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Brand values on the increase in stock market

By Wu Jiao (China Daily)
Updated: 2007-05-17 08:58

The robust stock market has spurred a sharp rise in the brand equity of the country's private companies, according to a list of the "Top 50 Most Valuable Privately-held Chinese Brands" released yesterday.

Ping An Insurance, for instance, with a value of $3.18 billion, ranks second on the 2007 list: In 2006, it didn't rank at all.

Similarly, this year's No 3 spot goes to Zhejiang-based beverages giant Wahaha, which saw its brand equity rise to $1.87 billion in 2007, from $570 million a year earlier.

Topping the list is telecom giant Huawei, which, after several major acquisitions of foreign competitors in recent years, has seen its brand equity grow to $3.64 billion.

The Hurun Report of the country's top privately owned brands was launched in 2006. It is produced by Briton Rupert Hoogerwerf.

Companies involved in the Internet, real estate and clothing sectors occupy 20 of the 50 spots on this year's list.

Hoogerwerf said that although a number of Chinese companies, such as Haier and Lenovo, have managed to make the list of the World's Top 100 Brands, most Chinese firms still put marketing and network building ahead of branding in terms of their overall development.

"We want to promote the need for developing brand awareness among Chinese firms," Hooogerwerf said.

However, some experts have warned that the list does not give a true reflection of companies' competitiveness.

Xu Yangming, dean of the Brand Research Institute of the Shanghai-based Jiaotong University, said: "This listing measures a brand's current equity. But a firm's brand, or core, competitiveness is a much better measure of future brand development."

Xu also said that most Chinese enterprises lack a systematic brand strategy, and that brand characters change each time a new branding consultancy is appointed.

"This often leads to brands having only a short lifespan," Xu said.

Xu said that most Chinese private firms rely too heavily on media advertising, while their international counterparts have managed to set up integrated teams to build brand fidelity among customers.

"Unlike brands like Armani, which have won the hearts of the world's rich and famous, Chinese brands don't have a soul," Xu said.

Although some Chinese brands have more than a thousand years of history, most actual branding operations did not start until the end of the 1970s.

Although based on consumer research, the Hurun Report brands listing also uses financial data to calculate the earnings the brand is expected to generate in the future.

Alongside yesterday's list of the nation's most valuable privately-owned brands, Hoogerwerf also published the "Top 50 Most Valuable Domestic Chinese Brands".

China Mobile, with a value of $37 billion, topped the list, followed by ICBC and Bank of China.

With several of the country's big lenders going public last year, seven of the top 10 most valuable domestic brands were from the financial services sector.