China Mobile has retained its spot as the nation’s most valuable brand for the fourth consecutive year, with a value of US$61.4 billion, up 21% on 2013.
The 2014 WPP BrandZ Top 100 Most Valuable Chinese Brands study, commissioned by WPP and undertaken by Millward Brown, shows that China is increasingly a consumer-driven market amid the government’s plan to rebalance the domestic economy.
The technology sector continues to rise in brand value with technology brands increasing their value 28% overall.
Tencent, valued at US$33.9 billion, rose two positions to number three after growing its value 68%, and is the leading market-driven brand.
While a host of categories from tech, to financial institutions, airlines, oil and gas, insurance, telecom providers, apparel found solid growth, the alcohol sector declined 6%.
The drop comes as baijiu and wine brands felt the impact of the reduction in government spending on entertaining, and faced fierce competition from foreign brands.
Bucking the downward trend in the alcohol category, beer brands Tsingtao Beer, Snow Beer and Harbin Beer all achieved double-digit value growth thanks to creative interactions with consumers.
Travel service provider Ctrip boosted its value 47% after a 39% decline last year, having continuously innovated to stand out from the competition with developments including a new mobile hotel booking app.
Though Chinese brands still need to up their efforts in customer service, managing director of Millward Brown China Deepender Rana said brands' dedication to clarity and transparency has substantially improved bonds with customers, who are increasingly chasing what the Chinese government calls "The Chinese Dream".
"The Chinese Dream is an emerging concept: Chinese consumers are looking to be more green, environmentally friendly, authentic and meaningful. Before, it was cool to flash a label, but now what they want to see is what the brand means to me as an individual and how I see it personally," he said, adding that Chinese brands need to reposition themselves as a holistic offering, which is something that "they've forgotten in the past 20 to 30 years".
"The major difference between local and international brands is that Chinese labels have a tendency to copy and inherit the herd mentality; they're known for delivering great value but multinationals know how to be meaningfully different, to stand for something where customers can talk about -- and customers are willing to pay a premium for this difference."
However, Chinese brands are not slow to adapt to this change. Dairy brand Mengniu, for example, changed their emphasis from offering proteins and functional benefits to "a drop of Mengniu contains two drops of happiness".
"Brands are learning to connect emotionally because at the end of the day, consumers will buy brands they like, not to mention that functional attributes are very easy to copy. But when brands can own that emotion, they can stand out," said Rana.
This year WPP expanded the list from 50 to 100 brands, adding new categories cars, catering, education, furniture, hotels, jewelry retailers, personal care and real estate.
The addition reflects consumers’ increasing purchasing power and changing shopping habits – they are spending more on leisure activities and taking care of themselves, while continuing to aspire to own a car and a home.