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In turbulent times,
brand strength
protects and
propels the winners
David Roth
CEO
The Store WPP, EMEA & Asia
David.Roth@wpp.com
Twitter: davidrothlondon
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Consider these circumstances. An economy slows to 6.9 percent GDP growth from annual
growth of 10 percent or more during much of the past decade. The stock market reaches a
record high in June, loses about a third of its value by the end of summer, but ends the year up,
actually outperforming the S&P 500. These events are the very definition of market volatility.
And they describe the context for the 2016 BrandZ™ Top 100 Most Valuable Chinese Brands.
The events of China’s past year
provided the perfect crucible for testing
the fundamental principle behind all
of our BrandZ™ work, which is that
brand strength provides the fortitude
to endure the most extreme market
fluctuations and emerge successfully.
In these circumstances, would you
expect brand value to decline? Or do
you think brand value might creep up
slightly? Despite the difficult economic
challenges, the value of the 2016
BrandZ™ China Top 100 rose a healthy
13 percent.
Let’s adjust the lens so that we are not
focused on last year alone, but on a
larger timeframe that encompasses the
more than three decades since China
embarked on economic reform, when
the swells of industrial expansion lifted
a lot of brands. Even as the current
turbulence tossed some brands, the
ballast of brand strength stabilized
many others.
Here’s one demonstration of brand
strength: The MSCI China, a weighted
index of Chinese stocks ended 2015
10.7 percent lower than its level in 2010. Compare that result with the
performance of a stock portfolio
comprised of brands from the BrandZ™
China Top 100 with the highest scores
in Brand Contribution, a BrandZ™
measurement of brand strength. Over
the same period, the portfolio of Brand
Contribution leaders rose 103.5 percent.
Let’s pull back the lens even further
so we can begin to see the outlines
of future brand growth in China.
Today, the BrandZ™ China Top 10
still accounts for almost two-thirds
of total ranking value, a legacy of the
production-driven economy and the
central role of state-owned brands.
However, the BrandZ™ China Top 10
only grew 3 percent in value, while the
growth rate of brands 11-to-100 was
over 30 percent.
These faster-growing brands
predominately are market-driven, as
are nine of the 10 brands that entered
the BrandZ™ China Top 100 for the
first time. In other words, as China
rebalances to a consumption-driven
economy, the faster growing brands are
those that depend less on government
and more on effectively meeting
consumer needs in ways that are
Different and Meaningful.
THE UNPARALLELED CHINA
RESOURCES OF WPP
Which raises the question, how does
a brand best compete in this rapidly
changing Chinese market? That’s where
we can help. This sixth annual edition
of the BrandZ™ Top 100 Most Valuable
Chinese Brands represents a fraction of
the knowledge, insight, and expertise
available from brand experts at WPP
companies in China.
WPP is the world’s communications
services leader. Our companies have
been engaged in China for over 30
years. Today, 15,000 people, including
associates, work across China in Beijing,
Shanghai, Guangzhou and many other
cities. We provide advertising; insight;
branding and identity, direct, digital,
promotion and relationship marketing;
media investment management, retail
and shopper marketing; and public
relations and public affairs. It’s all part of
our global presence in 112 countries.
By linking all this talent, creativity, and
wisdom, we amplify global trends and
insights that help our clients in useful
and unique ways. We call this powerful
perspective “horizontality.” It includes
our unrivaled Brand™ resource library,
which we invite you to access. Along
with the BrandZ™ Top 100 Most
Valuable Chinese Brands, the library
includes these titles: the BrandZ™
Top 100 Most Valuable Global Brands;
the BrandZ™ Top 50 Most Valuable
Indian Brands; the BrandZ™ Top 50
Most Valuable Latin American Brands;
the BrandZ™ Top 50 Most Valuable
Indonesian Brands; and Spotlight on
Myanmar - the ‘Leapfrog’ Nation.
You’ll also find insights about the
Chinese market in these BrandZ™
reports: Unmasking the Individual
Chinese Investor; The Power and
Potential of the Chinese Dream; The
Chinese New Year in Next Growth
Cities; and The Chinese Golden Weeks
in Fast Growth Cities. To download
these and other BrandZ™ reports,
please visit www.brandz.com. For the
interactive BrandZ™ mobile apps go to
www.brandz.com/mobile.
The backbone of all this intelligence
remains the WPP proprietary BrandZ™,
the world’s largest, customer-focused
source of brand equity knowledge
and insight. It is big data at its biggest,
with 4.5 billion individual data points.
Using the BrandZ™ brand valuation
methodology of Millward Brown, a
WPP company, we analyze relevant
corporate financial data and strip away
everything that doesn’t pertain to
the branded business. Then we take
a critical step that makes BrandZ™
unique and definitive among brand
valuation methodologies.
We conduct ongoing, in-depth
quantitative consumer research with
more than 200,000 consumers
annually, across over 50 markets, to
assess consumer attitudes about, and
relationships with, over 100,000 brands.
Our database includes information
from over three million consumer
interviews. It reveals the power of the
brand in the mind of the consumer
that creates predisposition to buy
and, most importantly, validates a
positive correlation with better sales
performance.
At WPP, we’re passionate about using
our creativity to create and build strong,
differentiated brands that deliver lasting
shareholder value. To learn more about
how to apply our experience and
expertise to benefit your brand, please
contact any of the WPP companies
that contributed expertise to this report.
Turn to the resource section at the end
of this report for summaries of each
company and the contact details of key
executives. Or feel free to contact me
directly.
Go to www.brandz.com to learn more.
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