Private brands ready for takeoff in China

The combined brand value of Chinese enterprises rose significantly last year with growth being driven by market-driven brands or private companies without government backing, rather than State-owned enterprises, said a survey.

Market-driven Chinese brands almost doubled in value in 2014 from a year ago, while SOEs saw their share fall by 9 percent, said the 2015 BrandZ? Top 100 Most Valuable Chinese Brands, released by global communications group WPP and global brand agency Millward Brown, in Beijing on Tuesday.

"However, SOEs continue to remain significant contributors to the overall ranking and still play a key role in China's broader economy. At the same time, their performance highlights the increasing competition from the private sector in China," said Doreen Wang, global head of BrandZ, Millward Brown.

Though e-commerce giant Alibaba, whose IPO raised a record $25 billion, was responsible for most of the brand value growth, market-driven brands still posted growth of about 43.5 percent after excluding Alibaba's contribution, she said.

Market-driven brands account for 47 percent of the total value of the BrandZ China Top 100, up from 29 percent a year ago, said the report. The SOE proportion of the China Top 100 total value, however, declined to 53 percent from 71 percent a year ago.

Chirantan Ray, deputy managing director at Millward Brown, said: "Compared with State-owned companies, those driven by the market shift more swiftly to the demands of the consumers, both at home and abroad. The disproportionate growth rate of market-driven brands suggests that Chinese brand owners are increasingly getting accomplished in building valuable brands."

Chinese brands have also come of age, he said. Internet giant Tencent was ranked No 1 among market-driven brands, after its brand value more than doubled in a year, Online retailer Alibaba was ranked No 2.

"The rise of Tencent and the strong performance of Alibaba reflect the strong brand value growth of the market driven brands, compared with SOEs," said Ray.

Both Tencent and Alibaba leapfrogged long-time leader China Mobile, which had held the top spot since the ranking was launched in 2011.

"Consumers worldwide have been increasingly accepting Chinese brands, because they see them as meaningful and dynamic and not just because they are well-known," said Wang from Millward Brown.