Best China Brands 2021: A proverbial growth
“Dig the well before you are thirsty” is not only the title of a successful book dedicated to networking published in 1999. It is, in addition and above all, one of the most well-known and shared Chinese proverbs on the Internet, as it condenses in a beautiful diverse lesson applicable to the world of business and brands: the importance of forecasting, planning and looking to the long term.
As the second economic power, China has played a leading role in the global market on its own merits. Undisputed protagonist during 2020, its economy was the only one among the big ones that closed the year in green; its GDP increased by 2.3%, while that of the US fell by 3.4%. Much has been written about the way in which China, the first country to be hit by the pandemic, managed its economy so that, finally, it only suffered a quarter of losses and its recovery would draw the shape of V. The Asian giant was undoubtedly, the first to start the road to recovery and, although its growth seems to stagnate in the second half of 2021, its GDP shot up 18.3% in the first quarter of 2021, an absolute record.
The fascination that China provokes in the rest of the world has to do with a cultural phenomenon that allows an enriching coexistence between innovation and tradition. The millennial teachings of its wealthy literary stream in the form of proverbs continue to rule in the minds of the managers of the Chinese economy and brands through a line of thought that has been proven correct in these times. If Europe and the US realized something during the past year, it was their overwhelming disadvantage compared to China (and its brands) when facing a health crisis such as the coronavirus in industrial, logistical, and technological terms. Not surprisingly, the Asian country was able to increase its exports in 2020; from January to November, accumulated exports rose 2.5%.
Now, almost two years after the start of the crisis, our colleagues in Shanghai have published a new Best China Brands report, the ranking that includes the 50 most valuable Chinese brands and the impact that the management of the coronavirus has had on their value. And the results, to tell the truth, are not surprising: the total value of the 50 brands has increased by 47% compared to 2019; only six brands (12% of the total) have lost value, while the logistics industry has increased by 142%.
The results of Best China Brands 2021 confirm that in times of crisis, agile and empathetic brands are capable not only of alleviating the negative impact, but also of exponentially boosting results.
“The longer the string, the higher the kite will fly” is another Chinese proverb that conveys the need to “play the long game.” Over the last decade, the Chinese market has been populated by companies that have developed one of the most advanced technological ecosystems in the world, thus facilitating the digitization of the population and the growth of digital services and electronic commerce, so crucial for the months of confinement and return to relative normality.
The leading brands in Best China Brands are a clear example: Tencent leads the ranking, which has increased in value by 89% since 2019, followed by Alibaba Group, which almost doubled in value (97%) in just two years. Tencent owns the most popular social app in the country, WeChat; but, in addition, it is immersed in a multitude of industries: video games, cinema, television, animation, music, electronic commerce, financial services, healthcare, etc. For its part, Alibaba, although it is known as one of Amazon’s main rivals, has also developed capabilities to compete in other areas: cloud computing, artificial intelligence, fintech, entertainment, etc.
The technological avant-garde in China is also reflected in the new entries to the ranking, among which Pinduoduo stands out (in 23rd position), another giant in the development of electronic commerce that decidedly opted for collection points instead of delivery to home, which has allowed them to promote interactivity with their customers with lower prices. In 2020, the company estimated its annual active users at 788.4 million, a metric in which it would surpass even Alibaba.
Other new additions also stand out such as Bilibili, an entertainment platform in full expansion, or Great Wall Motor, the most important car manufacturer in China, which started its internationalization process two years ago and already manufactures in Russia and Thailand, with plans to also produce in Brazil and India.
In short, the results of Best China Brands 2021 confirm that in times of crisis, agile and empathetic brands are capable not only of alleviating the negative impact, but also of exponentially boosting results, as we could see in Best Global Brands 2020 or in Best Korean Brands 2021. The case in China also encourages us to build brands for the future, nurtured by an ambition that escapes the tyranny of short-termism.