The China Brand Report

Table of Contents

Figures

Abbreviations

Introduction

China’s Companies on a Global Scale

China Brands going International

China’s Most Valuable Brands
Interbrand
Hurun Report

Overview of China Brands
Agricultural Bank of China
Air China
Alibaba
Aluminum Corporation of China
Baidu
BaiSha
Bank of China
Bank of Communications
Baosteel
CCTV
Changhong
Changyu Pioneer Wine
Chery
China Citic Bank
China Communications Construction
China Construction Bank
China FAW Group Corporation
China Huaneng Group
China Life Insurance Company
China Merchants Bank
China Metallurgical Group
China Minmetas
China Mobile
China Nation Offshore Oil Corp
China National Petroleum
China Netcom
China Overseas Estate
China Railway Construction
China Railway Engineering Corporation Group
China Resources
China South Industries Group Corporation
China Southern Power Grid
China State Construction Engineering Corp
China Telecom
China Unicom
China Vanke
COFCO
Conch Cement
COSCO
Ctrip
DongFeng Motor Co. Ltd.
Furongwang
Geely
Gome
Gree
Haier
Home Inn
Hongtashan
Huawei
HuiYuan Juice
Industrial and Commercial Bank of China
Lenovo
Li-Ning
Meng Niu
Meters/bonwe
Midea
Minsheng Bank
Moutai
NetEase.com
New Oriental
PICC
Ping An Insurance Group of China
Shagang Group
Shanghai Automotive Industry Corporation
Shoudu Iron and Steel Group
Sina
Sinopec
Sinosteel
State Grid China
Suning
TCL Group Co., Ltd.
Tencent Holdings Limited
Tongrentang
Tsingtao Brewery
Wahaha
Wu Mart
Wuliangye Yibin
Yili Group
ZTE

References

Figures

Figure 1: Chinese Companies in the FORTUNE Global 500 of 2009

Figure 2: Likeliness of Purchase of Chinese Products

Figure 3: Interbrand's 20 Most Valuable Brands in China

Figure 4: The Hurun Report List about the 20 Most Valuabe Brands in China

Abbreviations

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Introduction

Why a report about brands and companies in the People’s Republic of China? As the most rapidly growing region in the world over the past decade, the People’s Republic of China has attained a new level of prosperity. Over the past quarter-century, China has achieved phenomenal economic growth – primarily through a combination of exports, massive infrastructure spending and gradual market liberalization – culminating in China’s entry into the World Trade Organization in 2001. Many economists now predict China’s economy will surpass the size of the U.S. economy by 2035 (Beebe, Hew et al. 2006).

In Asia as a whole region's per capita income has more than doubled since the wrenching Asian financial crisis of 1997-98. Since 1990, over 400 million fewer Asians are living in poverty on incomes of less than $2 per day. On the surface, the region has much to celebrate on the long and arduous road to economic development. Many believe the Asia Century is now at hand (Roach 2009).

From a consumer side, however, the U.S. consumer is still the dominant player in the global economy. Although America accounts for only about 4.5% of the world's population, its consumers spent about $10 trillion in 2008. By contrast, although China and India collectively account for nearly 40% of the world's population, their combined consumption was only about $2.5 trillion in 2008. During the boom of 2002 to 2007, China and the rest of Asia reaped enormous benefits from a mercantilist growth model that was linked increasingly to the voracious appetite of the American consumer. The current global recession is an important wake-up call for Asia to find a new recipe for its growth model. With the financial crisis that has its roots in overspending, a balancing in terms of global demand act from Asia is expected. Central to that rebalancing will be the long-awaited emergence of the Asian consumer. For a region steeped in a culture of saving, this will not be an easy transformation. Here again, the PRC undoubtedly holds the key (Roach 2009).

It is argued that by 2014 the Chinese consumer will likely have displaced the US consumer as the main engine of growth and prosperity in our global economy. The communist government policy is rebalancing demand within the Chinese economy from investment spending to consumption spending. This is a trend that has the potential to quadruple China's share of global consumption spending by this time (Garner and Chan 2005). However, today China needs to be understood as a highly stratified society. To imagine China otherwise – either as a Communist foe or a comparatively undifferentiated mass market – misses the complex reality of the “new”, more economically open, post-Mao China. In the face of rapid economic restructuring and urbanization, the gap between urban blue-, white- and gold-collar classes and rural poor in China has widened. The true extend and buying power of the Chinese middle classes is also often grossly overrated. In any event, in order to develop a strong presence in China, companies need to develop successful products and services for multiple market segments. While advantages can accrue to Chinese brands in these circumstances, strong synergies exist for marketers and the Chinese state if these opportunities are developed through joint ventures and other forms of collaboration with international partners (Wang 2008). The rise of the Chinese Consumer is intertwined with the growing importance of local China’s brands that only recently got into the focus of academics and practitioners alike.

While most Chinese companies remain anonymous contract manufacturers with little or no global consumer branding power (Beebe, Hew et al. 2006), some companies are building from their origins as low-cost leaders to become innovative, branded players - in other words, to make themselves more competitive in a world increasingly dominated by megabrands like Wal-Mart, Microsoft and Coca-Cola. Now, it seems, Chinese companies have gotten the message. In 2005, Lenovo - the Chinese computer maker - bought IBM’s personal computer business. With its IBM computer purchase, Lenovo, a major Chinese computer maker but virtually unknown outside of China, is suddenly the world's third-largest computer maker after Dell and Hewlett-Packard. Haier, one of China's biggest companies, made a bid in the same year for the US-American Maytag Corporation. TCL, another Chinese company, became the world's biggest television set maker in 2004 after it acquired the television set business of Thomson of France, which also owned the old RCA brand. Experts these deals are symbolic of China's rapid economic rise, and its global ambitions. Many of the companies from the Middle Kingdom seem to be reacting out of desperation, as more foreign brands line the shelves of retailers in China. And now that some of those restrictions were lifted as part of China's ascension into the World Trade Organization in 2001, some of China's biggest companies are being forced to adopt global strategies (Barboza 2005).

China’s Companies on a Global Scale

By the latest numbers, 31 of the Fortune Global 500 companies are from the Chinese mainland (Fortune 2009). Refer to Figure 1 for a complete list of Chinese Companies that are listed in the Fortune Global 500 list of 2009.

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Figure 2: Likeliness of Purchase of Chinese Products

Ogilvy & Mather survey of 303 consumers in France, UK and U.S., 2005.

Many Chinese companies consider brand ownership critical to their success internationally, but they may not fully appreciate the sustained investment required for brand building and management. Global players in FMCG like Coca-Cola, Nike and Nokia invest heavily - and most important sustainably - in their brands, as suggested by their high rankings among the 2009 Interbrand list of the top 100 global brands. It is remarkable that no Chinese companies are mentioned in the list (Interbrand 2009).

China’s Most Valuable Brands

During the early stages of market-opening, most Chinese brands spent their time studying the successful experience of foreign, mostly American or British, brands. After years of practice, some Chinese brands have migrated from learning and following to creating and exploring their own unique path. They are deep-rooted in the soil of a vast market, searching for their own brand principles in China, and creating localized best practices (Interbrand 2007).

Brand value is a paradigm that comes with a host of different names and literally a multitude of approaches how to measure it correctly. All those can have a more academic or practical background (Kapferer 2008). While this report does not have the aim to discuss the different models with their advantages and weaknesses, we present two lists that offer their own unique views.

Interbrand

In co-operation with BusinessWeek China, the business consultancy Interbrand released a list of Chinese top brands in 2007, win which the brands are ranked by their NPV that has been calculated by Interbrand’s methods.

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Figure 3: Interbrand's 20 Most Valuable Brands in China

Hurun Report

The ‘Hurun Most Valuable Chinese Brands 2009’ measures the brand equity of China’s top one hundred brands. The Hurun Research Institute’s ranking takes into account a combination of quantitative and qualitative research using financial data – to calculate the present value of the earnings that the brand is expected to generate in the future – and consumer research (HurunReport 2009).The institute was founded by a former Forbes employee and also informs about China’s most rich people.

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Figure 4: The Hurun Report List about the 20 Most Valuabe Brands in China

Overview of China Brands

On the following pages, a broad range of Chinese brands from different industries are presented. All the brands that appeared in this report so far are included, as well as brands that have such importance justifying including them as well. Information for every brand/company includes the name in English and in Chinese characters, the characteristic brand logo, as well as a short report about the company itself. The data was mostly gathered from the consultancy and business intelligence company Datamonitor (http://www.datamonitor.com/), furthermore the according corporate websites and in some cases from various sources on the internet.

Agricultural Bank of China

中国农业银行

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Industry: Financial Services

Agricultural Bank of China Limited (ABC)is the one of the "Big Four" banks in the People's Republic of China. It was founded in 1951, and has its headquarters in Beijing and has branches throughout mainland China, and also in Hong Kong and Singapore. It employs over 300,000 people. By the end of 2008, the Agricultural Bank of China became the second largest bank in China in terms of total assets.

Air China

中国国际航空公司

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Industry: Airline

Air China, a member of the Star Alliance, is a provider of air passenger, air cargo and airline related services in China. The company also offers aircraft engineering services, such as aircraft maintenance, repair and overhaul services, airport terminal services, air catering services and other airline-related services. It serves about 81 domestic destinations and 42 international and regional destinations through its global route network with Beijing as the major hub. The company primarily operates in Mainland China, Hong Kong and Macau, Europe, North America, Japan, Korea, Asia Pacific and others regions. It is headquartered in Beijing, China and employs about 20,490 people.Air China is the most successful airline brand in China, taking continuous initiatives to build its brand, including becoming the only airline partner of the 2008 Beijing Olympic Games. Air China is a member of the Star Alliance.

Alibaba

阿里巴巴

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Industry: Internet

Alibaba.com, a member of Alibaba Group, is engaged in providing business-to-business (B2B) e-commerce solutions. The company provides an online market for global trade, domestic China trade and a Japanese marketplace. The company primarily operates in China, Europe and the US. It is headquartered in Hangzhou, China and employs about 8,680 people. Alibaba is an excellent proof of the principle that a brand is not successful solely from a big idea, but a sophisticated system behind the big idea. When everyone in the online B2B market was trying to attract more eyeballs, Alibaba was putting the concept into operations. After launching several sub brands to solve the trust and payment problems of online transactions, Alibaba succeeded in boosting its online revenue. Now Alibaba has over 24 million subscribers from more than 200 countries and regions. With the tagline, Find It. Make It. Sell It., the campaign targets small businesses and entrepreneurs and encourages them to draw up their business plan, lock down their prototype and get on Alibaba.com to make it happen.

Aluminum Corporation of China

中国铝业

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Industry: Commodities

Aluminum Corporation of China Limited, also known as Chalco or Chinalco, is the only producer of alumina and the largest producer of primary aluminum in the People's Republic of China. Chalco is a member of the SSE 50. It is the world’s second largest alumina producer and the third largest primary aluminum producer.

Baidu

百度

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Industry: Information Technolgy

Baidu is a Chinese language internet search provider. It also offers online advertising services through its subsidiaries. The company's online marketing services include auction-based P4P (Pay for Performance) and tailored solutions. The company operates in China, Japan and Hong Kong. It is headquartered in Beijing, China and employs around 6,387 people. Baidu is the most successful Chinese internet search engine and online media platform. Its name is inspired by an old Chinese poem, and literally means “hundreds of times”. Baidu’s breakthrough has been the application of state-of-theart technology to the ancient language of Chinese, enabling users to find exactly what they want without compromising their cultural identity. Baidu dominates the Chinese market with over 60% market share, keeping global competitors like Google, MSN and Yahoo! At bay.

BaiSha

白沙

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Industry: Tobacco

Baisha group is based in Changsha, Hunan. Started in 1947 as Changsha Cigarette Factory, it is now one of the biggest tobacco companies in China. Its major products are known as “Baisha” series. The group is engaged in a wide range of businesses, including cigarette production, culture communication, and printing.

Bank of China

中国银行

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Industry: Financial Services

Bank of China (BOC) is engaged in commercial banking, including corporate and retail banking, treasury business and financial institutions banking services. The company operates in Chinese mainland, Hong Kong and Macau. It is headquartered in Beijing, China and employs about 249,278 people. Bank of China possesses an unrivaled international banking network, dominates international trading and foreign exchange services and is the most globalized bank among ist Chinese peers.
BOC’s tagline, “Always With You” shows ist commitment to customer service, helping customers travel and study overseas, but more remains for BOC to deliver on ist promise. Bank of China put substantial effort into marketing and branding activities, e.g. Bank of China is the only bank partner of 2008 Olympic Games, but ist large marketing and M&A expenditure limited the growth of ist brand value this year.

Bank of Communications

交通银行

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Industry: Financial Services

Bank of Communications (BoComm) is a commercial and retail bank engaged in providing professional services in fields as corporate banking, personal banking, international banking and fee based business. It offers services such as loans, bills, trade finance, deposit accounts, credit cards services, online banking and treasury services, including money market placements and takings and investment in securities. The company primarily operates in China, where it is headquartered in Shanghai and employs about 77,730 people. BoComm always takes initiatives ahead of its local competitors, e.g. first Chinese bank to finish its financial reorganization, first to introduce a strategic investor (HSBC), and first to be listed on HKSE. Though BoComm lacks the wide geographic distribution of an ICBC, its outlets are mostly concentrated in affluent areas, and it has a sophisticated creditworthiness system which it has applied to its 40 million retail customers and cardholders. BoComm is also aggressive in its marketing and branding. Recently, hurdles champion Liu Xiang became a spokesman for the bank. It also launched two wealth management brands last year, OTO Fortune and BoComm Fortune, but can do more to promote ist corporate level brand.

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