China 2016: PERFORMANCE ANALYSIS | CATEGORY OVERVIEW
Consumer spending impacts category growth and value concentration shift
Despite turbulence in China’s stock market and the economic slowdown, consumers continued to spend on their daily needs and even on big-ticket items, with purchasing possibly postponed, but not canceled, according to BrandZ™ research. How consumers spent their money is reflected in the relative value changes across the 23 categories in the BrandZ™ Top 100 Most Valuable Chinese Brands 2016.
New spending priorities produced a significant shift in the distribution of the BrandZ™ China Top 100 total value. These include a desire for services and experiences, and a shift in focus from price alone to quality and value for money, with a related willingness to pay a premium, when merited.
Just two years ago, banks accounted for the largest segment of brand value, 30 percent. Banks and telecom providers, two categories dominated by State Owned Enterprises (SOEs), together comprised almost half of the China Top 100 total value. Technology produced just 16 percent of value.
Today, technology, a category known for its market-driven brands, accounts for 27 percent of BrandZ™ China Top 100 value. Banks and telecom providers produce only 32 percent of value, and banks alone contribute less than a fifth. Retail, an inconsequential factor in 2014, now comprises 12 percent of value, driven by the inclusion of Alibaba and JD.com in the ranking.
he seven categories in the BrandZ™ China Top 100 Brands 2016 that increased most in value, 38 percent or more, include: personal care and jewelry retailers, both up 61 percent, real estate, insurance, airlines, travel agencies, and cars. The next tier of brands, which improved a healthy 29-to-32 percent in brand value, includes technology, home appliances, alcohol and furniture.
The third group of categories – hotels, healthcare, education, food and dairy, and banks – performed more modestly in brand value growth. The following categories declined in brand value: telecom providers, retail, oil and gas, catering and apparel. The baby care and soft drinks categories are new this year to the BrandZ™ China Top 100 ranking.
MEASURING CATEGORY YoY VALUE CHANGES
Year-on-year category value changes are based on brands that rank in the BrandZ™ Top 100 Most Valuable Chinese Brands. The number of brands in each category varies, from 11 alcohol brands to one brand in the catering, baby care, furniture, and soft drinks categories. Stories in this section of the report describe the dynamics that influenced value changes in each category.