auto manufacturers. When there is a product defect, customers have to come to OEMs for help or claim. Particularly for trucks and coaches, engines, chassis and transmission – the technology is controlled by OEMs. Now, Chinese brands are looking for the technology all around the world. M&A seemed like a viable quick solution. For example, Geely acquired Volvo, but their attempts failed in the case of Rover and Saab．
Laggard behind after service After sales service is a very critical part and important source of revenue. It also contributes to brand recognition in the automobile business. Global car brand’s after-sales service is able to sell 2nd and 3rd cars to customers and is part of their business strategy. After-sales service is not a matter of quantity nor is it about the completion of the service range, after-sales is about the brand experience for customers who care about the brand’s promise throughout the entire journey such as repair, maintenance, insurance, re-sales, finance, training etc. Chinese car brands have neglected the importance of after-sales service. Even though they have their slogan hung above their work shop –“Customers first”, customers do not believe it so Chinese car brands loose to independent stores or small repair shops.
Lack of creativity in the ads Local brands are proud to introduce brands with connections to western heritage, or imported technologies, and even in some cases, some unbelievable technical features. As matter of fact, this phenomenon reflects embarrassing situations because Chinese brands do not have car culture and consumers are not very sophisticated. Lack of creativity is not the true weakness in the automobile industry. It indicates that Chinese car brands do not understand their customers and their needs. Even though Chinese car makers did research on their customers, they have neglected their feelings and did not meet their needs. A car is not an indicator of transportation and social status, but represents many things from culture to the lives of their customers. Next milestone The future of Chinese car brands is splendid especially after seeing the models which recently debuted at Shanghai‘s show. The journey is long and it is just the beginning for Chinese brands, with new arenas to compete and challenging global rivals such as green energy, environmental protection and public transportation.
Interbrand Best China Brands 2011
FMCG Doris Ho
Head, Consumer Branding, China
Safety issues continue to plague the fast moving consumer brands this year as many of these companies that made the Best China Brands table this year saw their standing fall from previous years. With the exception of Tsingtao, their brand value also declined across the board.
Chinese consumer brands tend to invest heavily on a single core brand and stretch it across as many products and categories as possible. With a vast domestic market, it is a viable strategy for swift market expansion; however, there is a limit to how much a brand can be stretched meaningfully.
This fall in ranking and value are due to several factors:
As a result, Chinese consumer brands tend to be regionally focused and do not reach significant business scale.
Consumers in China face safety challenges in many aspects of their lives – from sub-standard processes, poor ingredients to even harmful substances – there have been scandals linked with many products, especially in food and beverage categories. While they are still stoically consuming, there is general skepticism as it is a market environment where even reputable brand names are not a guarantee of quality. This has a tangible impact on market value with share prices performing lower. Against this background, consumer brands are viewed more critically: How fast are they at addressing consumers’ crisis of confidence? (Responsiveness); Do they articulate a clear direction or show transparency in their operations? (Clarity); Do they hold true to the same values and standards that consumers can rely on? (Consistency); These aspects are directly reflected in key components in our brand strength analysis. For consumer brands, they face a tougher job in building brand reputation with consumers. In China, product or brand claims that are not substantiated sufficiently, or are too broad are seen as exaggerated and unbelievable. It is a delicate balancing act for brands in creating differentiation from competition, and evoking desire from consumers, while maintaining credibility. Chinese consumer brands are also limited by their portfolio of products and brands. Their products and brands are often focused on a single product category. This puts their entire business at risk if their product, and therefore the whole category, faces a crisis. Even as they diversify, they are still doing so within the same product category. Mengniu, for example, has created a more premium milk range under an independent brand, Telunsu, with no visible link to the Mengniu brand; this has however, still not helped diversify their revenues and risk significantly from their core brand. Can we expect to see more consumer brands on future Best Chinese Brands’ charts? There is certainly high potential, but this may require a change of mindset and strategy for local consumer brands.
This is a risky strategy in many ways; brands become over-leveraged and extended to a point where familiarity, and not relevance, becomes the key driver for purchase. International brands, with more focused product portfolios and brand strategies, can then quickly snatch market share from them through stronger emotional engagement with consumers. Chinese consumer brands need to switch from building capacity to building real brands. This includes an evaluation of how they could build their business around a broader brand portfolio, rather than just one or two single brands. This is especially helpful in tackling the diverse regional needs of the vast Chinese market a broader portfolio of brands will allow for climate, taste and lifestyle differences. If you take a walk down a supermarket aisle in China, you will see many popular local brands in every product category. Many of these local brands, however, have already been acquired by international companies. These acquisitions do not seem to be ceasing with Nestle’s recent plans to acquire Hsu Chi Fu – a move that will net Nestle a significant amount of market share in China. These acquisitions play a strategic role in the localization of the brand and business strategies for international companies in China. This is achieved through a broad portfolio of both international and local brands that cover different price tiers, as well as different target audiences across each price tier. Chinese companies are also acquiring international brand names as well in a reversal of roles (Bright Foods is in the process of negotiating a stake in Manassan Foods Australia). These acquisitions may be primarily motivated by international technical and knowledge acquisition, as well as by the acquisition of new global brand assets, at the moment; however, it is also hopefully also going to lend to scale and portfolio range that would see more Chinese consumer brands making their way into the Best Chinese Brands’ league table within the next few years.
Interbrand Best China Brands 2011
How to improve brand strength: BBS Index Introduction & Comments Derek Huang
Senior Strategist, China
Today companies value brand strength more than ever before. In the past, due to segmented market responsibility and pressure from such evaluation indexes as ROI or brand perception, many brand owners sidestepped some basic principles of brand management. These results confirm the fact that many brands are currently subject to consequences from short-term targets. For example, some Chinese brands in the food industry merely focus on how to launch eye-catching products and obtain more market shares while overlooking quality issues, which are the cornerstones of building brands. Interbrand Brand Strength Score consists of 10 indexes, which are equally important for generating brand value. We use this score system to calibrate essential focus on brand management. It covers nearly each aspect of brand management such as employee, product, positioning, channel, communication, partnership, etc. making it is an important approach to accurately understand brand strength management and evaluating brand value.
Interbrand Best China Brands 2011
Commitment
Protection
Clarity
The heights to which a brand is held in
The approach to securing the brand across a
What the brand stands for in terms of its
organizational decision making. The extent
number of dimensions: legal protection,
values, positioning and proposition. This
to which the brand receives support in terms
proprietary ingredients or design, scale,
must be articulated so that everyone knows
of time, influence, and investment.
geographical spread, and CSR initiatives.
it when they see it or hear it.
One recent survey for the banking industry
Chinese brands are going through great
Generally, good brands can facilitate clear
shows that the brand satisfaction of “small”
challenges with regards to brand protection.
and consistent association. To some
banks is generally better than that of “big” banks
Whether it be naming, patent and product
extent, clarity measures how and to which
in China. Moreover, the brand images of small
redefinition necessary for going global,
extent the brand and its owner defines its
banks are more clearly perceived than those of
escalating M&A battle in domestic market or
target group. Only when the requirements
big banks. This highlights the great gap in terms
SNS tracking in this new era, brand owners
of the target group are clearly understood
of the focus on brands among various banks.
are inevitably facing the problem of how to
can we build powerful brand. This means
For example, China Merchants Bank has always
effectively protect their brands. This involves
that our communication and other
been pursuing its well-accepted brand
many legal issues, as well as the test of skilled
business activities (like product, personnel
philosophy of “We are Here Just for You” and
and capable brand management.
and channel, etc.) should clearly respond to the requirements of target group.
using new products and media to promote this idea. Positioned as “Your Wealth Management
When thinking globally, the practices
Therefore, brand managers should not
Bank”, the Bank of Communications has been
adopted by the Apple brand may be the most
only fully and clearly interpret the brand
striving to seize better opportunities. Through
enlightening case to study. Apple not only
meaning, but also provide brand
recent investment in its brand, Shanghai
highlights its product series by naming the
understanding for and discuss relevant
Pudong Development Bank is striving to build
products as “i+ category name”, but also
application with each business unit, so
an advanced international brand image and
legally registers specific product names, such
that they could have adequate clarity
provide helpful services by following the
as “iPad”. It is even trying to register all the
about the brand.
concept of “New Thinking and Hearty Service”.
products under its brand – from the ipod prototypes to the desktop icons of its
PING AN is well positioned to build a “globally
It is great to see that most renowned
operating system. These early protective
leading comprehensive financial service
Chinese companies, in all sectors besides
measures not only eliminate copycats, but
brand”. Guided by this concept, PING AN
the banking sector, are becoming more
also build loyalty from Apple customers.
actively integrates different brand
and more committed to their brands. We
positioning of newly merged and established
believe that this is not only brand owners’
business units and uses a uniform brand
passive response to fierce competition
image for external communication. In
both foreign and local, but also their
contrast, when expanding globally, some
strong will and initiative. One notable
Chinese companies have a rather vague
point is that some excellent B2B brands are
understanding of brands or even let go of
taking the lead in brand commitment.
brand development, thus the original brand value is gradually diminished.
Interbrand Best China Brands 2011
Responsiveness
Authenticity
Relevance
The ability to respond to change or
The notion that the brand is soundly based
The fit with customer/consumer needs,
proactively create opportunities that is
on an internal truth and capability. It has a
desires, and decision criteria across all
driven by a sense of leadership and a desire to
defined heritage and a well grounded value
demographics and geographies.
constantly evolve and renew itself.
set. It can deliver against the expectations that customers have of it.
In a fast-changing world, brands should be relevant to the needs of target customers,
The challenges brought by the electronic technology industry today best illustrate the
As the basis on which a brand is built,
which entails well-segmented and
role of brand responsiveness. With the fast
authenticity is also the origin of customers’
positioned target strategies. For example,
development of smart phones, especially
confidence. Although most Chinese leading
targeting to the needs of different
new rounds of upgrades driven by the
brands have long histories and good
segments, TSINGTAO Beer has introduced
emergence of such brands as Samsung and
reputations, the fear is that some Chinese
different product series, so as to grab the
HTC, customers’ interests have been
brands seem to dilute their authenticity. For
attention of each customer. Recognizing
undergoing some dramatic changes. Change
example, since last year, some Chinese
the continuously upgrading needs for
always means that new opportunities will be
brands in the food and dairy sector have been
quality and exterior design in the home
created. Excellent Chinese brands as Lenovo
under the greatest criticism due to food
appliance sector, HAIER has been striving
and HUAWEI have seized these
health and safety issues. Once confidence in
to build high-end sub-brands and achieve
opportunities in terms of new technology to
a brand is disrupted, it is extremely difficult to
good performance in terms of relevance.
build their own smart products so that can
rebuild the brand. In addition, as smart phones and tablet
march forward and become global brands. Similarly, for expansion or even
computers are becoming increasingly
Meanwhile, in the internet industry, cloud
cross-industry expansion, brands will
popular among Chinese customers, many
computing has become the next,
inevitably face some fundamental
Chinese brands in banking and internet
world-wide focus. Chinese internet brands
challenges. If these challenges are improperly
sectors etc. have set up appropriate terminal
like BAIDU and ALIBABA have been moving
handled, the brand will give limited impetus
platforms. These measures can help promote
toward this direction.
to new business, or even result in breaking
brand connection with target groups.
brand confidence for original business. However, for these brands highly connected with science and technology, it will be the brand managers’ next key issue to effectively integrate responsiveness of technology with the brand so as to keep pace with, or even anticipate, customers’ needs.
Interbrand Best China Brands 2011
Understanding The brand is not only recognized, but there is an in depth insight of its distinctive qualities among customers and employees. Understanding means that the customer will not only choose your brand, but also properly help to promote it. For example, almost every liquor drinker can tell the difference between MOUTAI and WULIANGYE. This is closely related to continuous publicity and experience of these brands. YUNNAN BAIYAO is a well-received brand among customers because it integrates traditional Chinese medicine and updated modern medical technology. When experiencing the product’s efficacy, customers remember the brand, YUNNAN BAIYAO. Based on good brand knowledge, YUNNAN BAIYAO achieved great success in promoting products based on its brand philosophy.
Consistency The degree to which a brand promise is experienced without fail across all touchpoints or formats. When it comes to consistency, we can easily refer to the retailing and hospitality industry, as both industries are in the greatest need of maintaining a consistent brand image and are susceptible to the pressures of complex local markets. As a representative retailing brand in China, SUNING has adopted various store types for different markets and plans to expand into 3rd and 4th-tier cities or even town market. With such plans for the future, maintaining a consistent brand will be a major challenge for SUNING; however, considering complex markets does not necessarily disrupt brand consistency. For example, McDonalds launched special products in different markets to fit local taste, as brand consistency was discovered in this diversity; the preferences of young people is now recognized in different markets. Consistency is also reflected through various point of contact. Like NIKE, the brand statement behind the tick logo can be quickly updated overnight while maintaining great consistency by using various touch points, from advertising to websites and from products to stores.
Presence
Differentiation
The degree to which a brand feels omnipresent and is talked about positively by consumers and customers, opinion makers in social media and employees.
The degree to which consumers/customers perceive the brand to have a differentiated positioning distinctive from the competition.
The emergence of social media is a good opportunity to promote brand presence. Customers today are more inclined to share their opinions about brands through the Internet, which can help quickly build brand influence as well as expose brand issues promptly.
Be it in banking, home appliances or the apparel sectors, many Chinese brands are developing unique differentiators. For example, this year GREE has taken the initiative to launch its brand appeal as “core technology acquired,” to seek differentiation in the homogenous home appliance market.
For better or for worse, this is an era of mass information and complex communication. For brand managers, the Internet was seen as a channel through which to “push” information to certain target customer groups in the past, but today, it has become an open platform where customers and anyone else can talk about products, business and brands. For most people, the Internet is perhaps the (only) means through which most people are associated with certain brand for the first/second time or consistently. Brand managers should fully understand that a brands’ target group is the same whether online or offline. Though SNS has quickly become a critical component of brand strategy, it is still a tool for personal and professional communication, and brand strategy itself is the key response to a business challenge. SNS tools should be consistent with the brand and business strategies.
However, many Chinese brands still focus on relatively internalized and vague publicity on such things as “large-scale and quality”. This will not only make it difficult for customers to make purchasing decisions due to vague brand differentiation, but also pose constraint on the direction of future business growth.
Interbrand Best China Brands 2011
Authors and Key contributors
Contributors
Jez Frampton Group Chief Executive Officer
Andy Payne Global Chief Creative Officer
Jonathan Chajet Executive Strategy Director, Asia-Pacific
Stuart Green CEO of Interbrand Asia Pacific
Katie Zhou Managing Director, Beijing
Lawrence Chen Senior Strategist, China
Thomas Chen Executive Director of Strategy, China
Ruby Wang Senior Strategist, China
June Cao Strategy Assistant, China Echo Zhang Brand Analyst, China A very special thanks to the valuation, analytics and design teams that contributed to 2011’s Best Chinese Brands report. In particular, thanks to Nik Stucky, Sean Mead, Jennifer Bassett.
Contact Chuan Jiang Creative Director, China
Maggie Ren Senior Brand Consultant, China
Doris Ho Head, Consumer Branding, China
Simon Meng Brand Consultant, China
Eric Shao Associate Director, Strategy, China
Haohao Zhou Strategist, China
Derek Huang Senior Strategist, China
Gloria Yan Associate Strategist, China
Tim Yi Senior Designer, China
Audrey Guan Verbal Consultant, China
Chen Chen Designer, China
Giulia Chiara Rocca Associate Strategist, China Echo Xie Associate Strategist, China
Thomas Chen Executive Director of Strategy, China Email: Thomas.chen@interbrandcn.com Tel: +86 21 61925212 Address: Unit 902, Ascendas Plaza, 333 Tian Yao Qiao Road, Shanghai 200030 P.R.China Eric Shao Associate Director, Strategy, China Email: Eric.Shao@interbrandcn.com Tel: +86 21 61925215 Address: Unit 902, Ascendas Plaza, 333 Tian Yao Qiao Road, Shanghai 200030 P.R.China