Brand value increases across categories

Part 4 | The Fast Growing Markets
China
KNOWING MORE ABOUT
BRANDS, CHINESE
EXPECT GREATER
CHOICE
Internet, travel broadens perspective
WHEN IT COMES to brands, Chinese
consumers know more and expect more.
Access to the Internet and international
travel has widened their consideration
set of available products, services
and brands.
Mobile communications and word of
mouth helped spread this knowledge
throughout the country from the major
urban centers like Shanghai, Beijing and
Guangzhou to less prominent cities.
Chinese consumers have explored the
brave new world of products from the
West. They now want to mold it to
fit more organically into the 5,000
years of Chinese history and culture,
which preceded the last several
decades of explosive industrial and
technical expansion.
After years of climbing toward the middle
class, the Chinese are going back to the
future. A luxury logo must not only signal
wealth, it should assure quality and
craftsmanship. The ancient holidays are
not just times for increased consumption,
but also about restoring ancient meaning
and ancestral connections.
116 BrandZ Top 100 Most Valuable Global Brands 2013
These attitudinal and cultural shifts
correspond with the slowdown in the rate
of economic growth, a shift in national
priorities and the declared intention
of China’s new national leadership to
build a consumption-driven economy
and rectify the negative impact of rapid
development on the environment, product
reliability and food safety. In addition:
Value
Consumers are shifting from price
consciousness to value consciousness,
which will affect brands in all categories.
Luxury
Luxury brands are becoming more
differentiated as consumers regard
luxury not simply for the status it implies,
but also for the intrinsic craftsmanship.
Chinese brands
China will create more Chinese
products and brands, and not only in
the categories associated with China,
like traditional Chinese medicine.
China is becoming much like other
developed consumer societies where most
people, with adequate shelter and enough
to eat, seek higher meaning in their lives.
The difference—critical for brands—is
that this development will happen in
China in ways that are both the same and
different from the West. It will be Chinese.
Widening horizons
Last year, 70 million Chinese people
(more than the population of France)
traveled abroad. They returned with
expanded knowledge of products and
services and international brands. And,
for many Chinese people, international
travel yielded another important insight:
The growing realization that China
itself is capable of creating products
and brands.
These developments will impact international
brands in at least two ways: (1)
Consumers will expect more variety; and
Top 10 China
Category Brand Brand value
2013 $M
Brand value %
change 2013 vs 2012
1 Telecoms China Mobile 55,368 18%
2 Regional Banks ICBC 41,115 -1%
3 Technology Tencent 27,273 52%
4 Regional Banks China Construction
Bank
26,859 10%
5 Technology Baidu 20,443 -16%
6 Regional Banks Agricultural Bank
of China
19,975 12%
7 Insurance China Life 15,279 5%
8 Regional Banks Bank of China 14,236 10%
9 Oil & Gas Petrochina 13,380 11%
10 Oil & Gas Sinopec 13,127 -6%
Source: Milward Brown Optimor (including data from BrandZ and Bloomberg)
The luxury of
product safety
Insight
The problems with the environment
and food safety have hit hard. The
issue of corporate responsibility has
become real. We used to believe
that with money we could buy
ourselves out of these crises. Now
we understand that money isn’t
going to do that. We used to believe
that in buying premium brands we
were also buying peace of mind. As
marketers we’ve believed that quality
and safety are basic and that people
aspire to something higher. Today,
those basics—quality and safety—
are becoming luxuries.
Kaiyu Li
Head of Planning
Y & R China
Kaiyu.Li@yr.com
China
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