HONG KONG, Aug. 19 /PRNewswire-Asia/ -- Chinese brands are poised to crack the global dominance of their Western counterparts, the results of a detailed new brand value study show.
Brands such as China Mobile, ICBC and Midea now have almost as much financial value as household names Verizon, Barclays and Whirlpool, reflecting not only the strength of the businesses they represent in the domestic Chinese market, but also their increasing presence in the international marketplace.
The new study, BrandFinance® China 100 Brands, published today by Brand Finance (Hong Kong) Ltd, indicates that many Chinese brands currently known largely inside the country are poised to have a significant impact on international consumers in the near future.
The total brand value of the top ten China 100 Brands in the report is US$117.795 billion, equivalent to 36.4% of the total US$323.8 billion brand value for the top ten global brands as measured by the BrandFinance® Global 500 survey released earlier this year.
Brand Finance (Hong Kong) Ltd director Anthony Pettifer said: "The results of this study indicate that for China's brands there are rich enough pickings in the domestic market to build significant brand value at a faster pace than elsewhere. But as they continue to mature at home, some of China's leading brands are already achieving growth and making their presence felt in overseas markets. While there are only a small handful of truly international brands among the China 100, these brand owners are reporting increasing international sales."
Of the 100 companies covered by the survey, China Mobile has the highest brand value, at US$22.6 billion. That positions it just below the top three global telecom brands, currently Vodafone, AT&T and Verizon.
China's biggest bank, ICBC, ranks second in the list, with a brand value of US$16.9 billion, from where it is set to break into the top 10 in terms of global banking brand value. Third is China Construction Bank, which comes right behind ICBC in the Global 500, at number 55. Agricultural Bank of China (ABC), which listed in Hong Kong and Shanghai in mid-July, entered the China 100 league table at number 5, with a brand value of US$11.4 billion.
At number 17 in the China rankings, white goods manufacturer Midea has a brand valuation of US$2.3 billion, putting it only slightly behind the US giant Whirlpool (US$2.4 billion) in the Global 500 valuation. Haier, Whirlpool's biggest competitor in terms of current US sales, has a brand value of $1.4 billion, and ranks at number 34.
A further measure of the untapped global potential for Chinese brands is that Haier, which sponsors the NBA in the USA, now claims to be the global leader in its sector by market share.
At the same time, the top ten brands in China account for an aggregate of US$1,483 billion in enterprise value, fully 74% of their global counterparts. This further underscores the potential for future increases in the strength and value of China's brands and the companies that own them, as well as the certainty that some of these brand names will feature in the upper ranks of global league tables in the very near future.
China's fascination with brands, underpinned by rapidly-increasing middle class wealth, has already proven massively lucrative for luxury international brands like Louis Vuitton, Gucci, Dunhill, Rolex, Mercedes Benz and BMW (including their Mini and Rolls Royce brands). But it is clearly now also creating growing financial value for Chinese brands as yet largely unknown outside China, such as Snow Beer (#49), electrical retail group Suning (#21), and life insurer PingAn (#13).
Pettifer added: "As Chinese companies extend their brands into new markets there is little doubt we are approaching the point when names like Sinopharm (#54) may become as well known internationally as Pfizer or Roche." "If you don't know yet about Yingli, then you didn't watch the World Cup, where the NYSE-listed solar panel maker was one of the events' sponsors, reaching out to customers in its main markets of Europe and the US. It is also noticeable that Alibaba (#78), whose registered B2B customers are already twice the size of the population of Australia, continues aggressively expanding its international reach. Other brands such as BYD (#24), Gree (#29) and the recently rebranded Li Ning (#55) are names to watch out for in the future too."
In common with all Brand Finance league table studies, the China 100 Brands report uses the royalty relief methodology to establish brand value. This valuation method assumes a benchmark royalty rate that would be payable to a third-party if the company did not own the brand. The royalty rate is applied to an estimate of future revenue -- based on historical growth from company data, Institutional Brokers' Estimate System (IBES) and GDP forecasts -- to determine an earnings stream that is attributable to the brand. The brand earnings stream is then discounted back to a net present value.
Only Chinese brand-owning companies with a stock market listing are included, so that, for example, Huawei, recognised internationally as a leading telecom supplier, does not figure in the rankings.
To download the report, please click:
http://www.firstcitypr.cn/download2010/BrandFinanceChina100Brands_SummaryReport-cn.pdf
http://www.firstcitypr.cn/download2010/BrandFinanceChina100Brands_SummaryReport-en.pdf
Notes For Editors
The BrandFinance® China 100 Brands is the first publicly available study analyzing the financial value of China's top 100 brands. To be eligible for inclusion in the BrandFinance® China 100 Brands, the following criteria must be met:
The methodology employed in the BrandFinance® China 100 Brands uses a discounted cash flow (DCF) technique to discount estimated future royalties, at an appropriate discount rate, to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.
Each brand is accorded a brand rating: a benchmarking study of the strength, risk and future potential of a brand relative to its competitor set as well as a brand value: a summary measure of the financial strength of the brand.
About Brand Finance
Brand Finance is an independent global business focused on advising strongly branded organisations on how to maximise value through effective management of their brands and intangible assets. Since it was founded in 1996, Brand Finance has worked on behalf of thousands of branded business, completing brand and intangible asset valuations worth trillions of dollars.
Its clients include international brand owners, tax authorities, IP lawyers and investment banks. Its work is frequently peer-reviewed by the big four audit practices and its reports have been accepted by various regulatory bodies, including the UK Takeover Panel.
Brand Finance is headquartered in London and has a network of international offices in Amsterdam, Athens, Bangalore, Barcelona, Cape Town, Colombo, Dubai, Geneva, Helsinki, Hong Kong, Istanbul, Lisbon, Madrid, Moscow, New York, Paris, Sao Paulo, Sydney, Singapore, Toronto and Zagreb.
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