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Chinese brands shine despite COVID pain

By He Wei in Shanghai | China Daily | Updated: 2020-10-22 09:47
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The headquarters of e-commerce giant Alibaba Group in Hangzhou, capital of Zhejiang province. [Photo by Niu Jing/For China Daily]

The value of some brands has grown in importance despite uncertainties and global economic turbulence created by the COVID-19 pandemic, according to a research report on the 10-year performance of Chinese brands.

For the 10th edition of the annual ranking dubbed BrandZ, media agencies WPP and Kantar picked China's 100 most valuable brands that bucked the exceptional growth pressure and still gained 12 percent in value.

The Top 100 brands increased their worth by $106.8 billion to reach $996.4 billion, demonstrating the resilience of strong brands and their ability to build and sustain value against all odds, said Doreen Wang, general manager of Kantar China and global head of BrandZ.

"The key takeaway is that even during stressful times, valuable brands rebound faster and deliver superior returns," Wang said. "It has never been more critical for brands to respond to shifting consumer priorities."

The list surveyed financial performance and branding contribution of public companies and loosely incorporated ones as the two pillars to calculate brand value.

Internet giant Alibaba Group Holding Ltd took the top spot, growing 9 percent to $153.3 billion, followed by Tencent ($151 billion).

Chinese brands in the fields of entertainment and education-think labels such as Douyin, Xueersi and XDF-have gained the most in value proposition amid the COVID-19 pandemic.

The entertainment sector posted the highest growth for the second year running, expanding 2.2 times, while education added 92 percent as a result of coronavirus-triggered remote learning.

Wang said branding drives sales by reinforcing people's willingness for repurchase, enabling mass customization, and delivering a superb customer experience.

The research report also uncovered a series of consumption trends that appear to reflect a dichotomy-value-chasing shoppers' pride in buying Chinese brands versus the parallel pursuit of cost-effective bargains and premium offerings.

"These trends aren't contradictory. Rather, brands that manage to capture and satisfy the intersection of consumer needs gain a strong foothold," said Deepender Rana, chief executive of Insights Division of Kantar Greater China.

Rana said the brands, which address a female consumer's desire to be an outstanding working woman as well as a responsible homemaker, command a premium.

Other factors fueling brand growth include penetration into the vast lower-tier markets, improvement in customer experience as well as utilization of creative content to make an impression.

In this context, brands such as Pinduoduo and Kuaishou have carved a niche for themselves.

The report referred to content commerce as an example of the trend toward experiences that increase convenience by being multifunctional or overlapping.

Brands such as JD and Meituan are integrating social media and e-commerce in a way that simplifies people's lives-creating appealing content that can be seamlessly monetized.

Chinese brands continue to pursue global growth and rapidly expand their international presence and stature. Only one-China Construction Bank-was listed in the 2006 ranking of the most valuable global brands; the 2020 ranking includes as many as 17.

Experts also expect Chinese brands to advance into international markets, with personalized offerings as an asset to excel. In this context, they mentioned brands such as Haier and Xiaomi.

"High personalization will allow Chinese brands to realize 'corner overtaking' and carve out a unique niche as they expand overseas in the next decade," said Justin Teo, chief digital officer of Geometry, an advertising agency belonging to the WPP stable.

The marriage of data analytics and an understanding of human nature could serve as a long-term game-changer.

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