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Chinese brands poised to crack Western global dominance

20 August 2010
This article is more than 13 years old.

Hong Kong, 19th August 2010 - - Chinese brands are poised to crack the global dominance of their Western counterparts, the results of a detailed new brand value study show.

Brands such as China Mobile, ICBC and Midea now have almost as much financial value as household names Verizon, Barclays and Whirlpool, reflecting not only the strength of the businesses they represent in the domestic Chinese market, but also their increasing presence in the international marketplace.

The new study, BrandFinance® China 100 Brands, published today by Brand Finance (Hong Kong) Ltd, indicates that many Chinese brands currently known largely inside the country are poised to have a significant impact on international consumers in the near future.

The total brand value of the top ten China 100 Brands in the report is US$117.795 billion, equivalent to 36.4% of the total US$323.8 billion brand value for the top ten global brands as measured by the BrandFinance® Global 500 survey released earlier this year.

Brand Finance (Hong Kong) Ltd director Anthony Pettifer said: “The results of this study indicate that for China’s brands there are rich enough pickings in the domestic market to build significant brand value at a faster pace than elsewhere. But as they continue to mature at home, some of China’s leading brands are already achieving growth and making their presence felt in overseas markets. While there are only a small handful of truly international brands among the China 100, these brand owners are reporting increasing international sales.”

Of the 100 companies covered by the survey, China Mobile has the highest brand value, at US$22.6 billion. That positions it just below the top three global telecoms brands, currently Vodafone, AT&T and Verizon.

China’s biggest bank, ICBC, ranks second in the list, with a brand value of US$16.9 billion, from where it is set to break into the top 10 in terms of global banking brand value. Third is China Construction Bank, which comes right behind ICBC in the Global 500, at number 55. Agricultural Bank of China (ABC), which listed in Hong Kong and Shanghai in mid-July, entered the China 100 league table at number 5, with a brand value of US$11.4 billion.

At number 17 in the China rankings, white goods manufacturer Midea has a brand valuation of US$2.3 billion, putting it only slightly behind the US giant Whirlpool (US$2.4 billion) in the Global 500 valuation. Haier, Whirlpool’s biggest competitor in terms of current US sales, has a brand value of $1.4 billion, and ranks at number 34.

A further measure of the untapped global potential for Chinese brands is that Haier, which sponsors the NBA in the USA, now claims to be the global leader in its sector by market share.

At the same time, the top ten brands in China account for an aggregate of US$1,483 billion in enterprise value, fully 74% of their global counterparts. This further underscores the potential for future increases in the strength and value of China’s brands and the companies that own them, as well as the certainty that some of these brand names will feature in the upper ranks of global league tables in the very near future.

China’s fascination with brands, underpinned by rapidly-increasing middle class wealth, has already proven massively lucrative for luxury international brands like Louis Vuitton, Gucci, Dunhill, Rolex, Mercedes Benz and BMW (including their Mini and Rolls Royce brands). But it is clearly now also creating growing financial value for Chinese brands as yet largely unknown outside China, such as Snow Beer (#49), electrical retail group Suning (#21), and life insurer PingAn (#13).

Pettifer added: “As Chinese companies extend their brands into new markets there is little doubt we are approaching the point when names like Sinopharm (#54) may become as well known internationally as Pfizer or Roche”. “If you don’t know yet about Yingli, then you didn’t watch the World Cup, where the NYSE-listed solar panel maker was one of the events’ sponsors, reaching out to customers in its main markets of Europe and the US. It is also noticeable that Alibaba (#78), whose registered B2B customers are already twice the size of the population of Australia, continues aggressively expanding its international reach. Other brands such as BYD (#24), Gree (#29) and the recently rebranded Li Ning (#55) are names to watch out for in the future too.”

In common with all Brand Finance league table studies, the China 100 Brands report uses the royalty relief methodology to establish brand value. This valuation method assumes a benchmark royalty rate that would be payable to a third-party if the company did not own the brand. The royalty rate is applied to an estimate of future revenue - based on historical growth from company data, Institutional Brokers’ Estimate System (IBES) and GDP forecasts - to determine an earnings stream that is attributable to the brand. The brand earnings stream is then discounted back to a net present value.

Only Chinese brand-owning companies with a stock market listing are included, so that, for example, Huawei, recognised internationally as a leading telecoms supplier, does not figure in the rankings.

To download the report, please click here

Any media enquiries please contact:

蒋蕾, First City Public Relations: +86 138 0800 7147/ +852 2854 2666

Allan Piper, First City Public Relations: +852 9127 4810/ +852 2854 2666

Media Contacts

Penny Erricker
Communications Executive
Brand Finance

About Brand Finance

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.

Definition of Brand

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

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 Valuation Approach

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.

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