Page 18 - BrandZ Top 100 Most Valuable Chinese Brands 2015

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Part1 | Introduction-Highlights
HIGHLIGHTS | Cross Category Trends
TOP 100 Most Valuable Chinese Brands 2015
PREMIUMIZATION
Prosperity influences new products and services
To meet the desires of newly prosperous consumers,
brands across more categories introduced premium products or services. Chinese consumers believe that top Chinese brands can justify a premium, according to the BrandZTM Premium metric, which assesses how consumers view the ability of a brand to charge more.
The premiumization trend
was especially evident in the airlines category. Air China upgraded service for high-paying passengers as part of an effort
to distinguish the brand from competitors. China Southern Airlines also upgraded service
for premium passengers. Hainan Airlines introduced free private limo service for business class passengers in Seattle, Chicago and Boston.
In part to reassure customers about the safety of its dairy products, Yashili promoted what it called ultra high-end imported
milk products. Agricultural Bank of China, traditionally more focused on rural customers, was among the many banks creating wealth management products for affluent city dwellers. A leading cookware manufacturer, Supor recently built facilities for producing stainless steel and ceramic faucets, as part of a plan to become a supplier of premium bathroom fixtures.
The shift to the premium end of the market could help Chinese brands improve in the one component of brand equity
in which they continue to lag
– being seen as meaningfully different from the competition. But brands made progress.
In a related and parallel strategy to provide value-added services, appliance maker TCL entered joint ventures to create home entertainment devices and content. Appliance makers,
such as Haier, shifted away from competing on price to marketing the product advantages of
smart appliances. Several beers, including Snow Beer and Tsingtao Beer, promoted premium labels.
BIG DATA AND
ANALYTICS
Brands seek consumer insight in market-driven economy
To enhance growth as the China’s economic engine shifts from production to consumption, brands sought consumer behavior insights by collecting and analyzing big data.
Major Internet brands, such as Tencent and Baidu, gathered enormous amounts of user data to understand their customers, improve existing products and services and develop new ones. These Internet leaders also make data available to brand partners with which they work collaboratively to develop new offerings across categories.
Baidu opened a research center in Silicon Valley, in May 2014,
and appointed a former Google head of Deep Learning as chief scientist. Deep Learning is the ability of machines to replicate the processes of the human brain, which is relevant for big data analytics.
Many brands individually have become more active collecting and analyzing data. With the launch of its mobile myStore
app for shopping, Yonghui Superstores began to gather shopper data that it will integrate with the rest of its resource and logistical planning. The food and dairy brand Yashili introduced a membership program designed to learn more about customer needs, build loyalty and embrace shopper marketing. Around 400,000 consumers had joined the program by the end of June 2014.
The China Lodging Group, owner of the Hanting brand, operated 1,669 hotels in 270 cities at end
of the first half of 2014, and over 90 percent of the bookings
came from the company’s 20 million loyalty program members. Gemdale Property studied customer desires and market trends and created home designs based on that research. China Unicom, the telecom provider, tracked the online behavior of
new 3G customers to understand their habits and usage and supply customized products and services.
CONSOLIDATION
Category rationalization follows rapid growth
As the Chinese economy rebalances to the “new normal” after 30 years of intense economic expansion, some categories
are experiencing a period of rationalization, driven in part
by regulatory change aimed at fostering greater competition.
Until recently, for example, government urbanization
policy drove intense real estate development. Real estate
growth has slowed because of higher interest rates intended
to moderate demand, reduce development and limit excess inventory. Greentown China planned to sell a minority stake of about 24 percent to Sunac China, a real estate developer that, like Greentown, is focused on up-scale projects. Wharf Holdings, another developer, purchased around 24 percent of Greentown in 2012.
As the food and dairy category consolidates, brands gain the scale necessary for facing global competitors. Mengniu acquired a stake in China Shengmu Organic Milk Ltd. It also entered into a joint venture with WhiteWave Foods,
a US company, to operate Yashili,
the Chinese food and dairy brand that Mengniu purchased in 2013.
Consolidation is also occurring
in apparel, as a category with
too many stores responds to a slowdown in demand and an increase in foreign competitors offering a value proposition that appeals to today’s more informed Chinese consumer. Similarly, alcohol brands are adjusting to new market conditions because government restrictions on elaborate official entertaining and gift giving impact consumption.
AGING
New products aim at older citizens
China is an aging society. The median age in China is almost
10 years older than the median age in India, 36.7 compared with 27.0. Brands in several categories are beginning to respond to this demographic reality. In banking, China Everbright Bank offered more pension products. Health Care brand CR Sanjiu planned to introduce more over-the-counter remedies. Real estate developers planned retirement communities. Insurance brands offered wealth management products.