Illustration: Chen Xia/GT

The consultancy BrandZ recently released its 2014 list of the world's 100 most valuable brands. Internet conglomerate Tencent was valued at $53.6 billion, nearly double its value from just a year earlier. This meteoric surge placed it 14th overall, making it the most valuable Chinese brand on the list. Search engine giant Baidu ranked 25th following a 46 percent advance over the previous year.

These results highlight the growing profile of China's market-oriented, innovation-driven technology companies, which can now stand among the most valuable brands in the world. According to the report which accompanied the ranking, about one-fifth of the top 100 brands were engaged in the technology industry. Together they were worth some $827 billion, nearly 30 percent of the total value of all brands listed.

Tencent and Baidu have excelled over recent years in terms of entering into an ever-growing number of fields. This aggressive expansion means that hundreds of millions of Chinese Internet users are now coming into daily contact with entities run by the two tech giants. Tencent, for example, is now a partial owner of e-commerce website jd.com and popular taxi-hailing app Didi Dache. Meanwhile, Baidu owns the video streaming site iqiyi.com and online travel service provider Qunar. Both companies are also reportedly at work on (among other projects) online banking centers and mobile payment systems that will put them into more direct competition with early e-finance pioneer Alibaba.

Standing in stark relief to these powerhouse tech names were China's State-owned enterprises (SOEs). Although nine of the 11 Chinese brands on this year's list were SOEs, their stars were markedly dimmer. China Mobile, which had previously ranked as the country's top brand for several years running, saw its value decline by 10 percent - pulling it from 10th overall in 2013 to 15th. In the financial sector, China Construction Bank dropped 11 spots to 33rd position. Meanwhile, Agricultural Bank of China tumbled from 37th to 54th.

While this shift may be due in part to the slowing Chinese economy, one indicator - known in the report as "brand contribution" - offers some insight into how much a brand's value can be attributed to the brand itself rather than the financial performance of its owner. Both Tencent and Baidu scored a 4 out of 5 on this measure, while most SOEs scored 1 or 2.

Companies in China's State sector may still be leaders in terms of earnings - not to mention access to resources - but most have failed to build solid brands. Without strong competitors at home, SOEs have few incentives to build their brands and differentiate themselves. For cultural reasons as well, many continue to see little value in developing strong emotional bonds with their consumers.

China's policy-driven transformation into a consumer-oriented economy, combined with ongoing reforms to the State sector, indicates the need for SOEs to change their strategies and emphasize brand building. If these enterprises want to stay competitive, they must see brand building as a long-term investment that does not always yield immediate results. Only those with tenacity can reap enormous benefits.

China is still a long way from having its own truly global brand. Tencent and Baidu are virtually unknown outside of China, and the results of numerous polls have shown how hard it is for people outside of the country to name even a single Chinese brand. That may soon change given the recent successes of homegrown consumer technology companies - smartphone maker Xiaomi being one name that immediate comes to mind. Established just four years ago, Xiaomi sold 18.7 million handsets last year, and its appeal with younger consumers in China could serve as a springboard into success overseas.

But when going global, local companies will need to overcome cultural differences and their own lack of experience. Let's take Xiaomi as an example again. The company struck marketing gold with its Weibo account; but on Twitter, which it uses to connect with followers outside of China, the company's cute social media persona and emoticon-laden tweets could strike many Western consumers as childish and immature.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn