MTN is the most valuable brand in SA for 2019 - report

MTN is the most valuable brand in SA for 2019 - report

DURBAN - Brands that feature in the Brand Finance South Africa 50 report are defying the South African economy and recording healthy brand value growth, according to the latest report.

These brands are outpacing the country’s GDP, with the top 50 recording a 16.1 percent brand value growth rate YoY and the top 10 recording an impressive 19.8 percent growth rate YoY.

Jeremy Sampson, Managing Director, Brand Finance Africa said, "We can celebrate that the top South African brands are consistently recording high brand value growth rates, in stark contrast to the nation’s sick economy, which is currently falling short of other countries’ growth across the continent". 

He added, "Sectors to highlight though are oil & gas and retail, which have both seen various brands recording healthy brand value growth". 

However, tech is a sector that is greatly underrepresented. South Africa needs to develop brands within this sector if it wants to close the gap with leading economies.

According to Sampson, he process of data collection for took four to five months. 

Telcos lead the way

MTN and Vodacom, claiming first and second position respectively. MTN's brand value increased by 15 percent to R50.3 billion. The company has grown its subscriber level steadily over the last year and boosted revenue.

Vodacom’s brand value increased by 21 percent to R33.3 billion, despite the brand recording revenue losses in its South African business. The strong results from Vodacom’s international operations and the benefits reaped from the 2017 Safaricom acquisition.

The MTN-Vodacom duopoly is continuously grappling for greater market share across the country, leaving smaller brands struggling to compete.

Banks cash in as most valuable sector

The banking sector is the most valuable sector in the country with First National Bank, ABSA and Standard Bank completing the top five.

FNB has sustained strong brand value growth after it broke into the top 3 last year, with its brand value increasing to a healthy 32 percent to R25.5 billion. The bank’s retail division has expanded its customer base, extended its credit line to top clients and recorded high levels of transactions through its app.

Following Barclays’ sale of its final stake in ABSA in 2017, it has begun its return to the global banking marketplace. ASBA, up 25 percent to R23.5 billion, has opened offices in the US and UK in a bid to support growth on the continent, as more European businesses are looking towards Africa for investment amid Brexit uncertainty.

Beer brands bubble up

Castle Lager, has jumped into the top 10 for the first time, its brand value increased by 19 percent to R16.6 billion. Castle is a much-loved drink at home in South Africa and it is sold in over 40 counties worldwide. The brand continues to benefit from its multiple sports sponsorship partnerships and from successful marketing drives.

Three other beer brands have entered the ranking for the first time including Carling Black Label, Hansa Pilsner and Soweto Gold Superior. The latter is a home-grown brand acquired by Heineken.

Healthcare sector struggling

Healthcare brands have suffered with MediClinic going down 50 percent to R5.8 billion while Netcare is down 40 percent to R3.2 billion and Life Healthcare decreasing by 17 percent to R1.9 billion. These three hospital group brands have a combined market share of 83 percent of the national private facilities market.

Ones to watch: Engen, Clicks & Discovery

Engen, is the fastest-growing brand in South Africa, recording an impressive 67 percent rise in brand value to R6.7 billion. In 2018, Engen built 15 new service stations across the country and partnered with doughnut giant Krispy Kreme to launch its new forecourts

Clicks also boasts a significant rise in brand value, increasing by 59 percent to R6.1 billion while Discovery is also up by 58 percent to R13.1 billion. 

Brand Finance also evaluates the relative strength of brands, based on a variety of factors including marketing investment, familiarity. Alongside revenue forecasts, brand strength is a crucial driver of brand value. 

According to these criteria, Discovery is the world’s second strongest insurance brand, behind China’s Ping An, with a Brand Strength Index (BSI) score of 86.0 out of 100 and a corresponding AAA brand strength rating and the 5th strongest in the nation.

Capitec is South Africa's strongest

Capitec, up by 15 percent to R7.8 billion, defends its position as South Africa’s strongest brand with a BSI score of 88.7 out of 100 and a corresponding AAA brand strength rating.

Since the bank’s inception, Capitec has disrupted the country’s financial services sector and traditional banks, through removing barriers to entry for everyday customers. This approach has led to the brand boasting a vast customer base, with 44 percent of South Africans banking with them. 

"The purpose of the South Africa 50 2019 report is to showcase how brands across all sectors in the country compare against each other in terms of brand value and brand strength," concluded Sampson. 

Source: Brand Finance