• by Laurie Sullivan  @lauriesullivan, March 26, 2018

As tariff discussions between the U.S. and China continue to heat up, Kantar Millward Brown, a WPP company, released its BrandZ Top 100 Most Valuable Chinese Brands 2018 on Monday -- naming Tencent, a provider of internet services, No. 1 with a brand value of $132.2 billion.

The BrandZ Top 100 Most Valuable Chinese Brands 2018 grew 23% in value to $683.9 billion -- up 6% compared to a year ago -- with the greatest one-year increase since publication of the first China Top 100 ranking in 2014, according to Millward Brown. There are now 21 categories with the addition of the logistics category this year.

The report demonstrates the importance of positive relations between the U.S. and China, as the two countries begin negotiations to improve access to each other’s markets after Washington threatened to use tariffs to address trade imbalances.

Consumers globally have become more aware of Chinese brands across categories, according to data from BrandZ and Google. Between 2013 and 2017, the gap between online searches for Chinese brands and brands from other nations has narrowed 29%. This enabled companies like Alibaba Group, an online commerce group, to gain higher recognition.

Alibaba Group takes the No. 2 spot on the ranking with a brand value of $88.6 billion, up 53%. China Mobile telecom came in at No. 3 with $49.2 billion, down 15%, while ICBC banks came in at No. 4 with $37.2 billion and search engine Baidu rounded out the top 5 with a value of nearly $25 billion.

The internet now receives nearly two-thirds -- or 61.2% -- of all media spending. The next most popular advertising medium is TV, which attracts 25.8% of all media spending, according to GroupM.

Especially on the internet, consumers want customized ads based on who will see them, but 39% of Chinese consumers say that rather than integrating their ads, advertisers are trying to be all things to all people.

The report cites innovation as driving growth, as in the integration of online and offline advertising and purchases from the largest retail brands to some of the smallest. On Signals Day, for instance, China’s annual shopping holiday in November, around 90% of Alibaba’s transactions occurred on mobile devices. But this only partially explains 47% increase in category value, up from 22% a year ago.

Alibaba CEO Jack Ma calls this trend the New Retail -- the integration of data, logistics, online, and offline. And although it has been happening for years, the acquisition of brick-and-mortar by internet giants that have access to data on consumer behavior continues to strengthen the phenomenon.

In addition to the concept of “New Retail,” live streaming, location-based services and cashless payments -- which are 50 times greater in China compared with the U.S. -- continue to spur mobile commerce.

The research covers more than 3.6 million consumer interviews and more than 120,000 different brands in over 50 markets globally.