China’s top ranked corporate brands say a lot about the economy and how it’s changing
New economy companies including NetEase, WeChat and Alibaba are among the fastest growing mainland brands this year, although the top household names are still dominated by established banking and oil companies, according to the latest report of Brand Finance released on Wednesday.
Stock brokers said the trend highlights the need for the local stock exchange to implement reforms to attract new economy companies to list in Hong Kong.
According to Brand Finance, a British company that tracks the financial value of different brands in terms of revenue, customer loyalty and licensing fees, the most valuable Chinese brand in the top 10 remains China Mobile with a value of US$49.81 billion. Rounding out the top five are the state-controlled banks China Construction Bank, ICBC, Agricultural Bank of China and Bank of China.
“Chinese banks are moving beyond provision of basic banking services and are investing in their brands, they are performing well on customer brand equity measures such as familiarity, consideration, preference, satisfaction and recommendation, leading to some of the highest scores in Brand Finance’s Brand Strength Index,” said Alex Corringham, consultant at Brand Finance.
Among other high scorers, oil giant PetroChina ranked sixth, China state Construction Engineering was seventh and Sinopec eighth.
But new economy companies that conduct e-commerce, social media and online gaming ranked as the fastest growing, as their values shot up between 50 per cent to 100 per cent on year, compared with only 4 per cent brand value growth for China Mobile and 42 per cent for CCB.
Mainland e-commerce giant Alibaba, which ranked tenth, saw its value shoot up 58 per cent to US$18 billion. Jack Ma, founder of Alibaba, said in a statement in the report: “As the economy goes down, people look online to Alibaba to buy cheaper things”.
Ma earlier in November told the Post that the local listing regime is outdated and could not meet the needs of new economy companies.
Hong Kong Exchanges & Clearing chief executive Charles Li Xiaojia last week said he would consider ways to attract more international and new economy companies to list in Hong Kong.
Christopher Cheung, lawmaker for financial services sector, also echoed the view.
“All the top biggest banks have listed in Hong Kong but many of the new economies such as Alibaba and Netease are listed in the US. It is obviously Hong Kong needs to catch up,” Cheung said.
Hauwei Technologies, the mainland smartphone maker, ranked the ninth, but the value of its brand was up 70 per cent year on year to US$19.74 billion.
NetEase, the country’s second-largest online video game service provider, is the fastest growing, with its value doubling to US$3.64 billion in the past year thanks to popular games such as the Westward Journey series as well as e-commerce and other internet tools. NetEase ranked 48th this year, up from 76th last year.
WeChat, the country’s most popular social messaging application, has seen its ranking jump to 27th this year from 37th last year, with its brand value up 83 per cent to US$6.5 billion. Brand Finance said the user growth has remained consistently strong for the company which has added up to 50 million new users every quarter since 2012 with the total now around 850 million.
As a result, advertising revenue is soaring; revenue for the third quarter is up 51 per cent on the previous year at US$1.09 billion.
“WeChat has become the default communication method for the majority of people in China and is rapidly gaining ground across the world. Consumers’ relationship with WeChat is more profound than other brands. They see it throughout the day and it is the way that they engage with many other brands, their friends and family and the wider world. As such it commands almost unrivalled awareness and loyalty,” the Brand Finance report said.
Among companies suffering a setback, jewellery retailer Chow Tai Fook saw its brand value drop 16 per cent to US$3.7 billion, as China’s economic slowdown negatively impacted the luxury sector.
“China is already a long way down the road towards achieving successful brands in its companies and products,” Brand Finance chief executive David Haigh said. “There seems little doubt that President Xi Jinping intends to strengthen both the China nation brand and individual commercial brands, enabling China to compete globally on a level playing field with US and EU brands.”
Alibaba is the owner of the South China Morning Post.