China 500 2019 The annual report on the most valuable and strongest Chinese brands March 2019 Contents. Bridging the Gap 4 About Brand Finance 6 Get in Touch 6 Request Your Brand Value Report 7 Foreword 8 Executive Summary 10 Regional Analysis 16 Sector Reputation Analysis 18 Brand Finance China 500 (USD m) 20 Definitions 30 Brand Valuation Methodology 32 Market Research Methodology 33 Stakeholder Equity Measures 33 Consulting Services 34 Brand Evaluation Services 35 Communications Services 36 Brand Finance Network 38 Brand Finance China 500 March 2019 3 Bridging the Gap. were able to apply Flame & Dragon for supporters. These The combined imagery are only granted to of flames and dragons is companies deemed traditional and represents highly reputable by the the omnipotence of College of Arms. We the dragon. This style have found that the of dragon is used by usage of the Coat of the richest Dynasty in Arms is helpful in our Chinese history, the Song core Brand Finance Dynasty. business, particularly in the international market Circles where the implied status The earliest coins used is recognised, but also in China can be traced with regards to the back to the First Emperor Brand Finance Institute, Qinshihuangdi in the Brand Finance Forums, Qin Dynasty. The logo and Brand Exchange. of the World Heritage Committee is a Chinese All aspects of the full Qin coin. Brand Finance Coat of Arms have been Clouds specially created and Auspicious cloud patterns have meaning related have been circulated for to our ethos and more than 5,000 years philosophy. and are one of the most representative cultural Original version Bridge symbols of China. Symbolises the company’s mission: Individuals, organisations, and companies are keen Chinese version Ding to associate themselves with the notions of duty, Bridging the gap between marketing and finance. Ding is the highest symbol of authority and has service, consistency, and heritage that the Monarchy Brand Finance established its presence in China in associations of fame, reaching the pinnacle and conveys. The fact that the British Monarchy is still a Diagonal lines 2017 and recognises the importance of respecting support. working institution and that the College of Arms has The heraldic symbol for branding. Chinese culture when building its business there. such close ties to it, means a grant of arms is the most For this reason, we recently developed a version of the Great Wall relevant and direct way for British and Commonwealth Circles Brand Finance Coat of Arms in order to incorporate The Great Wall symbolises a rich history of unity, high brands to associate themselves with such noble The heraldic symbol for finance. themes that are rooted in Chinese values. The Coat of standards, overcoming difficulties and managing risk, characteristics. The rigorous process conducted by the Arms consists of three dragons and several elements all of which are the cornerstones of a brand and the heralds at the College of Arms means that only those Book that embody the core mission of Brand Finance China. foundation of the logo. companies deemed to have sufficient standing will The heraldic symbol for knowledge. be awarded arms, so the public can have confidence Bridge that the desired associations are grounded in fact. A Colours Zhaozhou Bridge, meaning ‘stable economy’, is Coat of Arms is therefore a certification of a brand’s Blue: Strength, truth and loyalty. situated on the Fanhe River in Zhaoxian County and dependability and longevity, reinforcing consumer has a 1,400-year-old history. perception and boosting brand value. Gold: Understanding, respect, virtue and generosity. Water The Brand Finance coat of arms Dragons Chinese ancient Fengshui has the saying "mountain The heraldic symbol for strength and guardianship. supports people and water supports wealth"; the Brand Finance originally registered its Coat of strongest relationship between the five elements of Arms on its 10th anniversary in 2006. In 2016, we nature and fortune is water. 4 Brand Finance China 500 March 2019 Brand Finance China 500 March 2019 5 Request Your About Brand Finance. Brand Value Report. Brand Finance is the world’s leading independent A Brand Value Report provides a complete Each report includes expert recommendations for growing brand valuation and strategy consultancy. breakdown of the assumptions, data sources, and brand value to drive business performance and offers a calculations used to arrive at your brand’s value. cost-effective way to gaining a better understanding of Brand Finance was set up in 1996 with the aim of ‘bridging your position against competitors. the gap between marketing and finance’. For more than 20 years, we have helped companies and organisations of all types to connect their brands to the bottom line. We pride ourselves on four key strengths: What is a Brand Value Report? What are the benefits of a Brand Value Report? + Independence + Transparency Brand Valuation Summary + Technical Credibility + Expertise + Internal understanding of brand + Brand value tracking We put thousands of the world’s biggest brands to the + Competitor benchmarking Insight test every year, evaluating which are the strongest and + Historical brand value most valuable. Brand Strength Index Brand Finance helped craft the internationally + Brand strength tracking recognised standard on Brand Valuation – ISO 10668, + Brand strength analysis and the recently approved standard on Brand Evaluation + Management KPIs Strategy – ISO 20671. + Competitor benchmarking Royalty Rates Get in Touch. + Transfer pricing + Licensing/franchising negotiation + International licensing Benchmarking 中国区业务及媒体咨询，请联系： + Competitor benchmarking Scott Chen 中国区总裁 Cost of Capital [email protected] 地址：北京市国贸三期A座15层 + Independent view of cost of capital for internal Global Forum 2019 valuations and project appraisal exercises Vinchy Chan Education 副总监 Customer Research [email protected] + + Tech Understanding the Value of Utilities For English business enquiries, please contact: + Insurance + Auto Richard Haigh Geographic Branding + Banks + Hotels Managing Director 2 April 2019 + Telecoms + Beers rd.haigh@ brandfinance.com + Airlines + Oil & Gas Communication For English media enquiries, please contact: Join us at the Brand Finance Global Forum, Konrad Jagodzinki an action-packed day-long event at the Royal Automobile Club in London, as we explore how Communications Director For more information regarding our geographic branding can impact brand value, attract [email protected] Brand Value Reports, please contact: customers, and influence key stakeholders. For all other enquiries, please contact: [email protected] [email protected] Understanding +44 (0)207 389 9400 www.brandfinance.com/events For more information, please visit our website: www.brandfinance.com 6 Brand Finance China 500 March 2019 Brand Finance China 500 March 2019 7 Foreword. A World of What is the purpose of a strong brand: to attract customers, to build loyalty, to motivate staff? All true, but for a commercial brand at least, the first answer must always be ‘to make money’. Opportunities Huge investments are made in the design, launch, and ongoing promotion of brands. Given their potential financial value, this makes sense. Unfortunately, most organisations fail to go beyond that, missing huge opportunities to effectively make use of what are often their most important assets. Monitoring of brand performance should be the next step, but is often sporadic. Where it does take place, it Open to frequently lacks financial rigour and is heavily reliant on qualitative measures, poorly understood by non-marketers. David Haigh As a result, marketing teams struggle to communicate the value of their work and CEO, Brand Finance boards then underestimate the significance of their brands to the business. Sceptical Chinese finance teams, unconvinced by what they perceive as marketing mumbo jumbo, may fail to agree necessary investments. What marketing spend there is, can end up poorly directed as marketers are left to operate with insufficient financial guidance or accountability. The end result can be a slow but steady downward spiral of poor communication, wasted resources, and a negative impact on the bottom line. Brands. Brand Finance bridges the gap between marketing and finance. Our teams have experience across a wide range of disciplines from market research and visual Chinese brands build impressive scale but miss identity to tax and accounting. We understand the importance of design, advertising, + and marketing, but we also believe that the ultimate and overriding purpose of out on further growth, focusing almost exclusively brands is to make money. That is why we connect brands to the bottom line. on domestic market, with less than 10% of By valuing brands, we provide a mutually intelligible language for marketing and country’s brand value attributed to overseas finance teams. Marketers then have the ability to communicate the significance of activity what they do, and boards can use the information to chart a course that maximises profits. Without knowing the precise, financial value of an asset, how can you know if you are maximising your returns? If you are intending to license a brand, how can + Two in every three among China’s most valuable you know you are getting a fair price? If you are intending to sell, how do you know brands generate over 95% of brand value what the right time is? How do you decide which brands to discontinue,