FeaturesNews

Amazon Becomes World’s Most Valuable Brand

With little sign of a slowdown in growth, Amazon has become the world’s most valuable brand, according to the 2019 BrandZ Top 100 Most Valuable Global Brands ranking released today by WPP and Kantar at the New York Stock Exchange. Amazon’s smart acquisitions, that have led to new revenue streams, excellent customer service provision and its ability to stay ahead of its competitors by offering a diverse eco-system of products and services, have allowed Amazon to continuously accelerate its brand value growth.

Technology companies have led BrandZ’s Top 100 ever since its first global brand value ranking in 2006 when Microsoft took the top spot. Rising in brand value by an impressive 52% year-on-year to $315.5 billion, Amazon moves ahead of Apple (no.2, $309.5billion) and Google(no.3, $309.0billion) which both rose by a modest +3% and +2% respectively, to end the technology giants’12-year dominance.

In the Top 10, Facebook remained at no.6 while, for the first time, Alibaba overtook Tencent and became the most valuable Chinese brand, moving up two places to no.7 and growing +16% to $131.2 billion. Tencent dropped three places to no.8, declining by 27% to $130.9 billion year-on-year, in what BrandZ ascribes toa more volatile world; one in which brands must continually anticipate evolving consumer needs and expectations.

As other social media platforms face challenges in terms of trust and desirability, Instagram (no.44, $28.2billion), now with over 1 billion users worldwide, emerged as this year’s fastest riser climbing 47 places with a massive +95% growth in brand value. Lululemon, the yoga-inspired, athletic apparel company was the second fastest riser, stretching to +77% growth year-on-year to $6.92 billion.

Other top risers, such as Netflix (+65%, no. 34, $34.3billion), Amazon (+52%, $315.5 billion) and Uber (+51%, no.53, $24.2billion) reflect the rapidly changing, technology-driven world in which consumers are placing more value on richer brand experiences. David Roth, CEO of The Store WPP EMEA and Asia and Chairman of BrandZ, says: “The growth in value of this year’s top 100 brands to an all-time high proves the power of investing in brands to deliver superior shareholder value. Behind this headline growth figure lies the success coming from a new phenomenon of ecosystem brand building. We’re seeing a move from individual product and service brands to a new era of highly-disruptive ecosystems. Brands need to understand the value this type of model can create and should embrace its approach to be successful in the future.”

Rank 2019 Brand Category Brand value 2019 ($BN) Brand value change Rank 2018
1 Amazon Retail 315.505 52% 3
2 Apple Technology 309.527 3% 2
3 Google Technology 309.000 2% 1
4 Microsoft Technology 251.244 25% 4
5 Visa Payments 177.918 22% 7
6 Facebook Technology 158.968 -2% 6
7 Alibaba Retail 131.246 16% 9
8 Tencent Technology 130.862 -27% 5
9 McDonald’s Fast Food 130.368 3% 8
10 AT&T Telecom Providers 108.375 2% 10

Despite the economic uncertainty surrounding the US and China trade tariffs, almost a third of a trillion dollars ($328 billion) of value was added to the BrandZ Top 100 Global ranking over the last year, giving it a combined brand value of $4.7 trillion – roughly the combined GDP of Spain, Korea and Russia. Much of this value is derived from consumer technology brands appearing in the ranking which combined are now worth in excess of $1 trillion.

Examples include newcomers Xiaomi(no.74, $19.8 billion), a Chinese mobile handset brand that also uses the Internet of Things (IoT) to connect smart devices and is experiencing rapidly growing demand in countries such as Russia, India, and Malaysia. Another Chinese brand, Meituan (no.78, $18.8billion) is seen as a category-disrupting consumer technology platform offering everything from food delivery, room bookings and ride-hailing to bike rentals.

Meanwhile, Uber is leveraging the ecosystem model and expanding into food and other delivery services, while Haier (no.89, $16.3 billion), the world’s largest home appliances and IoT platform are committed to co-creating an open ecosystem brand in the IoT era with its customers and partners. Doreen Wang, Kantar’s Global Head of BrandZ, comments: “Amazon’s phenomenal brand value growth of almost $108 billion in the last year demonstrates how brands are now less anchored to individual categories and regions. The boundaries are blurring as technology fluency allow brands, such as Amazon, Google, and Alibaba, to offer a range of services across multiple consumer touchpoints. Using their consumer experience and expertise, these brands are crossing over into the business services sector, creating new opportunities for brand growth. Disruptive ecosystem models are flourishing in regions such as Asia, where consumers are more technology-enabled and where brands are integrating themselves into every aspect of people’s daily lives.”

Amol Ghate, CEO UAE, Insights Division, Kantar says, “The 7% growth in overall brand value of the BrandZ global 100 reaffirms our belief that brands continue to be at the heart of building strong businesses even in the most challenging times. Tech brands like Amazon, Apple & Google have shown the value of putting customers at the center of everything they do by continuing to lead the rankings. These brands have used technology to deeply understand their consumer’s needs and deploy this knowledge to create an ecosystem of interrelated and seamless services which make the consumer’s life easy. The magic formula still remains the same, create a meaningfully different brand and amplify it well. However, the ingredients to success have in many ways become more complex with the availability of greater amounts of data, manifold channels to speak to the consumer, and increasingly diverse competition coming from all sides as technology lowers barriers to entry or in many cases changes the playing field altogether.”

Key trends highlighted in this year’s BrandZ Global Top 100 study include:

  • Luxury is the fastest growing category (+29%) followed by Retail (+25%), fuelled by the shifting preferences to digital channels from GenY and GenZ consumers.
  • Technology, Finance and Retail categories dominate, accounting for more than two-thirds of the total value of brands.
  • Nine newcomers appear in the Top 100, predominantly driven by Chinese and US technology brands with disruptive business models includingDell Technologies, Xbox, Haier, Meituan and Xiaomi.
  • Asian brands increase their presence with 15 Chinese, three Indian and one Indonesian brands making the ranking among a total of 23 from the region, including LIC and Tata Consultancy Services.
  • A new generation of brands emerges – GenZ brands(created after 1996)are miles ahead in growth rate as they add more value to the ranking per year of existence – almost four times more than brands created in the millennial era of 1977 to 1995. A total of 23 GenZ brands appear in the Top 100 with an average age of 16 years compared to 18 millennial brands averaging 33 years.
  • Sustainable brands–Brand owners are demonstrating the importance of improving and reinforcing consumer perceptions that they are ‘responsible’ through social, environmental and corporate initiatives.
  • China and US trade wars affected the growth of the Top 100 ranking, which slowed to +7% over the last 12 months. Consumer confidencewas hit as the trade tariffs impacted several brand categories with Cars, Logistics and Banks suffering most.
Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close
Close