Tech and luxury brands show their strength in Global 500
One is an Italian heritage brand with strong global recognition, a limited consumer base and a small number of brand extensions. The other is an American digital giant with strong market penetration, a huge consumer base and a variety of brand extensions. Together, Ferrari and Amazon take the top spots in Brand Finance’s Global 500 report, named world’s strongest brand and world’s most valuable brand, respectively.
Brand Finance, the brand valuation and strategy consultancy, announced its findings at the World Economic Forum this week.
The 10 most valuable brands list reads like a who’s who of digital giants with all the usual suspects taking up three spots on the list. Unexpectedly, two Chinese banks – ICBC and China Construction Bank – and US telecom brand Verizon make up the three non-tech companies in the top 10. Ten years ago, Amazon’s crown was firmly in the hands of retailer Walmart. It’s a classic case of the value of tech. Walmart, still growing, is mired in costs that Amazon, a similar retailer only with minimal high street presence doesn’t have.
“There is a reason the saying ‘do not put all your eggs in one basket’ 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 who 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,” David Haigh, CEO of Brand Finance, says.
Chinese brands across the Global 500 are making waves with increases in value across the board. But, the global trade outlook for Chinese homegrown companies is uncertain as looming tariffs issues, trade negotiations and market competition may stem their growth overseas.
In determining the world’s strongest brand, Brand Finance looked at investment, stakeholder equity and business performance. Ferrari stood out among all of the Global 500 for its excellence in almost every metric. It’s joined in the top 10 by Russia’s Sperbank, Deloitte, WeChat and McDonalds with Rolex being the only other luxury entrant.
Ferrari has had particular success largely because of its consistent brand positioning, global appeal and careful brand extensions. Its new commitment to hybrid and electric vehicles, however, has also seen its brand value improve. Haigh says, “As the world’s foremost luxury carmaker, Ferrari has an unparalleled level of brand recognition, upholding excellence for design and innovation. The prancing horse logo is a perfect symbol of the brand’s strength and vitality as it plans new models and reaches outside the auto industry.”
Porsche proved popular this year as well, jumping from 70th place in 2018 to 47th in 2019 based on a 54% growth in brand value. Costco also saw development, leaping 26 places from 124 to 98 and showing a 40% growth rate. Brands like Chanel, Netflix, KFC, Costco and China’s Vanke and Hikvision all showed incredible growth year-on-year. But others, like JD Sport, broadcaster ABC, Western Digital, Canada’s Bell and Australia’s ANZ bank all suffer large decreases in brand value.
The Big Four professionals services brands also make strong showings in the Global 500, with only KPMG suffering year-on-year due to controversies throughout 2018.