Alibaba outranks Tencent to become most valuable Asian brand, finds BrandZ

Alibaba has overtaken Tencent to become the most valuable Asian brand this year. Ranked seventh and eighth respectively, both companies are the only two Asian brands that made it to the BrandZ’s Top 10 Most Valuable Global Brands this year.

Alibaba’s jumped two spots for its ranking this year and witnessed a 16% increase in brand value to US$131.2 billion. Meanwhile, Tencent’s ranking  dropped by three spots along with its brand value, which saw a 27% decrease to US$130.9 billion year-on-year (yoy), in what BrandZ describes to be a more “volatile world”. BrandZ added that the current  world is one in which brands must continually anticipate evolving  consumer needs and expectations.

Coming out on top as the world’s most valuable brand this year was  Amazon, jumping two spots in its ranking and witnessing a 52% change in brand value to US$315.5 billion. It outdid Google, which slipped two spots to third place. Nonetheless,  Google still saw a 2% increase in brand value to US$309 billion. According to BrandZ, technology companies have led BrandZ’s Top 100 ever  since its first global brand value ranking in 2006, when Microsoft took the top spot.

Amazon has been able to continuously accelerate its brand value growth due to its “smart acquisitions”, BrandZ said. Those acquisitions have led to revenue streams, excellent customer service provision and its ability to stay ahead of its competitors by offering a diverse ecosystem of products and services. Also making the top five ranking were Apple (#2), Microsoft (#4) and Visa (#5).

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Instagram was identified as the fastest riser, climbing 47 places to 44 with a 95% growth in brand value to US$28.2 billion. Yoga-inspired athletic apparel company Lululemon was the second fastest riser, stretching to 77% yoy brand growth to US$6.92 billion. Other top risers include Netflix (#34) and Uber (#53), reflecting the rapidly changing technology-driven world in which consumers are placing more value on richer brand experiences, BrandZ said.

Despite only having two Asian brands in the top 10, there was an increase in the number of Asian brands making the top 23, with 15 Chinese, three Indian and one Indonesian brand.

Doreen Wang, Kantar’s global head of BrandZ, said that Amazon’s “phenomenal” brand value growth of almost US$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 touch-points.

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,” Wang said.

Consumer tech brands increasingly growing in brand value

Despite the economic uncertainty surrounding the US and China trade tariffs, almost a third of a trillion dollars (US$328 billion) of value was added to the BrandZ Top 100 Global ranking over the last year, giving it a combined brand value of US$4.7 trillion – roughly the combined GDP of Spain, Korea and Russia.

According to BrandZ, much of this value is derived from consumer technology brands appearing in the ranking, which have a combined worth in excess of US$1 trillion. Examples include newcomers Xiaomi (#74, US$19.8 billion) which is experiencing rapidly growing demand in Malaysia, India and Russia; as well as Meituan (#78, US$18.8 billion), a consumer tech platform offering food delivery, room bookings, ride hailing and bike rentals.

Meanwhile, Uber is leveraging the ecosystem model and expanding into food and other delivery services, while Haier (#89, US$16.3 billion), the world’s largest home appliances and IoT platform is committed to co-creating an open ecosystem brand in the IoT era with its customers and partners.

Nonetheless, BrandZ said that the trade ware between US and China affected the growth of the Top 100 ranking, which slowed to +7% over the last 12 months. Consumer confidence also took a hit as the trade tariffs impacted several brand categories with cars, logistics and banks suffering most.

A new generation of brands emerge

Brands which are created after 1996, also known as Gen Z brands, are “miles ahead” in brand value growth rate as they add more value to the ranking per year of existence, BrandZ said. There were almost four times more 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.

Meanwhile, luxury has been ranked the fastest growing category (+29%) followed by retail (+25%), fuelled by the shifting preferences to digital channels from Gen Y and Gen Z consumers.

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,” he said.

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(Read also: Alibaba’s the world’s most valuable non-US retail brand, study finds)

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