Alibaba crowned China’s most valuable brand

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Alibaba has been named China’s most valuable brand, knocking rival tech giant Tencent from the top spot on the annual BrandZ list.

Alibaba rose from second place in 2018 to snare the number one spot after boosting its brand value by 59% year-on-year to $141bn.

The move ended Tencent’s four-year run as China’s most valuable brand and capped off a challenging year for the company which struggled under the government’s crackdown on the gaming industry, particularly on new game licenses.

Tencent’s brand value grew just 4% year-on-year to reach $138bn. However, the tech giants maintain a significant lead on other brands with ICBC, China Mobile and Moutai rounding out the top five with values of $40bn, $39bn and $36bn, respectively.

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The annual BrandZ Top 100 Most Valuable Chinese Brands ranking, which is published by WPP and Kantar, revealed the total value of China’s leading brands increased 30% to $889.7bn. The 2019 figure is the highest annual rise since the ranking launched in 2011 and comes despite the country’s slowing economic growth and ongoing tension surrounding the US/China trade war.

The rapid development of China’s lower-tier cities and the increasing spending power of consumers from these areas of China is driving the growth of the country’s brands. This coupled with a growing awareness of Chinese brands internationally is also boosting value.

While entertainment, education and retail brand categories recorded the biggest year-on-year growth, technology brands remain the strongest led by drone company DJI, robot company UBTECH, smartphone brands Huawei, Xiaomi and ZTE as well as Lenovo.

Online video platforms iQiyi and Youku both recorded strong growth surging 158% and 136% in value respectively to reach 28th and 31st position on the list. Mobile services app Meituan ranked 13th with a value of $19.9bn while food delivery app Ele.me was 24th with a $7.3bn valuation.

WPP’s David Roth said: “China’s stock market volatility over the past year has provided a real-life stress test for valuable brands, which continued to outperform the market. Put simply, valuable brands deliver superior shareholder returns. $100 invested in the MSCI China Index in 2010 would be worth around $128 today. That $100 invested in the BrandZTM China Top 100 would now be worth $211.

“The threshold to enter the BrandZ China Top 100 has more than doubled from $311 million in 2018 to $681 million in 2019, demonstrating the continued pace of growth for Chinese brands increasingly recognised as leading the way in innovation. Against a backdrop of heightened competition and disruption, building stronger brands is what it takes to stay in the game,” said Roth.

Doreen Wang, global head of BrandZ at Kantar, said, “Whether going abroad or expanding domestically, the potential for brand growth is huge for China’s most valuable brands. But realising it requires the knowledge and expertise needed to surmount new challenges. This report highlights the importance for Chinese brands to build difference in the domestic and global marketplace.”

Yetunde Adegoke

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