The collective value of India’s top 50 brands grew 34%, as per the BrandZ Most Valuable Indian Brands analysis report by WPP and Kantar Millward Brown. The study reveals that brand value was boosted by rising consumer confidence, the country’s return to rapid economic growth and consumers becoming increasingly brand aware.
Since its launch five years ago, the total value of the BrandZ Top 50 Indian brands grew 110% to US$ 146.1 billion. This compares to a rise of 76% for the BrandZ Top 50 Chinese brands and 60% for the BrandZ Global Top 50 over the same period.
HDFC Bank has retained its No. 1 spot for the fifth consecutive year with a rise of 21% to a brand value of US$ 21.7 billion. The bank has built a reputation for its sustainable livelihood initiative by introducing smaller loans worth as little as US$ 175 that can be accessed via its bank branches.
Trust is an important key driver of brand value, with its impact on corporate performance a key theme in this year’s BrandZ ranking. This is exemplified by HDFC Bank, which continued to build trust by clearly communicating the benefits of its products to consumers and delivering differentiated financial services offerings consistently and repeatedly.
The BrandZ Top 10 Most Valuable Indian Brands 2018
As a result of few changes made in the study this year, there are seven new entries in the top 15. Insurance brand LIC comes in at No. 2 (US$ 19.8 billion) thanks to the key role played by its pension plan business whilst Tata Consultancy Services ranked No. 3 (US$ 15.0 billion), having leveraged digital technologies to drive growth and business transformation. Other new high-ranking brands include e-commerce retailer Flipkart (No. 11, US$ 4.1 billion), e-comm payment wallet Paytm (No. 12, US$ 4.1 billion) and Zee TV (No. 15, US$ 3.8 billion).
“A booming economy and an increasingly digital world are re-shaping India’s brand landscape and creating new opportunities. Brands that get it right, regardless of whether they are established players or newcomers, are reaping the rewards. However, there is no room for complacency in this fast-paced environment where so many ambitious companies are ready to rise to the occasion,” says David Roth, CEO, EMEA and Asia, The Store WPP.
Rapidly evolving marketplace and new brands
The new 2018 ranking has grown from 50 to 75 brands to reflect the strength of India’s growing economy and a marketplace in which more local brands are emerging to present consumers with increased choice.
For the first time, the ranking also incorporates brands from key and growing sectors such as technology (IT services), technology (online); durables and home appliances, tobacco, and entertainment (TV stations). Privately owned brands, where financial information is publicly available, and unicorn brands based on their most recent valuations are also now included. The brand originated in India and its corporate parent is listed on a recognised stock exchange outside of India. In prior years, the corporate parent needed to be listed on an Indian stock exchange.
The brand is privately owned, but its complete financial statements are publicly available. In prior years only publicly traded companies were eligible. Indian unicorns have their most recent valuation publicly available. In prior years, unicorns were not ranked. All banking activities – both B2C and B2B – are now considered. In prior years, banks had to earn at least 25% of revenue from B2C activities.
Explaining changing trends in the marketplace, Preeti Reddy, CEO, Kantar Insights, South Asia, said, “As people become more affluent, new cohorts and segments of consumption are generated. Senior citizens are spending a lot more now, with many products and services being offered for them, for example Saregama’s Caravan. Another cohort is new-nesters, the young ones who are moving out of the home for work or studies. This family dispersion is also giving new opportunities. The third trend is that the gender roles are getting redefined and women are bringing a new set of consuming class. The divide between young and old, rich and poor, urban and rural or men and women is narrowing and that is almost entirely because of technology (read mobile phone). The consumers have understood the power of the ‘send’ button and they can hence, make or break the brand almost overnight.”
Consumers seek out trusted brands – old and new
Highly trusted brands in the 2018 ranking have a value that is 86% higher than those low in trust, and the opportunities for brands to compete on this parameter have risen as greater access to online information and social media led to increased consumer knowledge.
As such, a strong brand heritage is no longer essential for developing brand trust. New brands that proactively build and reinforce trust as an integral objective (rather than relying on it being a by-product of their main offering) can do well. For example, Flipkart gets 117 for trust in the BrandZ ranking (against a baseline of 100), having transformed e-commerce so that it is perceived as a reliable channel, while the recent investment from Warren Buffett’s Berkshire Hathaway into payment brand Paytm adds credibility to the relatively youthful brand, making it one of India’s most valuable start-up brands.
“However, in case of a crisis a heritage or legacy brand can revive trust from consumers more easily than a new brand,” said Vishikh Talwar, Managing Director at Kantar Millward Brown, South Asia.
Premiumisation driven by fiscal stability and increased online access
The “premiumisation” phenomenon has gained importance for Indian brands, given increased competition and the need to differentiate themselves. Higher quality premium brands have increased in appeal. As consumers in both urban and rural areas become increasingly well-informed, they are also now willing and have more money to spend on brands that demonstrate and deliver relevance.
As brands focus on purposeful innovation, the BrandZ premium index has reflected this change, with a rise from 111 to 117 over the past five years. With a 97% year-on-year increase in brand value, Tata jewellery brand Tanishq led the ranking’s Top Risers on the strength of strong demand for gold and diamonds and the brand’s ability to command a premium price.
Talwar said, “The premiumisation trend is equally a reflection of the continuous progression of the Indian society over the last few decades. In this journey, consumers with an unprecedented array of options will choose the brand they instinctively trust. Trust is not the sole prerogative of heritage brands; young brands can be equally trustworthy if they have a clear purpose and deliver consumer experiences that reinforce this.
Other findings highlighted in this year’s BrandZ Top 75 Most Valuable Indian Brands include:
There are 30 newcomers in the expanded ranking: These include Jio, Flipkart and Paytm, which have all seen growth in brand value, as well as Ola (No.21, US$ 2.7 billion) and travel agency MakeMyTrip (No. 68, US$ 0.8 billion).
Family dispersion is creating new brand opportunities: With young professionals moving to cities for work, there are openings for brands to offer new services. For example, video calls are hugely popular, and have been made feasible for many people through Jio reducing the cost of data. Paytm and the advent of digital banking allow instant money transfers from family members working in the city to their relatives in rural areas. E-commerce brands are riding the boom in gifting, particularly during national festivals.
India’s most valuable brands are outperforming the market: BrandZ’s Top 50 Portfolio has beaten India’s SENSEX stock market index. The stock portfolio of the India Top 50 increased 39.2% over five years, while the India’s SENSEX rose only 21.4%.
Automobile and insurance brands lead the growth chart: Four of the Top 10 Risers (brands with the greatest year-on-year value increase in relative terms) are in the automobiles and insurance categories. Auto brands TVS and Maruti Suzuki rose 71% and 56%, respectively, with this sector representative of the overall economic growth in India following several consecutive good harvests driving strong rural demand. Insurance brands ICICI Prudential (50%) and Bajaj Allianz (49%) led the way as the sector responds to increasing competition including a government-backed life insurance scheme.
Financial services (banking and insurance) is the most valuable category: There are eight bank brands in the ranking worth a total of US$ 50.4 billion, followed by insurance, where the five brands included are worth a total of US$ 25.9 billion. Together they make up 35% of the total ranking value.
The BrandZ Top 75 Most Valuable Indian Brands report and rankings, as well as other brand insights for key regions of the world and 17 markets, are available online here. The Indian report, rankings, charts, articles and more can also be found via the BrandZ app. The app, which contains the same features and functionality for all BrandZ regional reports, is free to download for Apple IOS and all Android devices from www.brandz.com/mobile or by searching for BrandZ in the respective iTunes or Google Play app stores.
How does the study help brands?
CVL Srinivas, Country Manager, India, WPP, said, “Brands are the most valuable asset that any company has and creating brand value leads to a huge amount of enterprise value. In this day and age, when most companies and businesses are under a lot of pressure, the jury is already out but most of us, who are working on the brand and communicating inside believe that there is no better time to look at brand building as a serious investment exercise because of the enterprise value.”
What do the clients (brands) get from this report?
He further added, “It helps keep them on top of trends. Though it is a report about brands, but behind brands are consumers. Every year we get very rich nuggets of information about consumer trends and consumer behaviour. This answers a few questions: How different categories are received by consumers? What kind of media works? What are the different factors driving brand success?”
Speaking more on the need of accountability, Srinivas said, “In a world where accountability is gaining importance. The CFOs who decide on procurement are getting increasingly empowered, taking a lot of investment decisions, given the pressures that companies are under. BrandZ is a kind of report that bridges the gap between a CMO and a CFO. It is the only study that puts a tangible value to a brand and it helps make the case internally for investment. Since it is a global study done in many markets, it comes as a benchmark for anyone who wants to set up goals and wants to look at improving brand value.”
WPP has been partnering with Kantar Millward for the report for last five years, since the launch of the report in India. What does the agency network gain out of this? Srinivas said, “It helps all of us at WPP to be on top of the new trends. We are forging a lot more collaboration amongst the WPP agencies and BrandZ comes about as strong connectors within WPP. It also helps us measure our own progress, performance and set goals for us. Most of the brand recall or brand value studies that are done in the market are purely basis consumer perception that links very heavily to salience, which links to advertising majorly. This is a very different methodology which has financial value playing a major role.”