Valuation and strategy consultancy,Â Brand Finance, has released its âBrand Finance Global 500 2019â report. According to the results, Amazon has defended its title as the worldâs most valuable brand, while brands from China have climbed up the rankings as the countryâs total brand value breaks USD$1 trillion.
Brand Finance values the 500 most valuable brands across all sectors and countries. Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brandâs performance on intangible measures relative to its competitors.
The rise of Chinese brands
Chinese brand presence across the Brand Finance Global 500 increased to USD$1,307.4 billion, breaking the USD$1 trillion mark for the first time, with many brands making headway in the ranking.
Chinaâs most valuable brand, which also ranks as the worldâs 8th, is Beijing-headquartered banking giant ICBC (brand value up nearly 35% to USD$79.8 billion). As the worldâs largest lender by assets, ICBC has more than tripled its number of overseas outlets to more than 400 in the last 10 years.
Breaking into the top 10 this year is Chinaâs second-biggest bank by market cap, China Construction Bank (CCB). With a brand value of USD$69.7 billion (up 23% since last year) the companyâs success can be attributed to its innovative developments in seizing the digital banking revolution. In April 2018 CCB opened the doors to its first self-service bank branch, run by robots using facial recognition, artificial intelligence, and virtual reality.
Meanwhile, Chinese tech giant Baiduâs online video platform – – is the worldâs fastest-growing brand, according to the report. Entering the rankings for the first time at 483th, iQiyi grew its value 326% to USD$4.3 billion, with over 500 million monthly active users, as more consumers prefer on-demand streaming content.
At USD$50.7 billion, WeChat is a rising star, moving from 47th to 20th, having lifted its brand value 126% over the previous year. Its influence is significant since the brand has created a digital ecosystem for its 1 billion Chinese users who use the platform every day to instant message, read, shop, hire cabs, and more. WeChat is the jewel in the crown of Chinese tech giant Tencent, which ranks 21st, holding a brand value of USD$49.7 billion.
Further down the table, Chinese real estate brands Evergrande (up 26% to USD$20.4 billion), Country Garden (up 43% to USD$16.6 billion), and Vanke (up 54% to USD$11.0 billion) have each recorded a notable increase to their brand values. This growth serves as a nod to the support from Chinese policymakers to the real estate sector, stated in the report.
David Haigh, CEO of Brand Finance, said, âChinese brands are braced for the trade wars ahead and starting the year confidently, seeing notable rises in brand value across a variety of sectors: tech, banking, insurance, and real estate. It now rests upon the guardians of these Chinese brands to navigate the choppy waters of US tariffs and negotiate their way through the escalating tensions in the years to come.â
The Store of Everything
Amazon defended its title as the worldâs most valuable brand in the Brand Finance Global 500 ranking, growing nearly 25% to an impressive USD$187.9 billion, over USD$30 billion more than 2nd place Apple, according to the report.
Notoriously strong for service and ever-diversifying portfolio, last year, Amazon recorded its most successful Prime Day to date, with consumers purchasing more than 100 million products. This was shortly followed by the brand crossing the USD$1 trillion threshold on Wall Street for the first time in its history.
Haigh commented, âAs Amazon relentlessly extends into new sectors, its brand value is well-positioned for growth. However, the mixed public reception of the recently announced high-profile divorce of its founder and CEO Jeff Bezos poses a reputational challenge, and a potential change to shareholder structure puts the company’s stability at risk. If mishandled, the separation process could cost the brand well in excess of USD$10 billion, with the expectation that the range of loss could be between 5%-10% of Amazon’s current brand value.â
Tech Titans Dominate Top 10
The tech sector has taken six positions in the top 10 most valuable brands. In addition to Amazon in 1st, Apple (2nd, USD$153.6 billion) and Google (3rd, USD$142.8 billion) round out the top three positions.
Although punching among the brand heavyweights, Apple has recorded mixed performance in the Brand Finance Global 500 over the past few years, losing to Google in 2017 and subsequently to Amazon. As Apple struggles to grow in key emerging markets and shows little motivation to diversify its portfolio, it could be the opportune moment for Google to shift to 2nd place in 2020, according to the report.
One brand making an interesting comeback is Microsoft, up from 6th to 4th this year, with a 47% increase in brand value to USD$119.6 billion, its the fastest-growing brand among the top 10 most valuable. While it once may have seemed that Microsoft was out of the game, its determination to adapt is a great example of how a brand can use change to its advantage. The companyâs transformation to a cloud-centric business model has proven successful in the last year, with revenue increasing 17% in 2018.
Haigh said, âThere is a reason the saying âdo not put all your eggs in one basketâ has been around for centuries. The advice is clear: a business cannot concentrate all its efforts and resources in one area and expect to survive long-term. The brands that evolve and experiment in new sectors, like Amazon and Microsoft, are the ones which will continue to outperform competitors; while the brands that are slower to adapt or diversify, like Walmart and Apple, will miss a key opportunity to grow brand value.â