Amazon is the world’s most valuable brand, ahead of Apple and Google, according to the latest Brand Finance Global 500 report.
The e-commerce giant’s brand value increased by 42% year on year to a whopping $150,8-billion.
Since the brand’s humble beginnings as an online bookstore, Amazon has become the world’s largest internet business by both market capitalisation and revenue. It is no longer just an online retailer, but also a provider of cloud infrastructure and a producer of electronics.
Now it is moving beyond the digital space, as last year’s takeover of Whole Foods for $13,7-billion gave the brand a foothold in the realm of bricks and mortar. Amazon is also present in shipping, music and video streaming, alongside industry speculation on an impending bank acquisition in 2018.
David Haigh, CEO of Brand Finance, comments: “Jeff Bezos once said that ‘brands are more important online than they are in the physical world’. He has proved himself right by choosing the name Amazon, known as the largest, most powerful river in the world, as 23 years later the Amazon brand carries all before it as an unstoppable force.
“The strength and value of the Amazon brand gives it stakeholder permission to extend relentlessly into new sectors and geographies. All evidence suggests that the amazing Amazon brand is going to continue growing indefinitely and exponentially.”
Africa as a continent has not had any brands represented in the Brand Finance Global 500 2018 report. However, a drastic shift towards financial sustainability is currently underway. It is generally accepted that strong brands mean potential for growth and job creation.
There are now several credible contenders emerging in the region which are driving the African economies upwards. South African brands, such as Sasol, Standard Bank, and MTN, could well be strong enough to enter the rankings in the coming years.
Jeremy Sampson, MD of Brand Finance Africa, comments: “It is pretty clear that investors are scrambling about for the next big emerging market story akin to Brazil in 2016 and Mexico in 2017. We are proud to note that South Africa is top of the list of those potential market candidates.”
Although Apple defended its second place in the ranking, with brand value rebounding to $146,3-billion after the 27% decline last year, its future looks bleak.
Apple has failed to diversify and grown over-dependent on sales of its flagship iPhones, responsible for two thirds of revenue. Poor Q4 2017 sales of iPhone X at only 29-million handsets fell short of expectations, and the model is predicted to be discontinued later this year.
With the advent of emerging world brands like Huawei, Apple’s increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth.
Google has dropped from first to third position, recording a relatively slow brand value growth of 10% to $120,9-billion. Google’s online ads generated more traffic than expected as aggregated paid clicks rose by 47% in Q3 2017, boosting revenues.
However, to compete with the world’s most valuable brands, presenting a solid performance is not always enough. Google is a champion in internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand.
Google’s investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon’s new ventures. Nevertheless, the acquisition of 2,000 HTC smartphone staffers for $1,1-billion indicates a shift to a more expansive approach.
For the first time since the inception of the Brand Finance Global 500 study, technology brands claim all top five places in the league table. Samsung (fourth at $92,3-billion) and Facebook (fifth at $89,7-billion) both recorded impressive year-on-year brand value growth of 39% and 45% respectively, overtaking AT&T (sixth at $82,4-billion).
The dominance of digital is set to grow even more in the coming years as other brands make their way up the Global 500. Google-owned YouTube more than doubled its brand value to $25,9-billion, jumping 70 places to 42nd.
Chinese technology brands, taking advantage of captive market conditions, can also boast high brand value growth, with Alibaba (12th), Tencent (21st), WeChat (49th), Baidu (57th), JD (65th), and NetEase (121st), going up by an average of 67% year on year.
The growth of Chinese brands extends beyond the technology sector as the country continues to narrow the value gap with the US at an impressive rate.
Since 2008, China’s share of global brand value has increased from 3% to 15%, growing 888% to $911,5-billion in 2018. It comes as no surprise that State Grid, a state-owned utilities company from China, is the largest new entrant to the Brand Finance Global 500 this year, claiming 19th place with a brand value of $40,9-billion. In addition, the fastest-growing brand of 2018 also comes from China. The spirit industry champion Wuliangye grew a striking 161% to $14,6-billion year on year, rising 184 ranks to 100th.
With a brand strength index (BSI) score of 92.3, up from 91.3 last year, Disney is the world’s strongest brand and one of the most interesting to watch in the coming years. In light of its recent purchase of a majority stake in 21st Century Fox, Disney can further develop its brand to deliver for more consumers worldwide. The addition of companies like: Star India — which reaches hundreds of millions of viewers on the subcontinent, Sky — with presence across the UK, Ireland, Germany, Austria, and Italy, as well as a 60% stake in Hulu — arguably one of Netflix’s biggest competitors, means that Disney can now leverage its greater international exposure to establish its brand as much more than a children’s favourite.