In BrandZ's recent report on the World’s Top 100 brands, China liquor brand Kweichow Moutai was the top “riser,” adding 58% in brand value since 2019.
Given the type of year 2020 has been, not surprising to see a liquor company as "top riser" in brand value.
But, it’s curious to see a brand that is virtually unknown out of China as the top riser, with a value that is higher than Nike, Disney, Starbucks, TikTok and a multitude of other global brands.
The formula applied by BrandZ is to isolate contribution of the brand to the overall valuation of the company. The market cap of Moutai is $265Billion - price up 3.3% just today!
So, when trying to wrap one's head around this; (1)it's a big company with a very high valuation (way too high IMO), and (2)"Intangibles" including "brand" account for a lot of its value. Both the product (which people buy and hold, often only for financial purpose) and the stock (seen as safe haven) are both highly speculative.
Not sure there are too many lessons for the brand managers among us… but:
Branding - in large part - is about building a peerless image/trust. Even though there are thousands of other baijiu brands in China, Moutai has monopoly-like power.
