The rankings report that in difficult global and local conditions, FNB outperformed its rivals with a brand value of $2.8-billion USD in the third BrandZ™ ranking of South African born most valuable brands. Standard Bank took the second spot with a brand value of $2.75-billion USD, with beer brand Castle at third with $2.72-billion USD.

Flavoured beer brand Flying Fish is the highest new entry in the ranking 28th with a brand value of $333-million USD. Insurance group Hollard, with a brand value of $285-million USD, is the other newcomer, making it into the ranking 30th.

The cumulative value of the top 30 brands in 2020 is $29.7-billion USD, down 20% from 2019, according to the report. As in other regions, South African brands have been heavily impacted by the coronavirus pandemic. This global crisis came on the back of the ongoing macroeconomic challenges faced by the country as its government debt was downgraded to junk status.

The rankings say that these external factors have compounded the pre-pandemic tendency for many major South African brands to grow through business expansion rather than innovation to enhance the brand experience.

This has led to low brand equity, especially in comparison with leading brands in other countries where the initiative undertakes valuation rankings. As a result, they are vulnerable in the currently difficult climate, which has highlighted that brand building will be key to recovery.

BrandZ™ analysis says that it reinforces this; the world's largest brand equity platform shows that over 16 years, strong brands have continued to recover faster following economic shocks.

Globally, the BrandZ™ strong brands portfolio has consistently outperformed the market, including the S&P 500 and MSCI World Index. These findings validate the vital role of marketing and brand-building investment to support business recovery, says the rankings.

Brands bucking the trend in South Africa include retail and pharmacy chain Clicks (up five places to 24th), which is the best performer in the 2020 ranking having increased its value by 10% to $407-million USD.

It expanded both its overall retail network and the number of in-store outlets to increase accessibility and convenience for consumers, which also helped to drive a 31.2% rise in pharmacy sales in the weeks prior to lockdown, according to the rankings.

BrandZ™ analysis also shows that consumer expectations of brands to act more responsibly have tripled in the last 10 years and that 9% of a brand's equity (a key element in the calculation of brand value) is now driven by corporate reputation.

Brands with a clearly defined purpose to benefit communities and society are becoming increasingly important to consumers as a result of the coronavirus pandemic; 90% of South Africans believe that brands should talk about how they can be helpful in the new everyday life, says the rankings.

The report further indicates that meeting this consumer need has the potential to drive long-term growth for brands in South Africa; brands in the Global Top 100 Most Valuable Brands ranking with a high purpose score grew 175% in value between 2006 and 2018, compared to 70% for those with a low score.

In South Africa, premium retailer Woolworths (ninth with $959-million USD) was identified as the country's most responsible brand. Its 'good business journey', in which it commits to caring for the environment, people and communities with activities such as responsible and sustainable sourcing initiatives, has contributed to Woolworths being recognised in the Dow Jones Sustainability Index and the FTSE4Good Emerging Index Series.

Capitec Bank (12th, up from 17th in 2019 at $840-million USD) performed best against the 'purpose' measure in the ranking, indexing 128 (against an average of 100). The brand has focused on meeting consumers' needs with initiatives such as using WhatsApp for easy communication, Sunday opening and the 'human-centric' financial advice available on its website.

Supermarket chain Pick n Pay, which rose three places in the ranking to 17th with a brand value of $672-million USD, is another company that has actively demonstrated social responsibility, uniting with other partners on the Feed the Nation campaign to provide meals for vulnerable people, says the rankings.

During the pandemic, it partnered with an on-demand beverage delivery service to provide grocery essentials via a contactless system.

Charles Foster, CEO of Africa and Middle East Insights Division at Kantar, says, "On a macro level, this has been a difficult year for South Africa, with a global pandemic being only one of the headwinds brands have had to contend with."

"But in a country with a history of resilience and an ability to look to the future, we are seeing great examples of brands, driven by consumer expectations, redefining themselves, in recognition that the current climate calls for them to clearly determine their contribution to society," adds Foster.

"This investment in brand building is critical to address the equity deficit that many brands currently face and it will pay dividends in a world where brands are increasingly expected to deliver social benefits that go above and beyond product functionality," Foster says.

David Roth, CEO of The Store WPP, EMEA and Asia and chairperson of BrandZ™, says, "The importance of being a strong brand has been tested to the limit by the global pandemic and proved an imperative company asset."

"As brands around the world shoulder their responsibility to continue to meet consumer need, however much that has changed, it is a timely reminder of how and why to invest in brand building for the short and long-term," adds Roth.

"With South Africa's additional challenges thrown into the mix, South African brands that do this will be in the best position for recovery and will also be our headline stars in the next few years," Roth says.

Other key findings of the BrandZ™ Top 30 Most Valuable South African Brands 2020 include:

  • Fair pricing: Clicks is also seen by consumers to price fairly, indexing 131 on this scale (where 100 is the average). This is increasingly critical for most South Africans, who have become more price and promotion conscious as the direct impact of economic uncertainty on household income grows. Seventy-six percent of consumers now say they pay more attention to prices and 42% will visit multiple stores to ensure they get the best value.
  • Difference pays: In a market where price and value are very important, difference is a critical component that enables brands to charge a premium. Difference provides consumers with a reason to choose a given brand, justifies the price asked and reinforces the buying decision post-purchase. Woolworths, which indexes 207 for 'difference', takes the top spot on this measure and also scores highest for 'worth more than it costs' where it scores 130. Woolworths was also first and eighth respectively for retail and fashion in the recent global Kantar CX+ retail study that evaluates exceptional customer experience.
  • BrandZ 2020 Special Awards: Brands awarded for high-performing scores against the other critical factors that underpin their brand value include: Capitec Bank for Brand Purpose, Nando's for Communications, Woolworths for Brand Experience, Clicks for Brand Love and Woolworths for Responsibility.
  • Financial services dominate: Banks and Insurance companies take nearly half the top 30, accounting for 42.9% of the total value of the top 30, with the banks contributing 30.3% and the insurance giants 12.6%. Telecom Providers at 16.9% and beer brands at 12.9% sit between the two financial sectors. 
The BrandZ™ Top 30 Most Valuable South African Brands 2020 report can be viewed here

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