In turbulent times,brand strengthprotects andpropels the winners
David Roth
CEO
The Store WPP, EMEA & Asia
[email protected]
Twitter: davidrothlondon
| Consider these circumstances. An economy slows to 6.9 percent GDP growth from annualgrowth of 10 percent or more during much of the past decade. The stock market reaches arecord high in June, loses about a third of its value by the end of summer, but ends the year up,actually outperforming the S&P 500. These events are the very definition of market volatility.And they describe the context for the 2016 BrandZ™ Top 100 Most Valuable Chinese Brands.
The events of China’s past yearprovided the perfect crucible for testingthe fundamental principle behind allof our BrandZ™ work, which is thatbrand strength provides the fortitudeto endure the most extreme marketfluctuations and emerge successfully.In these circumstances, would youexpect brand value to decline? Or doyou think brand value might creep upslightly? Despite the difficult economicchallenges, the value of the 2016BrandZ™ China Top 100 rose a healthy13 percent.
Let’s adjust the lens so that we are notfocused on last year alone, but on alarger timeframe that encompasses themore than three decades since Chinaembarked on economic reform, whenthe swells of industrial expansion lifteda lot of brands. Even as the currentturbulence tossed some brands, theballast of brand strength stabilizedmany others.
Here’s one demonstration of brandstrength: The MSCI China, a weightedindex of Chinese stocks ended 201510.7 percent lower than its level in 2010. Compare that result with theperformance of a stock portfoliocomprised of brands from the BrandZ™China Top 100 with the highest scoresin Brand Contribution, a BrandZ™measurement of brand strength. Overthe same period, the portfolio of BrandContribution leaders rose 103.5 percent.
Let’s pull back the lens even furtherso we can begin to see the outlinesof future brand growth in China.Today, the BrandZ™ China Top 10still accounts for almost two-thirdsof total ranking value, a legacy of theproduction-driven economy and thecentral role of state-owned brands.However, the BrandZ™ China Top 10only grew 3 percent in value, while thegrowth rate of brands 11-to-100 wasover 30 percent.
These faster-growing brandspredominately are market-driven, asare nine of the 10 brands that enteredthe BrandZ™ China Top 100 for thefirst time. In other words, as Chinarebalances to a consumption-driveneconomy, the faster growing brands arethose that depend less on governmentand more on effectively meetingconsumer needs in ways that areDifferent and Meaningful.
THE UNPARALLELED CHINARESOURCES OF WPP
Which raises the question, how doesa brand best compete in this rapidlychanging Chinese market? That’s wherewe can help. This sixth annual editionof the BrandZ™ Top 100 Most ValuableChinese Brands represents a fraction ofthe knowledge, insight, and expertiseavailable from brand experts at WPPcompanies in China.
WPP is the world’s communicationsservices leader. Our companies havebeen engaged in China for over 30years. Today, 15,000 people, includingassociates, work across China in Beijing,Shanghai, Guangzhou and many othercities. We provide advertising; insight;branding and identity, direct, digital,promotion and relationship marketing;media investment management, retailand shopper marketing; and publicrelations and public affairs. It’s all part ofour global presence in 112 countries.
By linking all this talent, creativity, andwisdom, we amplify global trends andinsights that help our clients in usefuland unique ways. We call this powerfulperspective “horizontality.” It includesour unrivaled Brand™ resource library,which we invite you to access. Alongwith the BrandZ™ Top 100 MostValuable Chinese Brands, the libraryincludes these titles: the BrandZ™Top 100 Most Valuable Global Brands;the BrandZ™ Top 50 Most ValuableIndian Brands; the BrandZ™ Top 50Most Valuable Latin American Brands;the BrandZ™ Top 50 Most ValuableIndonesian Brands; and Spotlight onMyanmar - the ‘Leapfrog’ Nation.
You’ll also find insights about theChinese market in these BrandZ™reports: Unmasking the IndividualChinese Investor; The Power andPotential of the Chinese Dream; TheChinese New Year in Next GrowthCities; and The Chinese Golden Weeksin Fast Growth Cities. To downloadthese and other BrandZ™ reports,please visit www.brandz.com. For theinteractive BrandZ™ mobile apps go towww.brandz.com/mobile.
The backbone of all this intelligenceremains the WPP proprietary BrandZ™,the world’s largest, customer-focusedsource of brand equity knowledgeand insight. It is big data at its biggest,with 4.5 billion individual data points.
Using the BrandZ™ brand valuationmethodology of Millward Brown, aWPP company, we analyze relevantcorporate financial data and strip awayeverything that doesn’t pertain tothe branded business. Then we takea critical step that makes BrandZ™unique and definitive among brandvaluation methodologies.
We conduct ongoing, in-depthquantitative consumer research withmore than 200,000 consumersannually, across over 50 markets, toassess consumer attitudes about, andrelationships with, over 100,000 brands.Our database includes informationfrom over three million consumerinterviews. It reveals the power of thebrand in the mind of the consumerthat creates predisposition to buyand, most importantly, validates apositive correlation with better salesperformance.
At WPP, we’re passionate about usingour creativity to create and build strong,differentiated brands that deliver lastingshareholder value. To learn more abouthow to apply our experience andexpertise to benefit your brand, pleasecontact any of the WPP companiesthat contributed expertise to this report.Turn to the resource section at the endof this report for summaries of eachcompany and the contact details of keyexecutives. Or feel free to contact medirectly.
Go to www.brandz.com to learn more. |