Realizing The Potential

BEST CHINESE BRANDS 2007

Realizing the Potential

We are pleased to present our second annual ranking of
the best Chinese brands, in cooperation with 21 Century
Business Review. This year, we examine first-class Chinese
brands more closely to help Chinese companies and their
executives take notice of the deeper mindsets and methods
influencing branding situations, learn from the experiences
of successful practices of Chinese brands, and get inspira-
tion from our ranking.
According to Interbrand, the brand value reflects the dis-
counted cash flow of the total earnings it will bring to the
brand owner in future. In other words, the brand stands for
a part of the future earnings of the company. Therefore, for
the company’s management, brands are economic assets
that need serious management. The change in the brand val-
ue of a company comprehensively reflects the performance
achieved by the management team using various tools.
When we follow strictly the methodology of brand evaluation,
we receive a clear signal of the progress outstanding Chinese
brands are making. The minimum brand value required to
reach our list this year increased from 1 billion to 1.1 billion
RMB, but the number of listed brands increased from 20
to 25, and 13 brands grew by more than 10%. At the same
time, the number of brands we consider prominent, but can
not list due to the lack of public data or their B2B charac-
teristics, is rising as well. All these facts prove our observa-
tion last year: branding has become a management focus
of many excellent Chinese companies, and it is starting to
produce an abundant return.
With this background, we have attached more attention this
year to the stories behind the success and failure of brands
which are an indelible part of the Chinese civilization, and
are rapidly becoming part of the global market. Together
with all of you, we wish to discover the principals that drive
the progress of Chinese brands rather than add meaningless
riot to the business world.
During the long process of our evaluation, we have tried
to understand the brand context among miscellaneous data
and special management patterns of each company. Clearly,
the idiosyncrasies of Chinese companies are fostering some
new ideas about branding. It is the hope of Interbrand and
21 Century Business Review that, in our report, you will see
the essence of successful Chinese brands emerge.
Sincerely,
Frank Chen
Chief Executive Officer
Interbrand China
TABLE OF CONTENTS

page

1. Why the Ranking is Important 1

2. The Interbrand Method for Valuing Brands 2

3. Branding in China 4

4. Best Chinese Brands 2007 7

5. Brand Commentary 8

6. Other Prominent Chinese Brands 17

Appendices Frequently Asked Questions 22

Disclaimer: All brand value estimates in this study have

been calculated by processing data sourced from publicly
available information for the purpose of demonstrating
Interbrand's proprietary methodology. The accuracy of
the brand value estimates relies on the quality of this
input data, which would normally be sourced from the
client organization.
1.
WHY THE RANKING IS IMPORTANT

The branding practices employed by Chinese enterprises
are becoming more and more sophisticated. We hope our
annual ranking of the Best Chinese Brands assists in putting
emphasis on the contribution that brands make to business
performance. The brand values are top-line measures of eco-
nomic performance, stating what the brand is worth overall,
and among competitors.
IS OUR MARKE TING EFFEC TIVE AND EFFICIENT?
Your customers make decisions every day between you
and your competitors. Analyzing the role of brand in those
decisions helps you to focus your strategy on the attributes
that differentiate your brand from others and to strengthen
your relationship with your best customers, ensuring future
earnings.

The most important information comes when one looks
behind the number – as a single number only tells so much.
It is more important to understand what drives brand value:
intangible earnings (the cash flow of a business not associ-
ated with such tangible assets as equipment or materials),
the role of brand (a measure of how much brand influences
purchasing decisions), and brand strength (a benchmark of a
brand’s relative risk compared to competitors).
Understanding the drivers of brand value can inform man-
agement action, from overall business strategy to specific
marketing tactics. It is an easy-to-use metric to help brand
owners determine where they are, where they are going, and
how to get there. Brand valuation can assist an enterprise in
brand building by answering the following questions:
ARE SHORT-TERM TAC TICS DRIVING LONG-VALUE?
By analyzing the strength of your brand, you can target
marketing campaigns to the most valuable customers, in the
most competitive manner, to drive short-term sales without
sacrificing long-term brand strength and relevance.
Most importantly, this ranking is presented to foster debate
and put greater emphasis on the practice of branding. Our
goal is to communicate clearly that brands are important as-
sets requiring proactive and consistent investment, manage-
ment, and measurement.

AR E W E I N V E S T IN G A D E Q U AT E LY I N O U R B R AND?
Putting an economic value on a brand (overall and by seg-
ment) can help make a strong business case for marketing
investments, overall and across a brand portfolio.

1 Best Chinese Brands 2007

2.
THE INTERBRAND METHOD FOR
VALUING BRANDS
Interbrand has valued over 4,000 brands covering every
business sector, around the world, over the last 20 years and
retains a clear position as thought leader and innovator. This
wealth of practical knowledge provides the basis for all of
our league-tables, at a global and market specific level.
To arrive at a particular ranking we first establish clear crite-
ria for inclusion. This ensures we have the required informa-
tion to complete the valuation and that the brands conform
to the geographic or industry specific nature of the study.
For our annual Best Chinese Brands study, Interbrand fol-
lows a specific set of criteria:
The brand must originate in Mainland China.
This means that foreign-owned brands operating in China
are excluded (example, Coca-Cola). This means brands that
were once Chinese-owned but are now foreign-owned are
excluded (example, Zhonghua part of Unilever). This means
brands that originate or are based in Hong Kong, Macau, or
Taiwan are excluded.
The brand owner must be a publicly traded company.
The company to which the brand belongs must be a listed
company on a stock exchange. This enables Interbrand to
access the financial information to perform the valuation.
The brand must be consumer-facing.
This excludes holding companies and business-to-business
entities that do not directly interact with consumers (ex-
amples, China Resources, CNOOC).
The brand’s financial performance must be isolated.
This means companies with several brands that do not have
separate brand-specific financial data were excluded.
The Interbrand method for valuing brands is a proven,
straightforward and meaningful formula that examines
brands through the lens of financial strength, importance in
driving consumer selection, and the likelihood of ongoing
branded revenue. Our method evaluates brands much like
analysts would value any other asset: on the basis of how
much they are likely to earn in the future. There are three
core components to our proprietary method:
Financial Analysis
Our approach to valuation starts by forecasting the current
and future revenue specifically attributable to the branded
products. Non-branded items such as amortization of good-
will and finance costs are subtracted to assess what portion
of those earnings is directly attributable to the brand.
All financial analysis for the Best Chinese Brands 2007 study
is based on publicly available stock exchange listed company
information. These valuations represent “existing use values”
not “market values” which could be considerably different.
Best Chinese Brands 2007 2
2. The Interbrand Method for Valuing Brands
Role of Brand Analysis
A measure of how the brand influences customer demand
during the purchase process is applied to the intangible
earnings to arrive at Branded Earnings. For this ranking, in-
dustry benchmark analysis for the role brand plays in driving
customer demand is derived from Interbrand’s database of
more than 4,000 prior valuations conducted over the course
of 20 years. In-market analysis is used to establish individual
brand scores against our industry benchmarks.
3 Best Chinese Brands 2007
Brand Strength Score
This is a benchmark of the brand’s ability to secure ongoing
customer demand (loyalty, repurchase and retention) and
thus sustain future earnings, translating branded earnings
into net present value. This assessment is a structured way
of determining the specific risk to the strength of the brand.
We compare the brand against common factors of brand
strength, such as market position, customer franchise, image,
and support.
3.
BRANDING IN CHINA
China’s economy is developing at an amazing rate. As the
most valuable asset for an enterprise, brand is making an ir-
replaceable contribution in this rapid economic growth. With
an increasing per capita disposable income, and a wider
range of goods and services from which to choose, brand is
playing a more important role in the purchase process. And
although most consumers are still price-sensitive, Chinese
brands are just beginning to realize their great potential.
Compared with world-renowned brands, Chinese brand
values are still a smaller proportion of market capitalization.
Meanwhile, some of the top Chinese brands have enormous
room for growth. For example, China Life already owns
almost 50% of China's life insurance market, but only about
20% of the population is insured.
This is the second time we have evaluated the most valuable
brands in China. A quick glance shows the volatility in the
composition and value of the brands. This situation is due to
three factors. First, many large Chinese enterprises are still
in the process of going public. Second, the reform of China's
capital markets has strengthened the incentive for manage-
ment to more strictly supervise its financial information,
leading to fluctuations in profits, and therefore brand value.
Third, some Chinese enterprises are making large capital
investments to expand their business, which has temporary
negative impact on brand value. Whether these investments
will translate into returns in brand value still remains to be
seen.
Despite the volatility, we have identified a number of positive
trends in this year’s rankings:
The rise of market-oriented brands
Last year’s list was dominated by large-scale state-owned
enterprises with special advantages: dominant market share,
protection from competition, and consumer recognition ac-
cumulated through a long history. But this year, several high-
ly market-oriented, competitive brands joined the list. These
brands have taken the lead in management innovation and
brand-building in their industry, including reorganizing their
marketing departments, appointing chief marketing officers,
increasing brand-building budgets, tracking results and so
on. Like sports brand Li-Ning who is competing head-to-
head with world renowned brands Nike and Adidas in the
Chinese market. And Chinese search expert Baidu who has
out-maneuvered strong pressure from Google with better
localization, brand communication and understanding of the
Chinese language. In 2006, Baidu's market share had risen
to 60%, winning the lead position in China’s market. Young
and highly market-oriented brands, like Li-Ning and Baidu,
are listening carefully to the market, gradually accumulat-
ing brand value, and taking their place alongside China’s
resource-rich enterprises.
Globalization
Former Secretary-General of United Nations Kofi Annan
once said that arguing against globalization is like argu-
ing against the law of gravity. Today, as the world becomes
flatter, no ambitious enterprise can evade globalization.
With multinational brands entering China, many outstanding
Chinese enterprises like Haier, Lenovo, TCL and Huawei are
ready to compete on a global stage. There is no doubt this
crucial step will be difficult. Chinese brands must learn to
adapt to global consumer demands, market environments,
business models, languages, cultures, and staff values.
Best Chinese Brands 2007 4
3. Branding in China
However, Chinese brand leaders have begun to break
through. Lenovo’s merger with IBM’s PC business and its
sponsorship of the 2008 Olympics are leading to global
brand awareness. According to a 2007 Interbrand survey
among 700 professionals, Lenovo's aided brand awareness
reached 59%, ranking it first among Chinese brands, and
already exceeding some international brands.
From learning to creating
During the early stages of development, most Chinese
brands spent their time studying the successful experience of
foreign brands. After years of practice, some Chinese brands
have migrated from learning and following to creating and
exploring their own unique path. They are rooted in the soil
of a vast market, searching for their own brand principles in
China, and creating localized best practices. Vanke is among
these outstanding brands. Typically, real estate companies
in developed countries diminish the role of the corporate
brand in favor of property brands. But in China, where mixed
developer quality has tested consumer confidence in buying
houses, Vanke treats its corporate brand as strategic re-
source and has cultivated it for long-term development. In a
real estate market where developers are often criticized and
questioned, Vanke is respected and beloved as a brand with
rich principal and personality.
This year’s ranking also reflects some major challenges in
Chinese brand growth:
Few knowledge-intensive and luxury brands
Compared with the Best Global Brands, China’s list lacks
knowledge-intensive brands like Microsoft, Google and Intel,
and luxury brands like Rolex and Louis Vuitton. Although
there are examples like Lenovo or Moutai and Changyu, they
5 Best Chinese Brands 2007
have earned their brand images through business acumen,
long history and classical heritage. Knowledge-intensive
brands can build high technology barriers by investing
in R&D and strengthening the awareness of intellectual
property protection. Luxury brands can earn higher profits,
giving them the resources to reinvest in marketing and cus-
tomer experiences. In a sense, the culture for these modern
conveniences comes from the West. But with the phenom-
enal growth of Chinese consumer purchasing power, the
breeding process has begun. Chinese brands willing to make
a breakthrough should focus on relevant aspects of Chinese
culture and create lifestyle brand symbols.
From special advantage to brand equity
As mentioned earlier, some Chinese brands have special
advantages; telecommunications and banking are conspicu-
ous examples as they are core infrastructure for the coun-
try. Their advantages lie in ownership by the government,
barriers to competition or from historical heritage, and can
bring high profit and dominant market share. However,
as deregulation accelerates, consumers are beginning to
seek personalized solutions, creating opportunities for new
foreign and local entrants. Enterprises that rely on their
scale and heritage as their only weapon will quickly be at a
disadvantage. They must find ways to transfer their special
advantages into brand equity to re-ignite progress. Lenovo
is an outstanding example. In its early days, Lenovo received
tremendous support from the Chinese Academy of Sciences.
But Lenovo also started its brand journey early and gradually
transferred its advantages to brand strength. The experience
of Lenovo is worth learning for many Chinese brands.
3. Branding in China

Deepening brand experience

Brand experience is the ultimate brand management test.
Successful global brands deliver their core idea to the
consumer at every touch point, using advanced technology
to create a powerful experience. After more than ten years
of careful management and continuous innovation, some
Chinese brands have succeeded in building high aware-
ness and preference among consumers. However, as the
development of these brands continues, a typical question
is how they can enhance their brands further. Deeper brand
experiences mean more customer-oriented interactions that
lead to deeper reflection and action by the consumer. The
banking industry is a good example; to take their brands
to the next stage, they must gather insights by different
customer groups, deliver more focused services and design
more unique business environments.

Conclusions
We see great potential in Chinese brands. A group of 20-
year-old enterprises are very likely to become the new brand
leaders in China. Through patient development, continuous
study of international brands, and fully using their local wis-
dom to create best practices, Chinese brands will continue
to grow in value for years to come.

Best Chinese Brands 2007 6

4.
BEST CHINESE BRANDS 2007

7 Best Chinese Brands 2007

5.
BRAND COMMENTRAY
Rank: 1
Industry: Telecommunications
History: Separated from China Telecom in 2000
Commentary:
China Mobile holds 68% of the 461 million mobile subscrib-
ers in China, ranking first in the world in network scale and
number of customers. In 2006, China Mobile owned 45%
of the operating revenue and 60% of the profit of the total
telecommunications market, securing its dominant position.
Quite impressive when you consider that more than half the
Chinese population still does not own a mobile phone.
China Mobile’s comprehensive network offers the widest
coverage, high quality, rich variety of choices and first-class
customer service. It recently updated its brand proposition
to be a "World-class Enterprise and Mobile Information Ex-
pert", providing comprehensive information services instead
of just traditional voice business. And its three sub-brands
are all clearly positioned. GoTone targets high-end custom-
ers. M-zone focuses on young fashionable people. And
“Easy-own”, accounting for over 70% of all mobile subscrib-
ers, is positioned around the idea of "Easy Life of My Own".
The brand stands at the first position in our list for the sec-
ond consecutive year and with its recent merger with Paktel,
has started the globalization journey.
Rank: 2
Industry: Financial services
History: One of four major banks separated from PRC's
Central Bank in 1954
Commentary:
CCB reported 17% and 18% growth respectively in revenue
and profit last year, driving a healthy development in its
brand value. The bank maintains its competitive edge in
housing and other construction loans, one of the hottest
economic sectors in China today. It holds 28% market share,
second highest among Chinese peers. CCB is also seeking
overseas expansion opportunities, merging its retail business
with Bank of America in Hong Kong last year.
The bank generated 93% of total revenue in 2006 from inter-
est income, which may bring some challenges as deregula-
tion, disintermediation and government policy become less
favorable in the future. Though CCB is strong in its core
business, a real-estate bubble and weaker consumer brand
represent substantial risk for the bank. Now is the time for
CCB to reinforce its relationship with customers by defining
its brand and investing in its customer experience.
Best Chinese Brands 2007 8
5. Brand Commentary
Rank: 3
Industry: Financial services
History: Established in 1912, one of four separated from
PRC's Central Bank in 1954
Commentary:
Bank of China possesses an unrivaled international bank-
ing network, dominates international trading and foreign
exchange services and is the most globalized bank among
its Chinese peers. With a 45% net profit increase in 2006,
BOC is transforming itself into a modern commercial bank,
and remarkably generated 18% of its total revenue from
non-interest income, the highest ratio among all state-owned
Chinese banks. The bank is also looking for new revenue
sources and recently merged with Singapore Aircraft Leas-
ing Enterprise (now BOC Aviation).
BOC’s tagline, “Always With You” shows its commit-
ment to customer service, helping customers travel and
study overseas, but more remains for BOC to deliver on its
promise. Bank of China put substantial effort into marketing
and branding activities, e.g. Bank of China is the only bank
partner of 2008 Olympic Games, but its large marketing and
M&A expenditure limited the growth of its brand value this
year. BOC will need some time to prove to the world those
expenses will be transformed into brand power in the future.
Rank: 4
Industry: Insurance
History: Restructured in 1999 based on first insurance com-
pany founded in 1949
9 Best Chinese Brands 2007
Commentary:
China Life is now the largest life insurance company in
China, providing a full range of individual and group life,
accident and short-term health insurance. In 2006, the
company’s total revenue grew by 50%, capturing 45%
of the market share. At the heart of China Life is an exten-
sive distribution network covering almost every county in the
country, employing 652,000 exclusive agents working
in 18,000 field offices and 87,000 outlets.
China Life’s brand is equally as impressive, enjoying 92%
brand awareness in a recent survey and capturing the
highest share of voice in CCT V advertising. The insurance
industry in China is opening to foreign competition, and
domestic rivals are strengthening, but the company managed
to double its brand value in 2006, the single highest growth
on our list this year. And the company has not been a strong
player in property insurance, which grew much faster than
life insurance in 2006, showing substantial growth opportu-
nity for the brand in the years to come.
Rank: 5
Industry: Financial services
History: China Industrial and Commercial Bank was founded
in 1984
Commentary:
Industrial and Commercial Bank of China (ICBC) succeeded
in listing in 2006, making it one of the largest IPOs ever, and
a global business celebrity virtually overnight. The largest of
the state-owned banks, its strength lies in a robust banking
network, with the largest number of branches, ATMs and
geographic coverage in China. As a result, ICBC’s personal
banking revenue hit 34% in 2006, the highest among all
Chinese banks, but 8% of revenue is from non-interest
income, showing an over-dependence on loan services.
5. Brand Commentary

With its wide footprint, ICBC may rely too much on its
network and long history in the Chinese banking industry.
Heritage is declining in importance as a differentiator, and
the brand has struggled with customer service, a common
criticism of ICBC. With foreign banks entering the market,
ICBC is already facing a churn in high-end customers to
global banking brands like Citbank and HSBC. Instead of
waiting for its network to capture customers, ICBC must bet-
ter use its brand to maintain a leading position in a rapidly
changing market. We are happy to see that ICBC is currently
improving in the right direction.
Rank: 7
Industry: Insurance
History: Started offering property in 1988, then life in 1994
Commentary:
Ping An is a key player in China’s insurance industry, ac-
counting for 17% of the life insurance market and 10% of
the property insurance market. Although Ping An is the sec-
ond largest insurance company, it ranks far behind market
leaders in any one category. And while it is considered the
rookie in the industry, 2006 was a big year for Ping An.

It was among the first Chinese financial companies to inte-

Rank: 6 grate insurance, securities, trusts, banking, asset manage-
Industry: Telecommunications ment and annuity services into one financial holding group.
History: Restructured in 2002, but established even before At the same time, Ping An has aggressively introduced
the PRC was founded advanced IT systems for better information and risk manage-
ment. The company’s goal is to offer integrated financial
Commentary: services and the consolidation has been quite successful,
China Telecom was once the only choice. After several reflected in its more than 60% increase in brand value this
spin-offs and new competitors, it’s still the biggest fixed-line year.
and broadband provider in China with 61% of all fixed-line
and 55% of all broadband subscribers. It’s a leader in data
services, and it is expected to win a 3G license, enabling it
to offer wireless services. But like every market around the
world, mobile operators are improving coverage, cutting
prices and expanding value-added services – causing a
significant reduction in the fixed-line voice business. And
PHS subscribers are gradually turning to wireless for better Rank: 8
voice quality and mobility. With this trend, China Telecom
Industry: Financial services
achieved only 3% revenue growth and saw a 2% decline in
History: Founded in 1987, inheriting its name from a 100
profit this year.
year-old investment agency
Facing these shifts, China Telecom began a strategic
transformation in 2005 from a traditional telecom network
operator to a modern integrated information service provider,
including a breakthrough in the SMEs market. Based on this
substantial effort, China Telecom’s brand still maintains con-
siderable value, ranking second among all telecom operators,
despite adverse market conditions.

Best Chinese Brands 2007 10

5. Brand Commentary
Commentary:
China Merchants Bank’s long-lasting and great efforts on
brand building have brought a sustained brand value. In
2006, over five million users held a CMB credit card and
innovations in customer service has largely improved the
customer experiences.
A narrow geographic coverage and comparatively small
customer base has been the bottleneck for CMB’s brand
value growth. But despite some short-term expenditures on
growth, the Chinese banking industry is becoming more and
more open, and CMB stands to gain great growth along the
way.
Rank: 9
Industry: Alcohol
History: The "Spirit of China" is more than 200 years old
Commentary:
Moutai specializes in the production and sale of Chinese
distilled spirits, holding 1/3 of the market for high-end sales
volume. Historically, Moutai was served at many high profile
political, military, and diplomatic occasions, establishing
it as the liquor of choice for important occasions. Today,
high quality and unique taste are the most distinguishing
characteristics that make Moutai a household brand name.
In recent years, Moutai has expanded its product portfolio
to include 5 year, 15 year, 30 year, 50 year and 80 year aged
products, reinforcing the overall high-end brand image of
Moutai.
11 Best Chinese Brands 2007
But it faces challenges from not only its direct competitor,
Wuliangye, but also wine and beer brands. Nowadays, young
people revert to wine and beer instead of Chinese traditional
spirit, because they want to pursue a healthier and modern
lifestyle. Seen as the national spirit of China, Moutai needs
to expand its brand idea, strengthen its premium brand im-
age and face the challenges of younger audiences.
Rank: 10
Industry: Telecommunications
History: Founded in1994
Commentary:
In 2006, China Unicom held 32% of the market for mobile
subscribers, and is the second largest operator in China with
a full range of voice, SMS and other value-added business,
such as data, IP telephone and multimedia. China Unicom
has a CDMA as well as a GSM network, giving it some
technology advantages and a basis for brand differentiation.
After several years of marketing incubation, the CDMA busi-
ness was finally profitable and is the most important reason
China Unicom enters the list this year. Moreover, Unicom’s
value-added business is growing very quickly and accounted
for 1/5 of its total revenue.
China Unicom is using its increasing strength by introduc-
ing several new sub-brands like U-power and Uni to target
different audiences. But it’s overall brand image suffers from
a perception of poor voice quality and limited network cover-
age. The company promises customers to “Get Connected",
but it still needs to deliver a corresponding experience to
enhance its brand.
5. Brand Commentary
Rank: 11
Industry: Information Technology
History: Founded in 1984, changed its name from Legend
Group in 2005
Commentary:
Lenovo is the largest Chinese PC manufacturer, and the
third largest in the world, providing products to more than
160 countries around the world. In 2005, it completed the
acquisition of IBM’s PC business and by the end of 2006,
more than 60% of Lenovo’s turnover came from markets
outside Great China. The company is focusing more on
transactions with individual and SME customers, and this
transformation is paying back in the U.S. market where it
showed profitability in first quarter of 2007.
Though Lenovo faces declining margins for the whole PC
industry and fierce competition from HP, Dell, and Acer, the
brand managed to grow its value by almost 60% this year.
We attribute this growth to a huge investment in marketing
and branding activities, including replacing IBM to become
the only Chinese official global partner of the 2008 Olympic
Games. As one of the most successful brands in China,
Lenovo carries high expectations from Chinese people and
can do more to more clearly assert its brand differentiation.
Rank: 12
Industry: Financial services
History: Bank of Communications Company, Limited (Bo-
Comm) was originally established by the state in 1908.
Commentary:
BoComm always takes initiatives ahead of its local competitors,
e.g. first Chinese bank to finish its financial reorganization, first
to introduce a strategic investor (HSBC), and first to be listed on
HKSE. Though BoComm lacks the wide geographic distribution
of an ICBC, its outlets are mostly concentrated in affluent areas,
and it has a sophisticated creditworthiness system which it has
applied to its 40 million retail customers and cardholders.
BoComm is also aggressive in its marketing and branding.
Recently, hurdles champion Liu Xiang became a spokesman for
the bank. It also launched two wealth management brands last
year, OTO Fortune and BoComm Fortune, but can do more to
promote its corporate level brand.
Rank: 13
Industry: Internet
History: Established in 1997, listed on Nasdaq in 2000
Commentary:
After a long recession in the internet business, Netease has
finally succeeded in achieving consistent profitability. Its
"portal + online game" business model is differentiated from
Sina (portal + online advertisement), Shanda or The9 (online
game) and Tom (portal + wireless). Its market share in online
gaming grew from around 24% in 2004 to 35% in 2005 and
has stabilized around 30% in 2006.
A key strength is its R&D capability, representing Chinese
game developers rather than buying foreign games, espe-
cially from Korea. Competitors like Shanda are introducing
new business models such as free-of-charge play (instead
of pay-for-play) that are finding success in the market, and
this will put intense pressure on Netease, who still stick to
the non-free game business model for now.
Best Chinese Brands 2007 12
5. Brand Commentary
Rank: 14
Industry: Financial services
History: One of the core subsidiaries of China CITIC Group
founded in 1987
Commentary:
CITIC Bank counts half of China’s Fortune 500 companies
as customers, and was publicly listed in April 2007. It is ben-
efiting from the broader macro growth in China, and is able
to offer customers integrated financial services together with
other companies under the CITIC Group, including securi-
ties, funds, trusts, futures and more.
Though CITIC Bank is one of the fastest growing in China,
it still has some key weaknesses. It has a relatively small
market share, and though it has raised its brand awareness
through marketing communications and sponsorships, it
does not seem to have a specific and differentiating brand
proposition that can be communicated to the public.
Rank: 15
Industry: Insurance
History: Founded in1949
Commentary:
With more than 4,500 branches nationwide, PICC is one of
the largest property insurance underwriters in China. While
PICC’s premiums income increased over 2005, its market
share in property insurance fell, due to fierce competition
from other insurance companies. The company is trying to
advance its position, introducing telephone direct sales that
are showing some favorable results, and sponsoring the
Beijing 2008 Olympic Games, which will substantially raise
its awareness.
13 Best Chinese Brands 2007
Adhering to the idea of "People Insurance Brings Benefit
to the People", PICC aims to transform the company into
a world-class modern financial group. The group stretched
its business into life insurance at the end of 2005, and will
see greater benefit if it can leverage the 50 years of history
in its brand.
Rank: 16
Industry: Financial services
History: Established in 1996, publicly listed in 2003
Commentary:
Minsheng Bank was formed with the mission to ensure
private businesses receive fair financing compared to large
state-owned enterprises. It is also the only bank in China
whose majority share holders are private companies. While
still small in scale, its advantage is flexibility. For example,
while others target large acquisition deals overseas, Minsh-
eng became the largest shareholder of a highly profitable
foreign bank, the Union Commercial Bank Holdings.
Minsheng’s focus on fair financing for smaller enterprises
has become one of the most distinguishing traits of its
brand. With many competitors beginning to focus on this
segment, Minsheng is well-positioned. But it must consis-
tently communicate its brand idea to its target audiences,
deliver a customer experience aligned with its brand idea,
and help customers associate Minsheng with its unique
focus.
5. Brand Commentary
Rank: 17
Industry: Alcohol
History: Founded in 1950’s, renamed Yibin Wuliangye in 1959
Commentary:
While lacking the long history and high profile presence of
Moutai, Wuliangye is recognized by consumers as a pre-
mium but more modern brand. The company has a complex
portfolio of high-end and low-end brands designed to pro-
tect its market share, but it has diluted its premium image.
And its retail distribution system has lead to lower prices
which have impacted the brand.
In 2006, Wuliangye started to take action. It reshuffled its
marketing team, giving clearer responsible for the Wuliangye
brand, for OEM marketing, and for other sub-brands. And
it has raise its product pricing by 5%, indicating a more
rigorous approach in the market. Wuliangye’s brand value
leapt ahead by 30% this year telling us the measures are
taking effect.
Rank: 18
Industry: Alcohol
History: Founded in 1892
Commentary:
Changyu’s four main product lines are wine, brandy, sparkling
wine and healthy liquor, covering the middle and high-end
of the market. It has a unique sales system, including over
1,300 of its own sales representatives and more than 3,800
regional dealers, which gives the company more control over
the sales channel.
Changyu cooperates closely with foreign wine brands in new
product development, production and branding, including
two joint ventures for its premium Chateau product. Changyu
is a frequent advertiser, and has introduced innovative
marketing techniques in China. It operates a wine culture
museum and Castel Chateau to build its brand image, and
launched a wine club and wine magazine to interact with
customers and foster a wine drinking culture among its
target audiences.
Rank: 19
Industry: Real estate
History: One of the earliest real estate companies estab-
lished in 1984
Commentary:
Vanke focuses on residential property, and is widely rec-
ognized as the best real estate developer in China. It is an
innovator in what it calls the "industrialization of real estate
development" by standardizing and modularizing production
to significantly improve the quality of houses. This strategy
has paid off, helping Vanke achieve 30% CAGR over the last
five years.
Vanke is an innovator in branding as well. It targets white
collar workers with its motto “Build Boundless Life” and
a humanistic tone of voice in communications in a sea of
“location, location, location”. It has established a reputation
for high quality and superior service, a rare exception in real
estate. The company actively pursues CSR programs, and its
Chairman, Mr. Wang Shi, is an adventurer and famous brand
symbol. As a result, Vanke is able to use its brand to attract
customers to its properties, and has been a major driver of
its booming business performance.
Best Chinese Brands 2007 14
5. Brand Commentary
Rank: 20
Industry: Retail
History: Founded in 1987
Commentary:
Suning is the second largest home appliance retailer in
China, just behind Gome. The industry as a whole is highly
decentralized, with the top two holding 6% market share,
compared with 25% for their counterparts in the U.S.
Suning and Gome are long-time competitors and expanded
rapidly last year. Suning adopted a stable expansion pattern,
invested in a sophisticated IT system, and achieved solid
performance to reach our list for the first time. But it faces
intense pressure in the future: Gome purchased the fourth
largest retailer, Best Buy entered the market and merged
with the 3rd largest retailer, and a number of alternative
retail channels are emerging.
Rank: 21
Industry: Electronics
History: Entered appliance industry in 1991
Commentary:
Gree is the largest air conditioner manufacturer in the world,
selling 13 million units in 2006, and also produces a range
of other household appliances. It has a reputation for good
quality products and outstanding innovation, all at a reason-
able price. But perhaps its greatest success has been its
distribution strategy. Instead of relying on big retailers like
Gome and Suning, Gree established a network of distribu-
tors tightly aligned around common interests.
15 Best Chinese Brands 2007
Gree is actively promoting its brand to the international mar-
ket. It has established a sales and service network in more
than 100 countries for its air conditioners and more than 70
countries for its household appliances. The company faces
intense competition from established local and international
competitors, and will need to advance its brand to maintain
its leadership position.
Rank: 22
Industry: Dairy
History: Less than 10 years old
Commentary:
Mengniu is one of the fastest growing brands in China. It is
located in Inner Mongolia, the milk capital of China, and has
built strategic alliances or joint ventures with a number of
local and foreign players, including Wuhan Frealth, Arla, and
Danone. Core to its strategy is building its own brand. At
launch, it spent one-third of its initial capital on advertising
and other marketing communications. And while it is now
one of the top two players in the market, it still spends about
9% of its turnover on advertising.
Mengniu is an active sponsor of nationwide events, includ-
ing China’s application for the 2008 Olympics, an anti-SARS
campaign, the Shenzhou V spaceship flight, and the “Super
Girls” contest. Its corporate citizenship and social respon-
sibility approach has proven quite successful by aligning
Mengniu with China’s growth miracle The company’s pri-
mary challenge in the future is the reduction of import tariffs
for foreign products (as mandated by the WTO agreement)
which will bring intense competition from global brands.
5. Brand Commentary

Commentary:
China Overseas Property is the second largest property
developer in China, with multiple projects in over 14 cities.
Its background in engineering and one-stop offering (design,
Rank: 23
development, sales, property management and customer
Industry: Apparel
service) has helped the brand earn a reputation for excellent
History: Founded in 1990 and named after the “gymnastics prince”
quality and high integrity.

Commentary:
Like some other large state-owned enterprises, China Over-
Li-ning’s broad product portfolio includes footwear, apparel
seas Property maintains a very low-profile in the market.
and accessories for running, basketball, soccer, tennis and
It can further strengthen its brand by more actively com-
fitness. In communications, the brand integrates its oriental
municating with customers, which will improve customer
essence with a spirit of sports to deliver a unique character
preference and ultimately its brand value.
that highlights the distinctive cultural difference between
Li-ning and its international peers. It is also sponsors the
Chinese national team and its products are featured each
time an athlete step on the medals podium.

Internationally, Li-ning has started to expose its brand more,

sponsoring international sports games and teams, and
Rank: 25
cooperating with NBA stars like Shaquille O’Neal. Although
Industry: Internet
it has generated some international awareness, Li-ning cur-
History: Founded in 2000, listed on NASDAQ in 2005
rently generates little sales outside China and international
competitors like Nike and Adidas are aggressively promoting
Commentary:
their brands in China. With local competitors offering similar
Baidu is the most successful Chinese internet search engine
products at a lower price, Li-ning will need to rely on its
and online media platform. Its name is inspired by an old
brand even more in the future.
Chinese poem, and literally means “hundreds of times”. Bai-
du’s breakthrough has been the application of state-of-the-
art technology to the ancient language of Chinese, enabling
users to find exactly what they want without compromising
their cultural identity. Baidu dominates the Chinese market
with over 60% market share, keeping global competitors like
Google, MSN and Yahoo! at bay.

Rank: 24
As the most powerful online media platform, Baidu is a lead-
Industry: Real estate
ing voice in China’s internet industry. It generates influential
History: Established in Hong Kong in 1979, active in Main-
ranking lists using internet users' search data and holds
land China from 1988
executive summits to help companies better understand the
importance of internet marketing. Baidu recently made the
decision to expand its business into the Japanese market.
Want to know its progress? Then “Baidu” it.

Best Chinese Brands 2007 16

6.
OTHER PROMINENT CHINESE BRANDS
Industry: Electronics
Commentary:
Haier is the leader in home appliance manufacturing in
China. Its brand proposition of sincere service has been well
recognised by consumers. Haier’s investment in overseas
markets has paid off in building this iconic Chinese brand.
It employs many principles of successful global brand man-
agement and will continue to be a force domestically and
internationally.
Industry: Telecommunications
Commentary:
One of the most influential Chinese companies for technol-
ogy innovation, Huawei has regularly invested in its brand.
It has been a prominent player in the global market and a
top rival for many first class IT companies. It launched its
new brand identity last year in order to refresh its communi-
cations to customers and other stakeholders.
17 Best Chinese Brands 2007
Industry: Alcohol
Commentary:
Tsingtao is one of a few Chinese brands that are well known
in the global market. It is a brand with over 100 years of
history, but has recently made several acquisitions to fulfill
its ambitious strategic goals. Though Tsingtao beer export
volume only accounted for less than 2% of its total sales in
2006, it has been responsible for more than half of China’s
total exported beer for many years.
Industry: Media
Commentary:
As the most influential television media in China, CCT V has
a huge geographic coverage with an audience of up to 1
billion through 16 broadcast channels. Its role and influence
in Chinese life is unparalleled. Because of its dominant
influence, CCT V has become a strategic media resource and
partner to most of the top brands in China.
6. Other Prominent Chinese Brands
Industry: Airline
Commentary:
To some extent, Air China has tried to control the risk caused
by the dramatic increase in oil prices by hedging in the fu-
tures market. But it still caused a more than 30% operating
profit decrease, which is the major reason why Air China fell
out of the list this year. Nevertheless, Air China is the most
successful airline brand in China, taking continuous initia-
tives to build its brand, including becoming the only airline
partner of the 2008 Beijing Olympic Games.
Industry: Steel
Commentary:
Bao Steel is a giant within China and around the world. With
roughly 20 million tons of steel output each year, they ac-
count for a large part of the market share in stainless steel,
and steel materials for home appliances and cars. They are
committed to high quality and continuous innovation. Histori-
cally, branding in commodity industries is overlooked, yet,
Bao Steel recognizes the value and is appropriately investing
in its brand.
Industry: Retail
Commentary:
Gome is the biggest home appliance retailer in China. By
mid-2006, Gome successfully completed its merger with
China Paradise, the No. 3 Chinese home appliance retailer.
At the same time, Gome launched the “Eagle” brand under
which it planned to sell high-end appliances. Gome`s mas-
sive expansion model has failed to deliver customers with
desirable experiences in the past year leading it to fall off
our list this year. We still think Gome has large potential to
be a great brand if it addresses this problem.
Industry: Telecommunications
Commentary:
By the end of 2006, ZTE created more than 40% of its
revenue from oversea markets. At the same time, ZTE has led
a fierce price war, which explains the dramatic profit shrink
of ZTE last year. A price war not only impacts the bottom
line, but dilutes the brand performance and image. ZTE is in
a transitional phase of globalization and needs more time to
secure a consistent position in our brand rankings.
Best Chinese Brands 2007 18
6. Other Prominent Chinese Brands
Industry: Internet
Commentary:
Alibaba is an excellent proof of the principle that a brand
is not successful solely from a big idea, but a sophisticated
system behind the big idea. When everyone in the online
B2B market was trying to attract more eyeballs, Alibaba was
putting the concept into operations. After launching sev-
eral sub brands to solve the trust and payment problems of
online transactions, Alibaba succeeded in boosting its online
revenue. Now Alibaba has over 24 million subscribers from
more than 200 countries and regions. After a few years of
stable and solid growth, Alibaba recently went IPO on the
Hong Kong Stock Exchange.
Industry: Internet
Commentary:
Sina is one of the most influential Chinese Internet opera-
tors. As the biggest interactive online portal, it enjoys the
highest volume of visitors and the greatest share of online
advertising.
19 Best Chinese Brands 2007
Industry: Travel services
Commentary:
Founded in 1999, Ctrip is the most famous bricks and clicks
travel brand, focusing on flight and hotel booking through
call center and online channels. Unlike its peers, Ctrip has
found a profitable business model to re-invent a traditional
business using cutting-edge technologies. By the end of
2006, the brand achieved steady performance growth and
gained USD 100 million in revenue and USD 31 million in
net income.
Industry: Automobile
Commentary:
After ten years of operation, Chery has become one of
the three most successful Chinese automakers producing
automobiles under its own name. Chery competes effectively
against strong local brands and foreign auto brands that are
agreesively penetrating the market. Sticking to its proprietary
innovation, Chery has grabbed about 8% market share and
has become fourth largest auto manufacturer in China. At
the same time, Chery seeks to break into the global market
and exported over 50,000 vehides in 2006.
6. Other Prominent Chinese Brands
Industry: Automobile
Commentary:
Geely officially became an auto manufacturer in 1997. After
ten years of operation, Geely stood out as the second largest
auto manufacturer. Focused on the brand idea of “Creating
cost-efficient life”, Geely is dedicated to building affordable
cars for consumers all over the world. At the end of 2006,
Geely sold 204,000 vehicles, accounting for over 5% of the
total sales volume in the Chinese auto market.
Industry: Hotel
Commentary:
Home Inn is the most successful brand of economic hotels
in China. Founded in 2002, Home Inn only took 4 years to
list itself on Nasdaq. Ctrip supplies Home Inn with stable
sources of consumers, giving Home Inn’s a strong competi-
tive advantage. Furthermore, Home Inn’s customer experi-
ence consistently delivers on its brand promise: “Your home
away from home”. Now Home Inns is operating 171 hotels
in 48 cities throughout China, well-placed for the surging
number of business and leisure travelers.
Industry: Telecommunications
Commentary:
Originally only operating in 10 provinces in northern China,
CNC has now expanded into almost all major provinces. Like
China Telecom, the major part of CNC`s revenue is from the
fixed-line. But CNC has not performed as well in the battle
against substitution of mobile services. From a branding
perspective, CNC’s brand has a less differentiated and less
relevant image compared to its telecom peers. And in China
today, standing still means stepping backwards.
Industry: Apparel
Commentary:
Meters/bonwe was founded in 1995 in Wenzhou. It provides
apparel of all sorts to youth and has become one of the
most famous fashion brands in China. By the end of 2006,
its sales revenue hit RMB 4 billion. and seized the atten-
tion of its target audiences. Employing young celebrities Jay
Zhou and Wilber Pan as brand spokesmen, Meters/bonwe
has expanded to 2000 franchised stores, indicating a very
prosperous future for the brand.
Best Chinese Brands 2007 20
6. Other Prominent Chinese Brands

Industry: Education Industry: Dairy

Commentary:
New Oriental is the most sucessful private education institu-
tion, concentrating on foreign language training and educa-
tion. Their motto, “Hew a stone of hope out of the mountain
of despair and you can make your life a splendid one”, has
inspired more than one generation of Chinese youth to fight
for their future. The founder of New Oriental, Mr. Yu, has
transformed himself from a spiritual leader for a new gen-
eration of students to a successful business elite.
Commentary:
Yili is one of the two biggest dairy manufacturers in China.
It originated from Inner Mongolia, now the milk capital of
China. Facing strong head-on competition from its biggest
rival, Yili is attaching more importance to its brand, becoming
the only dairy sponsor of the 2008 Beijing Olympic Games.

Industry: Pharmacy

Commentary:
As a traditional Chinese medicine chain store, Tongren-
tang has leveraged its rich heritage spanning more than
300 years. In the competition between Chinese herbs and
western medicine, Tongrentang has played an important role.
Its challenge now is to leverage that heritage and make it
relevant to customers who are loyal to the brand.

21 Best Chinese Brands 2007

Appendix:
CHINA BEST BRANDS-FAQ
W hat is B rand V alue?
Brand value is the dollar value of a brand, calculated as net
present value (NPV), or today’s value of the earnings the
brand is expected to generate in the future. Like any other
NPV, brand value is measured at a point in time, based on
the assumptions and information available at that point in
time. Brand value is calculated according to the most widely
accepted and used valuation principles. Brand value is,
therefore, comparable to business and all NPV-based asset
valuations.
The valuations of brands appearing in the China Best Brands
survey are calculated in their current use to their current
owner. They, therefore, do not necessarily represent the po-
tential purchase, extension, or licensing value of the brands.
W hy value brands?
The purpose of these valuations is to demonstrate to the
business community that brands are very important business
assets and, in many cases, the single most valuable company
asset. We also aim to make branding and marketing key
business issues that have direct impact on shareholder value.
How does I nterbrand derive the value of
the brands?
Brand value is the net present value, or today’s value of the
earnings the brand is expected to generate in the future. This
valuation approach is a derivative of the way businesses and
financial assets are valued. It fits with current corporate fi-
nance theory and practice. A description of our methodology
can be found in section two of this report.
What was the basis of the financial
assessments ?
Interbrand formed an initial consideration set of brands
owned and operating in China. Annual reports sourced from
various stock exchanges were used to examine the revenues,
earnings, and balance sheets of the brand-owning compa-
nies.
What was the basis for the marketing
assessments ?
Our experience in creating and managing brands for over 30
years has resulted in the development of brand metrics that
consider:
• Level of differentiation the brand has achieved;
• Success of the current position;
• Ability to control that position; and
• Differentiation sustainability.
Our expertise was supplemented with press articles, analyst
commentary, and market research.
Why are certain brands not on the list ?
Interbrand employed specific criteria in order to conduct the
valuations:
The brand must originate in Mainland China.
This means that foreign owned brands operating in China
are excluded (example, Coca-Cola).
This means brands that were once Chinese owned but are
now foreign owned are excluded (example, Zhonghua part of
Unilever).
Best Chinese Brands 2007 22
This means brands that originate or based in Hong Kong,
Macau or Taiwan are excluded.
The brand owner must be a publicly traded company.
The company to which the brand belongs must be a listed
company on a stock exchange. This enables Interbrand to
access the financial information to perform the valuation.
The brand must be consumer-facing.
This excludes holding companies and business-to-business
entities that do not directly interact with consumers (ex-
amples, China Resources, CNOOC).
The brand’s financial performance must be isolated.
This means companies with several brands that do not have
seperate brand-specific financial data were excluded.
What are the limitations of these valuations ?
Compared to doing a proper formal valuation project for the
brand owner, the limitations are: they are based on public
data only; there is no input from management (in order to
maintain consistency); certain key brands are not listed;
and only a limited amount of time can be spent on any one
brand. The main limitation is that the valuations tell you how
much value the brand creates, but not what is driving brand
value or what would increase brand value going forward.
A formal valuation would do just this and Interbrand works
with our clients to understand the factors that drive value to
their brand and what measures could be taken to leverage
that value.

Please refer to the ‘The Interbrand Method for Valuing

Brands’ section of this report.

W as there a limit im P osed by industry?

No. However, one of the requirements of a leading brand is
that it is leading in its category. The mark of leadership is not
just about market share but also about acting like a leader
– setting trends, having high quality standards, commanding
authority in the category, and so on. So, there are brands
that have market share ranking in the top three of their
category but did not make the cut, and brands that are not
top-three that did. The rules described are guidelines and,
ultimately, each brand was assessed for inclusion on its own
merits.

23 Best Chinese Brands 2007

Best Chinese Brands 2007 24
CONTACT US

China Media and Business Inquiries:

Frank Chen
CEO
Interbrand China
T: +86 21 6124 8188
frank@interbrandcn.com

2007 Report Inquiries:

Jonathan Chajet
Asia-Pacific Strategy Director
Interbrand China
T: +86 21 6124 8188
jonathan@interbrandcn.com

Brand Valuation Inquiries:

Renzo Scacco
Director, Brand Valuation
Interbrand Australia
Tel: +61 3 8416 3200
renzo.scacco@interbrand.com.au

Global Media and Business Inquiries:

Graham Hales
Chief Marketing Officer
Interbrand London
Tel. +44 7710 742347
graham.hales@interbrand.com

To learn more about how to build brand value, visit both:

www.interbrand.com

www.brandchannel.com