China’s top 100 storied brands lose 4.5 per cent of their intangible assets value as economic downturn weakens consumer demand: Hurun Report

Consumers, spooked by concerns about job prospects amid a bleak economic outlook, are hunting for bargains when they buy consumer goods, the study found
The top brands on the list include liquor distillers Kweichow Moutai and Wuliangye Yibin, drug manufacturer Tong Ren Tang and China Construction Bank

China economy

Daniel Renin Shanghai

Published: 12:30pm, 23 Dec 2023

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The value of China’s top 100 storied brands stretching from liquor to commercial banks dropped 4.5 per cent in 2023, battered by weak consumer sentiment and a gloomy economic outlook, according to the latest research by the Hurun Report.

The consultancy known for its China Rich List found that the intangible assets of the mainland’s 100 most successful indigenous brands with at least 60 years of history were valued at a combined 9.43 trillion yuan (US$1.32 trillion) in 2023, compared to 9.87 trillion yuan the previous year.

The decline resulted from deflationary pressure on the Chinese economy as sluggish domestic demand continued to plague the consumer market, said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai.

Total spending on fast-moving consumer goods – expendable items such as food and drink, or clothing – in China slipped 0.9 per cent year on year during the third quarter of 2023, according to a joint study released by global consultancy Bain & Company and market research firm Kantar Worldpanel earlier this month.

Consumers, spooked by concerns about job prospects amid a bleak economic outlook, continue to actively hunt bargains when they purchase consumer goods such as personal care products, the study found.

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White Rabbit, China’s beloved homemade candy, tries to modernise whilst maintaining tradition

“The time-honoured brands also fell victim to a slowing economy, but their great history could help them wade through economic turbulence,” said Han.

Brand value is measured by assessing the price premium it generates when compared to a similar but unbranded product or service.

The top brands on the list include liquor distillers Kweichow Moutai and Wuliangye Yibin, drug manufacturer Tong Ren Tang, roast duck restaurant chain operator China Quanjude, and China Construction Bank.

“They have brought a lot of inspiration to emerging brands,” said Rupert Hoogewerf, chairman and chief researcher of the Hurun Report. “It is important for the brands to learn how to retain age-long tradition and avoid being eliminated by the market.”

Durability, the value of the intangible assets and cultural heritage are the key elements accounting for the success of the brands, he added.

Yiyuanqing, a vinegar brand originating from Taiyuan, the capital of central China’s Shanxi province, has the longest history of the names on the list, at 646 years.

Some of the brands, such as the bigger banks, have helped shape China’s national economy during the past century, making it into the world’s second-largest economy today.

In recent years, guochao, or “China chic” – a term that refers to the growing enthusiasm for home-grown fashion – has benefited hundreds of Chinese companies as the mainland’s 400 million middle-income consumers spent heavily on beverage and cosmetic products under indigenous brands.

In June 2019, when the trade war between China and the US escalated, milk tea made by celebrated Shanghai confectionery brand White Rabbit sold at a premium of up to about 2,000 per cent, spurred by consumers’ sense of national pride.

Some consumers were willing to pay scalpers as much as 500 yuan for a taste of the milk tea, which normally sells for 19 to 23 yuan, since they had to spend more than two hours queuing for a cup of the famous drink.

White Rabbit’s milk-flavoured confectionery rose to global prominence in 1972, when then premier Zhou Enlai presented some to US president Richard Nixon.

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