Brand valuation and strategy consultancy Brand Finance recently released a ranking of the most valuable brands in South Africa in 2018.<\/p>\n
As defined by the report, brand value is equal to a net economic benefit that a brand owner would achieve by licensing the brand. Brand strength is used to determine what proportion of a business\u2019 revenue is contributed by the brand.<\/p>\n
In calculating this value, Brand Finance uses the royalty relief approach, which it says “involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a \u2018brand value\u2019 as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.”<\/p>\n
In a recent presentation at law firm ENS Africa, Brand Finance explained that MTN was named as South Africa\u2019s most valuable brand –\u00a0 having grown in value by 8% over the past year to R44.2 billion.<\/p>\n
The reason for the growth is that MTN\u2019s customers are spending more on data services, a trend that is occurring throughout the world, it said.<\/p>\n
MTN\u2019s data revenue grew 34.2%, whereas its overall revenue grew 7.2%. This growth didn\u2019t come easy as MTN has invested heavily in improving data quality and capacity.<\/p>\n
MTN is also very much a global company, with a presence in 22 countries in Africa and the Middle East, it said.<\/p>\n
“MTN is South Africa\u2019s most valuable brand because of their industry leadership. They are increasingly recognised throughout Africa by their customers as providing high-quality service, because their brand image is deeply rooted on more than just marketing campaigns,” said Brand Finance CEO David Haig.<\/p>\n
Other interesting findings include:<\/p>\n
The top 10 most valuable brands in South Africa were:<\/p>\n
| #<\/th>\n | Brand<\/th>\n | 2018 value<\/th>\n | 2017 value<\/th>\n | Change<\/th>\n<\/tr>\n |
|---|---|---|---|---|
| 1<\/td>\n | MTN<\/td>\n | R44.2 billion<\/td>\n | R40.8 billion<\/td>\n | +8.0%<\/td>\n<\/tr>\n |
| 2<\/td>\n | Vodacom<\/td>\n | R27.5 billion<\/td>\n | R24.3 billion<\/td>\n | +13.0%<\/td>\n<\/tr>\n |
| 3<\/td>\n | First National Bank<\/td>\n | R19.4 billion<\/td>\n | R15.9 billion<\/td>\n | +22.0%<\/td>\n<\/tr>\n |
| 4<\/td>\n | Absa<\/td>\n | R18.9 billion<\/td>\n | R18.3 billion<\/td>\n | +3.0%<\/td>\n<\/tr>\n |
| 5<\/td>\n | Standard Bank<\/td>\n | R18.5 billion<\/td>\n | R20.8 billion<\/td>\n | -11.0%<\/td>\n<\/tr>\n |
| 6<\/td>\n | Woolworths SA<\/td>\n | R18.1 billion<\/td>\n | R18.4 billion<\/td>\n | -1.0%<\/td>\n<\/tr>\n |
| 7<\/td>\n | Sasol<\/td>\n | R15.7 billion<\/td>\n | R19.0 billion<\/td>\n | -17.0%<\/td>\n<\/tr>\n |
| 8<\/td>\n | Investec<\/td>\n | R14.9 billion<\/td>\n | R13.8 billion<\/td>\n | +8.0%<\/td>\n<\/tr>\n |
| 9<\/td>\n | Nedbank<\/td>\n | R14.8 billion<\/td>\n | R12.8 billion<\/td>\n | +16.0%<\/td>\n<\/tr>\n |
| 10<\/td>\n | Multichoice<\/td>\n | R14.3 billion<\/td>\n | R13.5 billion<\/td>\n | +6.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n The value of services<\/strong><\/p>\n One thing that is striking is the total dominance of what are sometimes referred to as ‘service trade marks’, and what this says about the South African economy, said\u00a0Gaelyn Scott, head of IP at ENS Africa.<\/p>\n She pointed out that the first ‘goods trade mark’ on the list is Castle, which comes in at number 11.<\/p>\n “The strength, or otherwise, of a country\u2019s economy can be measured by its brands not only do they generate money, they pay taxes, create jobs and act as ambassadors.”<\/p>\n “However the report also shows how\u00a0precarious brands can be,” said\u00a0Scott.<\/p>\n “Brands and reputational issues have never been more important as has been seen so clearly in South Africa over the last year. Whether it be the nefarious activities of the Gupta family and their acolytes which impacted such companies as Bell Pottinger, Eskom, McKinsey and KPMG, or the problems experienced by the likes of Steinhoff,” she said.<\/p>\n “South Africa under the new leadership of President Cyril Ramaphosa now has the opportunity to leave behind the last decade of little or no growth and move ahead. The world will not wait for South Africa. One way to turbo-charge the economy, as demonstrated by China, is by developing and investing in home grown brands and also either acquiring or buying into international brands.”<\/p>\n |