BrandZ: Tencent knocks Chinese state-owned firms off their perch

The internet giant rose seven places to number 14 on the global ranking as its brand value nearly doubled to US$54 billion. In the process it overtook China Mobile as the most valuable Asian brand and also surpassed the only other Asia-based brand in the top 20, ICBC. (See the top 20 below.)

Tencent's rise tells a simple story: an innovative Chinese brand is now at the top, rather than a state-owned enterprise (SOE) that might have benefited from being a monopoly, explained Deepender Rana, managing director of Millward Brown Greater China. "There is a need for the big SOE brands to become more market-oriented, and for Chinese brands to go abroad to become truly global."

Globally, Google has overtaken Apple and is the world's most valuable brand at US$159 billion, an increase of 40 per cent year on year. After three years at the top, Apple slipped to second place on the back of a 20 per cent decline in brand value, to US$148 billion. The company faces a growing perception that it is no longer redefining technology for consumers, reflected by a lack of dramatic new product launches, Rana said.

Google has been "hugely innovative" in the past year with Google Glass, investments in artificial intelligence and a multitude of partnerships that see its Android operating system becoming embedded in other products such as cars, commented Nick Cooper, managing director of Millward Brown Optimor. 

One key finding highlighted in this year's report is how brands such as Google and Tencent are more than just tools, but have become part of our lives.

"They offer new forms of communication that absorb attention and imagination, while also helping organise people's lives at the same time," said Rana. These factors give these brands more 'mind-space'. This trend also helped apparel brand Nike, which offers services such as Nike+ that extend well beyond its functional raison d'etre.

Overall, technology brands performed strongly. Although these companies represent less than a fifth of the top 100, they make up nearly a third of the total value. Service-based brands such as Tencent, Facebook and Baidu are thriving while product-based companies like Samsung, HP and Sony are struggling in relative terms.

COMING IN JUNE: ASIA's TOP 1000 BRANDS For a view of what consumers consider the top brands in Asia-PAcific, tune in for the 2014 edition of Asia's Top 1000 Brands in June, both here and in Campaign Asia-Pacific's print edition. Conducted in collaboration with Nielsen, the Top 1000 is the region's most comprehensive ranking of brands on the region, country and sector level. Check out last year's Top 1000 and a preview of what to expect this year.