View the full Brand Finance Chinese Pharma 2023 Report here
China, 17th July 2023 – Overall consumer perceptions of Chinese pharma brands remain positive, with good perceptions of quality and consumer care over profits, according to the Brand Finance Chinese Pharma report, which analyses and ranks the top 15 most valuable and strongest Chinese pharma brands. Popularity, consumer-centricity, product range and value are top drivers while availability is central to driving consideration for Chinese pharma brands. In addition, Chinese pharma brands are perceived being as more accessible but perceptions of community support and scientific credentials have declined.
In this report, which surveyed the opinions of 1,000 respondents aged 18-75 across the nation, Sinopharm sits at the top of China’s most valuable pharma brands. The brand recorded a 7% brand value increase to US$3.8 billion. Additionally, Sinopharm saw an increase in its brand strength rating from AA- to AA. The brand launched its smart pharmacy which utilises AI analytics and big data to achieve sales damage prevention, intelligent monitoring and other similar service-based functions. This allowed for the improvement in health services offered, incentivising higher consumer demand.
Guangzhou Pharmaceutical retained 2nd position in our rankings, with its brand value growing by 8% to US$2.2 billion and recording an improvement in brand strength rating from AA- to AA. The brand was the only pharma brand specialising in TCM in Guangzhou that received an “Excellent” rating by the National Administration of Traditional Chinese Medicine (NATCM). This accolade is due to a multidisciplinary approach which integrated technology as part of its R&D processes despite it being a TCM brand. Thus, Guangzhou Pharmaceutical’s adaptability to technology places it in a strong position to reap the rewards of future technology and strategic partnerships.
In Brand Finance’s secondary ranking specifically focusing on TCM brands given their unique standing within the broader industry, Guangzhou Pharmaceutical lays claim to being the most valuable TCM brand once again with Yunnan Baiyao following closely in 2nd place. Pien Tze Huang, a new entrant in our brand rankings, completes the top three in 3rd place. Yunnan Baiyao partnered with technology giant Huawei through a “Comprehensive Cooperation Agreement on Artificial Intelligence Drug R&D” arrangement which intends to enhance the scientific and technological content of Yunnan Baiyao’s products.
999 (brand value up 9% to US$302.7 million) and Tong Ren Tang (brand value down 4% to US$278.69 million) finish the list of the top five most valuable TCM brands in 4th and 5th positions respectively. In 2022, on World Stroke Day, Tong Ren Tang held its “Peer Support for Stroke Prevention” campaign for the seventh consecutive year in Hong Kong. It screened live broadcast lectures and provided visits to stroke rehabilitation centres to raise awareness about stroke prevention among the younger generations.
With a Brand Strength Index (BSI) score of 73 out of 100 and a corresponding AA brand strength rating, Yunnan Baiyao also holds the distinction of being the strongest Chinese pharma brand. Tong Ren Tang (BSI 72), Sinopharm (BSI 70), Guangzhou Pharmaceutical (BSI 70) and Pien Tze Huang (BSI 69) complete the top five strongest brands. Our study found that TCM brands are gaining prominence and traction due to improved saliency, with Yunnan Baiyao and Tong Ren Tang taking the lead in familiarity growth percentages of 22% and 20% respectively to reach 89% and 83%, respectively. Yunnan Baiyao saw an improvement by 7% in usage levels to 91%.
“Having established their domestic consumer base during the pandemic, many Chinese pharma brands are venturing into global markets. It is crucial that they continue to focus on innovation by enhancing R&D capabilities and incorporating digitalisation and artificial intelligence into their products. Doing so will allow them to better cater to the needs of their consumers, creating for them competitive advantages over their pharma counterparts from other regions.”
Scott Chen, Managing Director of Brand Finance China
View the full Brand Finance Chinese Pharma 2023 Report here
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Note to Editors
Presented by brand evaluation consultancy Brand Finance, the Brand Finance Chinese Pharma 2023 Report is original market research on the perceptions of the 15 Chinese pharma brands featured in the ranking. The opinions of 1,000 respondents aged 18-75 across the nation were surveyed.
In addition to measuring overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity and business performance. Respondents were asked about the 15 Chinese pharma brands and their opinions on a variety of metrics including reputation, recommendation and trust.
About Brand Finance
Brand Finance is the world’s leading brand evaluation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts over 5,000 brand valuations, supported by original market research, and publishes over 100 reports that rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
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Disclaimer
Brand Finance has produced this study with an independent and unbiased analysis. The data derived and opinions presented in this study are based on survey findings, publicly available information, and certain assumptions that Brand Finance used where such data was deficient or unclear.
Brand Finance accepts no responsibility and will not be liable in the event that the information relied upon is subsequently found to be inaccurate. The opinions and data analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any individual, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
Brand Finance is an independent consulting firm. The objective of the present survey is to disseminate the outcomes of the perceptions gathered in a survey conducted in March 2023 with no intention of exerting any influence on public opinion or electoral outcomes of any of the cities or countries comprised in the study.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
