NEW YORK, Aug. 4, 2020 /PRNewswire/ — World Brand Lab released the «China’s 500 Most Valuable Brands of 2020″ list with an analysis report at the World Brand Summit, which was held in Beijing on the 5th of August. In the annual report, State Grid tops the list with a brand value of 503.69 billion RMB. The other four brands in the top five are ICBC (450.58 billion RMB), Haier (428.65 billion RMB), Tencent (421.55 billion RMB) and China Life (415.86 billion RMB). The above brands have all developed into world-class brands. Management experts from Harvard University, University of Oxford, University of Cambridge and INSEAD attended the World Brand Summit and gave online speeches. They discussed the topic of «Bucking in the Trend: How Brands Can Grow in the Face of the Global Pandemic» through an interactive session with the guests.
The total value of brands on the «China’s 500 Most Valuable Brands 2020″ list reached 24692.06 billion RMB, which indicated an increase of 2821.03 billion RMB, or 12.90%, from the previous year. Professor Robert Mundell, Chairman of the World Brand Lab and Nobel Prize winner in Economics, said that for the world’s manufacturing industry, the output value of China is approximately equal to the total value of the U.S., Japan and Germany. However, the growth of Chinese brands has not kept pace with the development of Chinese manufacturing. Nevertheless, the success of Chinese brands is known worldwide. This is the 17th year that the World Brand Lab has compiled the report on Chinese brands. In 2004, the threshold was only 500 million RMB and the average value of the top 500 brands was 4.94 billion RMB. In 2020, 17 years later, the threshold has grown to 2.72 billion RMB, and the average value of the top 500 brands is as high as 49.38 billion RMB, which indicates an increase of 899.07%.
The competitive strength of a region mainly depends on its comparative advantages, where brand effectiveness directly affects the formation and development of the regional comparative advantages. From the regional distribution of the top 500 brands in 2020, Beijing, with 93 brands selected, ranks first. The main reason being that the headquarters of central enterprises with strong profitability are concentrated in Beijing. Guangdong and Shandong, with 90 and 44 brands selected, rank second and third, respectively. Depending on the scope of influence, these brands are separated into three groups: global, national and regional. The list includes 435 brands with national influence that account for 87%, along with 55 brands with global influence that account for 11%, which is a slight increase from last year.
Although the COVID-19 pandemic did not stop the overall upward trend of values of Chinese brands, in comparison with the numbers of the previous year, the numbers of selected brands have significantly dropped in industries that have been heavily affected by the pandemic, such as clothing, automobiles, tourism and media. The numbers of selected brands in the staple industry, such as food, beverages, finance and machinery have increased in varying degrees. In this year’s brand list, a total of 27 related industries have been covered. Among them, the food and beverage industry still accounts for the largest number of selected brands with a total of 85 brands, which represents 16.80% of the overall selection. The industries that rank second to fifth are the light industry (50), construction materials (39), media (35), and textiles and apparel (31). This year, there are 53 Chinese brands worth more than 100 billion, with an addition of six brands from last year.
Since this year’s topic for World Brand Summit was «Bucking in the Trend: How Brands Can Grow in the Face of the Global Pandemic», Dr. John Deighton, a professor of Business Administration at the Harvard Business School, pointed out that the first learning from the pandemic has been that agility matters more than ever. Agility is easier if a brand has up-to-date information. The second learning is to change the way brands interact with consumers. They must not be light or humorous or lacking in empathy, since people are insecure. Third, marketing must feed back to the rest of the senior leadership team.
Dr. Steve Evans, a professor of Industrial Sustainability at the Institute for Manufacturing at the University of Cambridge, pointed out that more frequent and large disruptions are likely to become normal. Businesses must find a path to become resilient. For Chinese brands, he offered some suggestions. Firstly, growth in size alone will not make a business strong. Secondly, growth in well-being is becoming important. Thirdly, trust will become the most important business word of the next decade. Lastly, companies should accelerate their experiments and improve their ability to innovate as part of their resilience plan.
Dr. Steve Woolgar, a professor of Marketing at the Saïd Business School of the University of Oxford, pointed out that brands now can focus on two qualities: helpfulness and empathy. Brands form the basis of relationships, not just between the company and its customers, but between groups and networks of customers. The most successful brands play to the concerns and anxieties of this large societal collective of potential customers.
Dr. Ziv Carmon, a professor of Marketing at INSEAD, pointed out that the pandemic has caused unprecedented economic fallout. However, some firms have managed to flourish during this crisis. The key to success during this crisis has been deep customer centricity. In particular, brands must identify central customer pain points. While such centricity is always important, major crises accentuate customer sensitivities.
Haiseng Ding, CEO of World Executive Group and World Brand Lab, stated that consumer behavior has undergone major changes. First, consumers are more willing to try new brands and products during the crisis. Second, consumers have higher requirements for brands than before. They are more inclined to buy brands with better ESG performances. Third, the pandemic has forced most consumers to abandon their consumer beliefs and to change their behaviors in areas from grocery shopping to social interaction. Entrepreneurs should follow these trends and make timely adjustments to brand strategy.
The world’s leading consultant of brand valuation and marketing strategy, the World Brand Lab, is wholly owned by leading strategic consulting and business communication company—World Executive Group. Professor Robert Mundell, the winner of the 1999 Nobel Prize in Economics, serves as the Chairman of World Brand Lab. Over the past 17 years, World Brand Lab has sought to help foreign brands enter China and simultaneously help the globalization of Chinese brands. Over 150,000 companies use its dynamic database. World Brand Lab’s research findings have been applied by many enterprises as important references for intangible asset evaluation in mergers and acquisitions processes. The «China’s 500 Most Valuable Brands» list has been released for 17 consecutive years and adopts the approach of showcasing the present value of earnings to evaluate brand values. The method is based on the method of economic applications, which combines consumer research, competitive analysis and forecasts of the company’s future income.
Figure 1: Top 10 of «China’s 500 Most Valuable Brands of 2020″ (Billion RMB)
Figure 2: Geographical Distribution of «China’s 500 Most Valuable Brands of 2020″ (Top 10 Province/City)
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SOURCE World Brand Lab