The brand value of the world’s top 10 luxury brands rose on average 28 percent in the last 12 months according to a report released by Kantar Millward Brown this week. The result was a marked improvement over the four percent growth seen in the previous year.
Gucci’s brand value leapt 66 percent to $22.4 billion in 2018, with Dior’s value rising almost as fast, up 54 percent. Other winners include Hermès, Burberry, Rolex, Cartier, and Louis Vuitton, which remains the most valuable luxury brand at $41.1 billion. Meanwhile, brand values for Prada and Chanel slipped.
Brand value in the Brandz Top 100 Most Valuable Global Brands 2018 report is calculated based on the total value to a parent company that comes from the perception of a brand, as opposed to, for instance, its tangible assets. Both current and projected performance are included in the valuations.
Kantar attributed the strong growth in brand value among leading luxury brands to China’s “Moonlight clans” (月光族). This is a group Kantar’s global valuation director Elspeth Cheung described as groups of millennial shoppers happy to spend everything they earn on luxury goods.
The term, like something out of a Tang dynasty poem, puns on the words yue guang, which can be read either as ‘moonlight’ or as ‘monthly emptiness,’ suggesting a white collar professional’s monthly salary has been entirely disposed of before the next one arrives. There’s no poetry in the English equivalent: living pay check to pay check.
“The China Dream message was one of a stronger nation, with more equality, increasing income levels,” Cheung told Bloomberg. “It gave assurance to consumers that the future is bright.” The term moonlight clan is also applied, however, to low income earners in China who spend all their income meeting basic needs.
SCMP claims the moonlight clan first emerged in 2004, when Chinese young adults began making a radical departure from their parents’ more conservative spending habits. The number of people living pay check to pay check in order to buy luxury brands has grown along with appetites for the items and greater availability of easy finance in China.
The Kantar report also found that China now has two companies in the top 10 global brands across all categories. Tencent rose to the top five, while Alibaba entered the top 10. Google, Apple, Amazon, and Microsoft ranked first through fourth.
All three of the fastest growing brands by brand value were also Chinese. JD.com, ranked 59th on the global top 100 by brand value, surged 94 percent in value over the past year. Alibaba was just behind with 92 percent growth, while high-end baijiu makers Moutai came in third with an 89 percent increase in brand value. Tencent also made the fastest risers top ten, coming in seventh on the back of 65 percent growth in brand value.
All together, Chinese brands included in the report increased 49 percent in value year-on-year, and a whopping 1,445 percent over the past 12 years. Fourteen Chinese brands ranked in the top 100 this year, up from just one Chinese brand — China Mobile — 12 years ago.