Telco company Indosat Ooredoo has entered the top 10 for Indonesia’s most valuable brand this year, jumping from 15th last year, with an impressive 32% brand value increase, according to Brand Finance's report on the top 100 most valuable and strongest Indonesian brands. The telco company has a current brand value of US$715 million and is the only brand in the top 10 to record a brand value growth. Ranking first is Telkom Indonesia, which has managed to retain its spot for the 5th consecutive year, despite recording a 19% loss, with a current brand value of US$3.9 billion.
The banking industry continues to dominate the top 10, occupying four spots with a combined brand value of US$9.3 billion. BRI is the most valuable banking brand, ranking second with a brand value of US$3.1 billion. The telecommunications and tobacco industries follow closely behind as the second and third most valuable sectors respectively.
Samir Dixit, managing director of Brand Finance APAC, said that the 18 banking brands in the top 100 account for 30% of the total brand value in the ranking. "As Indonesia further develops, we expect consolidation across the sector, so it will be interesting to see which brands survive in the coming years. Banks who can digitalise and remain relevant will be the ones that will win," he added.
The top 10 valuable brands account for 63% of the total brand value, while the bottom 50 brands contribute only 9% of the total brand value, highlighting the significant effort required from smaller brands should they wish to contest the status quo In Indonesia.
In addition to brand value, Brand Finance also determines brand strength by analysing three core pillars: inputs, which are activities supporting the future strength of the brand; equity, which are real current perceptions sourced from its market research and other data partners; and output, which are brand-related performance measures such as market share. Each brand is assigned a BSI score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding brand rating up to AAA+ in a format similar to a credit rating. Alongside revenue forecasts, brand strength is also seen by Brand Finance as a crucial driver of brand value.
BCA has retained its position as Indonesia’s strongest brand, with a Brand Strength Index (BSI) score of 91.6 out of 100 and a corresponding elite AAA+ brand strength rating. Meanwhile, Telkom Indonesia ranked in second with BSI score of 87.1, followed by Bank Mandiri in third with a BSI score of 86.9.
Meanwhile, Silver Queen continues to be the brand with the highest intangible value with a brand value to enterprise value ratio of 58%, followed by MPM at 51%. According to Brand Finance, this highlights the role of brands in business success, especially in the food sector.
Dixit added that the ranking was very "top heavy" this year, and it would like to see a more diverse mix at the top and more significant brand value increases at the bottom. "To do so, brands must focus on building brand strength, rather than being sales and offers driven. Such tactics might help in the short term but can ultimately undermine the long-term value of brands," he said.
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