Asian brands have taken an enormous leap in brand development in 2018.
Through the development of ecosystems that provide services across multiple platforms, Asian brands, specifically China-based companies, are penetrating a previously U.S. dominated list.
According to BrandZ’s Top 100 Most Valuable Brands 2018 list, Chinese internet giants Tencent (US$200,987m brand value) and Alibaba (US$113,401m brand value), have moved into the top 10 most valuable brands, pushing out major brands like IBM and Verizon. Tencent has even passed Facebook (US$162,106m brand value) to sit as the 5th most valuable brand in the world.
Asian Brands Are Fastest Movers
At a total of US$556.8bn, BrandZ reports that Asia experienced a 42% increase in total brand value from 2017 to 2018. This performance surpassed all regions by a significant jump, with North America growing 23%, Continental Europe at 15%, and the UK at a modest 7%.
BrandZ’s report further shows that Asian brands, individually, are dominating the fastest growing brands on a year-on-year basis. JD.com, Alibaba, and Moutai lead the list with each experiencing over 80% growth since 2017.
Source: BrandZ Top 100 Most Valuable Brands 2018
Chinese Brands Dominate Asia’s Growth Story
Taking a closer look into Asia, we see that Chinese companies have monopolized the region. In BrandFinance’s list of Top 50 Most Valuable Brands, 19 are Asian, 15 of which are Chinese. Out of the top 10 Asian brands, 7 are Chinese. The report further goes on to state that since 2008, China’s total share of global brand value has grown from 3% to 15%.
The European Brand Institute’s 100 Top Asian Brands list finds Chinese brands possess over half of the total brand value at 56.23%.
Source: BrandFinance Top 500 Most Valuable Brands
In contrast, Interbrand, a leading brand consultancy, reported only 11 Asian brands, two Chinese, in their 2017 Best Global Brands List. In their Best Chinese Brands of 2018 Report, however, they list Tencent, Alibaba, and China Construction Bank as the most valuable brands in China. It will be interesting to see how this evaluation will reflect in their upcoming 2018 Best Global Brands List.
Ecosystem Businesses Are Best
BrandZ suggests that one possible reason for such a fast brand value growth rate can be attributed to the successful development of a product/service ecosystem that “serve customer needs and influence how the shop and conduct other transactions.”
Alibaba serves as a great example to this trend. Alibaba began as an ecommerce platform but has since invested in technologies such as: cloud and payment services; a broader ecommerce platform serving B2B, B2C and C2C customers; and one of the biggest small business portals in China, TaoBao. By doing so, they are able to penetrate multiple facet of their consumer’s daily life, keeping customers dependent on their services to build long term brand loyalty.
Tencent's WeChat platform can perform a multitude of daily tasks for an individual's work and private life - from payments, instant messaging and information services.
It can be likened to Apple’s ability to build strong ecosystems. By intertwining their devices and making it seamless to transition across their different platforms, Apple has strong ecosystem dependency, just as Alibaba or Tencent has.
Other Asian Brands Performing Well
Asia’s brand growth is accelerating and while Chinese names lead the market, other Asia countries also have their own winners:
- TCS (TATA Consultancy Services), an IT services company based in India reported a 14.4% brand value increase from 2017, from US$9.081 billion to US$10.391 billion. This was the largest growth in the industry globally. (Brand Finance)
- BCA Banks, from Indonesia, is the fastest growing brand in Indonesia in 2018. It grew 13% since 2017, evaluating at US$10.5 billion. (BrandZ)
- Shiseido, a high-end cosmetic company from Japan experienced a 42% increase in brand value from 2017. With the implementation of its new 3-year plan to expand into international markets, Shiseido will be an interesting brand to watch. (BrandZ)
- LG Group from South Korea experienced a 38% growth in brand value from 2017 to 2018. Through a shift towards new premium products, LG’s attempt to enter a more premium technology market may prove to be profitable in the near future. (Brand Finance)
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This article was written by Yash Sadani