JEREMY MAGGS: SA’s top brands gaining ground
Should MTN’s trend of losing brand value continue, there is every chance that Vodacom will close the gap and become SA’s most valuable brand in the near future.
According to consultancy Brand Finance, MTN remains the country’s most valuable brand by far — worth R40.8bn and with an increase of 10% on last year, but nearly 30% lower than its 2014 peak.
Every year Brand Finance publishes its top 50 brands table. Capitec is the fastest-growing bank brand and has risen 25% in value to R5bn.
And the retail industry shows signs of recovery, recording 9% growth overall.
Brand Finance notes that MTN’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, fuelled by regulatory, macroeconomic and political challenges. Vodacom is SA’s second most valuable brand, with a value of R24.3bn, but it is slowly closing the gap.
Brand Finance Africa director Jeremy Sampson says that despite being plagued by a recession, political instability and a higher unemployment rate, the total value of brands in the table has increased 3% year on year, from R384bn in 2016 to R395bn in 2017.
The banking sector, with nine brands, outperforms all other categories, with a total brand value of R100bn, making up nearly 25% of the total brand value of the table.
The telecoms sector follows, with R73bn, and retail is third at R49bn. Capitec is not only the fastest-growing bank brand, but the fastest-growing brand overall.
There are nine retail brands in the table, with a total value of R48.6bn.
Spar is the fastest growing, up 15% in value to R10.4bn, and Shoprite, the most valuable retail brand, is up 2% to R11.1bn. Clicks is up 7% to R3.4bn.
Brand Finance calculates brand value using what is termed royalty relief methodology. This determines what a company would be willing to pay to license its brand as if it did not own it. This approach involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for the use of the brand.
Part of the process is calculating brand strength based on a number of attributes, such as emotional connection, financial performance and sustainability.
There are three new entries this year. IT service management company EOH, with a brand value of R2.9bn, is placed 37th. Baking giant Sasko comes in at 45, with a value of R1.9bn, and Outsurance is at 50 (R1.6bn).
Rounding out the top five SA brands by value are Standard Bank (R20.7bn), Sasol (R19bn) and Woolworths (R18.7bn).
Iconic beer brand Castle Lager is up two places to 11, with a value of R11.3bn.