Spend In China

I find that Hurun Report is doing a fantastic job in China, the equivalent of what Forbes Magazine is doing in the US.

This time, Hurun Report analysed the most valuable brands from China, and of course financial and telecom industries share the top spots. Here are some interesting facts:

* China Mobile brand, worth US$37 billion, tops the list, followed by ICBC and Bank of China
* Seven of top ten Most Valuable Chinese Brands are financial services
* Stock market hike key driver for increase in brand equity
* 29 of the top fifty brands are state-owned

Methodology
The ‘Hurun Report 2007 Most Valuable Chinese Brands’ measures the brand equity
of China’s top fifty brands. Hurun Report’s ranking takes into account a
combination of financial data – to calculate the present value of the earnings
that the brand is expected to generate in the future – and consumer research. It
is the first ranking to include both listed and non-listed companies. As part of
its continued focus into China’s private sector, Hurun Report expanded its
research to produce a list of the fifty Most Valuable Privately-Held Chinese
Brands, brands that have been built up without the strong background of the
government.

“Chinese companies are beginning to realise the contribution to
their corporate wealth of their intangible assets, especially their brands,”
says Rupert Hoogewerf, CEO of Hurun Report. “The dramatic rise in the value of
Chinese brands is an indicator of the growing influence of the middle class.”

Consumer perception of a brand is a key input in determining brand value because
brands are a combination of business performance, product delivery, clarity of
positioning, and leadership. Hurun Report measured consumer perception by a
combination of an online survey of 709 Chinese consumers’ brand preferences
carried out by GMI, a global market research software company, and the number of
times a brand was searched for on Baidu, the leading Chinese language Internet
search provider, over a nine month period between June 30, 2006 and April 18,
2007. Hurun Report ranked the average of the results of these two consumer
surveys on a basis of 5 (high brand recognition) to 1 (least recognition).


As the distribution networks of companies mature, so the equity of a brand
begins to come into its own. In a market with a “middle-class” – earning at
least US$2,500 per year – of between one hundred and three hundred million
people, a figure that is expected to grow to between 400 and 600 million people
by 2015, expect to see the value of these Chinese brands continue to grow in
leaps and bounds.

Financial services stood out as the industry with the most brands on the list
(12), followed by telecoms (6), white goods (6), drinks (5), alcohol (4) and
property (3).

Hurun Report thanks its partners Baidu and GMI.



Sector Analysis of Most Valuable Brands

Financial Services
Banks and insurance brands have seen their brand values increase fastest this
year, as they expand their distribution networks and begin to compete with the
foreign banks. Many consumers find it hard to differentiate financial products,
which is where the impact of the brand comes in. Recent listing in HK and
Shanghai, together with the full weight of the government’s backing, have
strengthened the trust Chinese consumers have in their financial services.

Reference point: Citigroup brand was valued by BusinessWeek/Interbrand at 9% of
its market cap.





Telecoms

Reference point: Cisco was valued by BusinessWeek/Interbrand at 14% of its
market cap.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.

White goods

Reference point: Sony brand was valued by BusinessWeek/Interbrand at 27% of its
market cap.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Drinks

Danone is currently in a dispute with the local management team of Wahaha over
alleged misuse of the Wahaha brand,

Reference point: Coca-Cola brand was valued by BusinessWeek/Interbrand at 64% of
its market cap.

Alcohol

Wuliangye and Moutai led the field in the alcohol brands on the back of a recent
surge of their stock prices.

Reference point: Budweiser brand was valued by BusinessWeek/Interbrand at 31% of
its market cap.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Real estate

There is no reference brand for property on the BusinessWeek/Interbrand
rankings.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Internet

Reference point: Yahoo! brand was valued by BusinessWeek/Interbrand at 15% of
its market cap, whilst ebay was 18%.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Apparels

Li-Ning scored best in the consumer survey. It is also the only brand on the
ranking based on the founder’s name.

Reference point: Nike brand was valued by BusinessWeek/Interbrand at 50% of its
market cap.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Foods

Reference point: Heinz brand was valued by BusinessWeek/Interbrand at 47% of its
market cap.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Retailers

There is no reference brand for retailers on the BusinessWeek/Interbrand
rankings.

* Not ranked for main list. Ranked on Hurun Report Most Valuable Privately-Held
Chinese Brands list.





Background to list

The list of the Most Valuable Chinese Brands has evolved and expanded in scope
these past four years. In 2006 Hurun Report released the first list of the fifty
Most Valuable Brands, but narrowing its scope to privately-held brands only. In
the previous two years, Hurun Report released a list – in partnership with Baidu
– of the one hundred entrepreneurs searched for most frequently on Baidu, an
indicator of their personal brand and influence.



About GMI

GMI (Global Market Insite, Inc.) is the only provider of comprehensive
integrated solutions for global market intelligence for both market research
firms and corporate market research departments at Global 2,000 companies.
Solutions include Net-MR, a suite of software tools to manage and automate
research throughout the project lifecycle, desktop analysis tools, 24/7 service
bureau capabilities, and one of the world’s largest, highly profiled, double
opt-in managed panels, providing reach to six million consumers and spanning
across 200+ countries. In addition, GMI offers high-value, real-time enterprise
feedback solutions for customer, partner and employee programs. Founded in 1999
with world headquarters in Seattle, Wash., GMI has operations on six continents.
In 2006, the company ranked #93 in Inc. Magazine’s Inc. 500, #4 in Deloitte’s
Technology Fast 50 for Washington State and #105 in Deloitte’s Technology Fast
500 for North America. More information is available at www.gmi-mr.com or email
us at info@gmi-mr.com.



About Baidu

Baidu is the leading Chinese language search engine.

Technorati Tags: 300 agricultural bank of china bank of china beijing beverages ccb china citic bank china life china merchants bank china mobile china netcom china telecom china unicom chinese brand financial services forbes magazine guangdong haier icb

One Billion Searchers

China has their own search engines. It is an interesting place, from that perspective.

Stephen Noton, Senior SEO/SEM Consultant, Adverted Internet Advertising Agency.

12 of top 100 china web sites have numbers in the domain. Why? The keyboard in China is a main reason. They have 13,5000 chinese characters.

The way people market in China, is different than in the US. He shows the features on Google China (i.e. Google suggest). He shows Google China popular searches by category. Google also has a algorithmic directory in China.

The Matt Cutts of China Jianfei Zhu, he controls all Asia based Google spam topics. His blog is at GoogleChinaWebmaster.com, but it is currently in Chinese.

Since there is guided search (suggestions), an SEO can use that data to know what to go after in terms of keywords. Also, the popular searches page is a great SEO tool in China. The long tail doesnt really exist today in China.

Bill Hunt, CEO, Global Strategies International

China is paying attention to search. He showed a picture of the audience at an SES in China, how they interested they are in the information.

Issues Faced:
- It is tough and also an advantage to being a foreigner in China
- Budgets are small from local companies
- Can't make changes to the site due to WW restrictions
- Clients are very particular about their contacts in your company
- Some large companies in China more sophisticated than corporate HQ
- Allow the client or interactive agency to save face
- Relationships are critical to success (clients, search engines, influencers)
- Employees make or break a deal
- Much of the ads are still branded and less lead generation or sales focused
- Be flexible and do business the chinese way

State of Search Marketing
- Doubling of attendance at search conferences
-- SES China from 600 to 1000 attendees
-- Question from audience more sophisticated
- China RFPs
- Sophistication of Adoption
-- Blend between scams and more advanced
-- Bigger companies are in many cases more advanced than their HQs
- Demand for Information
-- Traffic to search blogs increasing significantly
-- Increase in Chinese centric blogs and content

State of Search Agencies:
- 1,000 companies offering SEM
-- 10 to 15 top agencies stand out
- Trends
-- Many agencies offer PPC as SEO
-- SEO is simply meta tags
-- PPC is 2 to 3 steps from actual buyers
-- Integrating more advanced techniques
-- Social media optimization
-- Consolidation

Recommendations for Marketers
- Check their credentials and references
- Go visit them and meet their team
- Confirm they are not outsourcing
- Establish goals and document them
- Period checks of the quality of the ads and the effectiveness of campaigns

Recommendations for Agencies
- Pick your team effectively
- Incentives for employee loyalty are critical
- Build relationships with the engines and organizations like SEMPO
- Pick your partner well and do a lot of research on their capabilities and their network

Top Online Activities
- 93% of people in China want news
- 85% Listen and download music
- 84% play games online
- 69% use email

96% access the internet via desktops and 21% use laptops and 27% use mobile devices

Mobile search growth is increasing

Key observations - Baidu:
- Baidu is the most popular search engine for lifestyle searches (ring tones, music)
- Baidu's results are overwhelmingly influenced by paid ads
- Baidu has greatest reach with young lifestyle centric searches
- CPM advertising is most popular with Baidu

Ads are out of control, they cover most of Sina site.

What does this mean to the world?
- New travel opportunities for Chinese have resulted in significant to country information
- Opportunities to market to Chinese if you do it in their terms and comfort level
- Access to information about Chinese companies will be easier to locate
- Access to information about China and the Olympics

Key to Success in China
- Relationships
- Patience
- Due Deligence
- Time in Country
- Open Mind

Technorati Tags: audience bill hunt china bill china popular china web chinese way foreigner google suggest information issues interactive agency interesting place international china jianfei zhu matt cutts popular searches search conferences search engine

China's concern with Wikipedia was its open-edit policy as well as its content

Online encyclopedia Wikipedia was accessible again in China on Sunday 17, June after being blocked for more than 3 years, a move hailed by free media advocacy group Reporters Without Borders.

The main page of the encyclopedia in English-language could be displayed for the first time without using a web proxy. The Chinese-language version of Wikipedia (zh.wikipedia.org) could be displayed too and searches for apolitical terms turned up results, but searches for subjects taboo to China's Communist leadership, such as a specific bloody date in June, remained blocked.

This incident involving students remains among the most sensitive subjects for the country's state-controlled media.

China installed a nationwide firewall and routinely blocks access to Web sites it deems subversive and filters Internet pages for sensitive words.

Blocked mainstream sites include Blogspot, Technorati, Dailymotion, Google Images and many others, often without a good reason, an automatic filter rule catches sites that are "innocent" regarding China's government issues with freedom of speech.

It was unclear why Wikipedia, blocked since October 2004, was again accessible suddenly on Father's Day and if the unban is definitive.

A Chinese Foreign Ministry spokesman said he had not heard of reports regarding Wikipedia to this day, but added that China supports the development of the Internet and now has 132 million users, making it the world's second-largest Internet market.

"We manage the Internet according to our laws and regulations. We abide by our constitutional rules. This is the usual practice for all the countries in the world," spokesman Li Zhe told a news conference.

Rights groups have often accused Western Internet companies of compromising their ethical principles by censoring searches and blog titles in order to do business in China. But Reporters Without Borders said the example of Wikipedia, whose founder Jimmy Wales has preached a strategy of patience in dealing with Chinese authorities, showed that if a foreign company stood firm, Beijing would eventually yield.

"The Chinese government is pragmatic and does not wish to do without foreign businesses in the Internet sector," the Paris-based group said in a statement.

"There is therefore obviously room for negotiation for the US companies who are willing to."

Despite the ban on Wikipedia, which is editable by anyone, a growing community of Chinese users had used proxy servers and other tricks to gain access to the site. Perhaps the Chinese government is coming to terms with a banning policy which is ineffective at best and gives a bad image of rising China.

It was not only the encyclopedia's content that worried the Chinese government, but Wikipedia's openness about the editorial process, which has a strong community-building effect among editors who can quickly mobilize to create content. This worry seems to have gone away, but for how long?

Technorati Tags: apolitical automatic filter business in china china on sunday chinese language version communist leadership constitutional rules dailymotion development of the internet ethical principles foreign ministry spokesman freedom of speech wikipedia