China's Top 50: Much Progress But More to Do
The recently released China Top 50 ranking once again confirms the value of a strong brand and highlights the remarkable growth of China’s economy over the past decade. But it also provides an opportunity to define some of the specific challenges currently facing Chinese brands.
By Millward Brown
While they are growing well at home, China's developing brands face a very different environment outside of China. In developed markets, these brands need to sharply increase their levels of awareness and penetration. But beyond that, to actually achieve profitable growth, Chinese brands need to provide consumers with an experience that is meaningfully different.
As we have seen in previous years with the BrandZ Global Top 100, the share prices of strong brands greatly outperform the average. This year's China Top 50 ranking provides another example of the value of this "brand gap." (See Figure 1.) While the MSCI China Index registered a 6 percent loss over the past 15 months, the China Top 50 brands were up 20 percent.
The New China: Fertile Ground for Brands
December 2011 marked the tenth anniversary of China joining the World Trade Organization, and some observers say that a hundred years' worth of societal and economic transformation has occurred in the decade since. Nearly 300 million new middle class consumers have emerged to create a growing market that has allowed new brands to become established extraordinarily quickly. Six of the brands in the Top 50, collectively worth US$50 billion, didn't even exist 10 years ago, while more than half the brands in the Top 50 were created after 1990.
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