More and more private Chinese companies are making efforts in brand building.
The Shanghai-based Hurun Report recently listed the top 50 private brands, with
the dairy company Mengniu Group, IT giant Huawei Corporation, and beverage
company Wahaha ranking top 3 on the list. Our Shanghai correspondent Xiaoyu
takes a closer look.
Among the 50 top private brands,10 are from the fast-moving consumer goods
industry, 8 from IT, and 8 are clothing brands, including the nationwide-famous
Wahaha Beverage, Gome Home Appliances Chain, and Alibaba IT Company. The No. 1
on the list, Mengniu Dairy, has made their brand's value account for 46% of
their total capital.
Hurun Report initiated an investigation into how much China's fledging
private companies are investing in the promotion and building of their brands.
Chief Executive Officer Hu Run described the purpose of doing so.
"Today in China is a brand year. It's a single culture, single market. So for
any company especially in the fast moving consumer goods industry that can build
a strong brand, has got a very strong potential for profits later on."
From traditional promotion methods like TV ads, to today's diversified means
like sponsoring entertainment programs and charity events, some private
companies are expanding investment in brands-building to make their brands
outstanding, easily remembered by their customers, and more importantly, gaining
value day by day. Hu Run explains what a brand's value means for a whole
company.
"In a simple way, it's in every dollar I earn, how much is coming directly
from the brand. Like Wahaha Company, nearly 50% of its total profit is coming
from the brand, so they should be really focusing on the brand as an independent
product."
Though progress is obvious, Zhang Jun, a professor at Shanghai's Fudan
University, said private Chinese companies have to work harder to compete with
international players.
"As the environment for the development of Chinese private companies is very
tough, under competition with state-owned and transnational companies, they have
usually grown by manufacturing rather than brand building or trading. So there's
still a long way to go, at least 20 years, to make these newly built brands
mature and internationally competitive."
The professor points out that a lack of legal protection and a lack of
capital are the 2 major obstacles for Chinese enterprises to develop their
brands.
(For more biz stories, please visit Industry Updates)
