Standard Bank is SA’s most valuable brand, according to the BrandZ Top 30 Most Valuable SA Brands ranking of 2018. Valued at $4.788bn, Standard Bank beats FNB (valued at $3.675bn) and Vodacom (valued at $3.258bn). 

SA’s banking category dominated the ranking, with four brands in the top 10: Absa at number 7 and Nedbank at number 8. These, and the remaining two banks – Investec and Capitec – collectively account for 34% of the Top 30’s brand value. This percentage is considerably higher than bank brands in the top 30 in most countries.

Discovery and Old Mutual were ranked numbers 9 and 10 respectively. This means that financial services brands, including both banking and insurance brands, collectively represent just over 43% of the top 30’s brand value.

The telecommunications category is SA’s next most valuable. Vodacom was placed third and MTN fifth.  The third most valuable group is retail, with Woolworths at number 11, Shoprite at number 14 and Mr Price at number 17.

The BrandZ ranking is commissioned by WPP and conducted by Kantar Millward Brown. The methodology employed mirrored that used to calculate the annual BrandZ Top 100 most valuable brands ranking. The local country ranking specifies that the brand must have been created in SA or be owned by a publicly traded enterprise, or its financials must be published in the public domain.

Brand value is calculated by multiplying the financial value of assets under the name of the brand with the proportion of financial value generated by the brand’s ability to increase purchase volume and charge a premium.

The study found that brand value is primarily driven by local consumption. The top 30 brands derive 81% of their exposure locally, compared with brands in developed markets like France, Germany and Italy, where companies get most of their exposure from beyond their countries’ borders. Local brands therefore have plenty of room to grow global revenues, the study revealed.

The total value of SA’s top 30 brands equates to $42.63bn.  This is low, even when compared with other underdeveloped markets such as Indonesia and India. The study found that local brands continue to rely on a largely functional message to sell and are not yet relying on emotional appeal to connect to customers.

Category leaders, including Nando’s, FNB, Vodacom, DStv, Outsurance and Pick n Pay, try to connect emotionally with their customers only sporadically, choosing in the main to focus on utility, price and functionality. The study suggests that now might be the right time to consider appealing emotionally, particularly as global brands with extensive experience in creating demand vie for attention locally.

Three hospital brands – Netcare, Life Healthcare and Mediclinic – made the top 30 ranking, more than in any other country. This is likely due to SA’s overburdened national health system.

Click to enlarge.
Click to enlarge.

According to the study, brands with strong innovation, or even perceived innovation, are more valuable than those that do not display this. However, SA lags behind the world average on perceived innovation, with the top 30 brands only slightly above all local brands in respect of innovation. The challenge of this year’s top 30 brands will be to deliver truly relevant innovation in ways that resonate with their audiences, says the report.

The study found that brands with strong brand equity are better able to withstand difficult economic conditions and recover more quickly than those that do not have it. Those with weaker brand equity are expected to continue to lag and be at risk.

Trust in a brand remains an imperative for growth, according to the study, with trusted brands growing nearly five times more than brands that are not well trusted, and nearly twice as much as those that evoke a medium level of trust. BrandZ found that local brands with the highest levels of trust include Dis-Chem, Clicks and Pick n Pay. Food brands such as Koo, Fatti’s & Moni’s, Liqui Fruit and All Gold, as well as online retailer takealot, scored higher on trust than many of the brands in the top 30.

Koo was awarded the title of SA’s Most Loved Brand by BrandZ, while Dischem got the prize for the Most Purposeful Brand. Other special prizes went to Nando’s for Best Communication, Woolworths for Best Experience, Capitec for Most Innovative Brand and FNB for the overall Healthiest Brand.

Most brands making the top 30 were financial, retail, insurance and hospital brands. The beer and fast food category were represented by just three brands: Castle, Nando’s and Hansa Pilsener, which collectively represented only 15% of the total value of top 30 brands. Many of SA’s iconic local brands failed to make the top 30 list, which the study credits with heavy cross-category competition and the failure of these brands to establish local dominance and differentiation.

The big take-out

Brands with strong brand equity are better able to withstand difficult economic conditions than those without, according to the latest BrandZ Most Valuable SA Brands study.