Q&A: What makes a brand valuable in SA today?
SA’s most valuable brands increased in value over the past year by 21% to $34.9 billion. How did they do this during a pandemic; and despite the disastrous SA economy?
In last month’s release of Kantar’s 30 Most Valuable South African Brands, it showed that the most valuable brands growth had surpassed that of the wider economy, increasing in value over the past year by 21% to $34.9 billion. How did they do this during a pandemic; and despite the disastrous SA economy?
These were the results, in a nutshell, of the Kantar BrandZ Top 30 Most Valuable South African Brands 2022:
- MTN leapt four places in South Africa’s brand ranking to occupy the No.1 spot for the first time with a brand value of $3.7bn. The telecom provider also claimed the accolade as this year’s fastest riser, growing 85% in brand value year-on-year. MTN’s rise in brand value has been assisted by a combination of overseas expansion and sound strategic positioning. It was followed by First National Bank (No.2, $3.5bn) and Vodacom (No.3, $3.1bn) as South Africa’s top three most valuable brands.
- 12 South African brands boasted above average growth (>21% rise in brand value). Rising nine positions, Investec (No.16, $700m) was the second fastest riser, followed by retail giant Checkers (No.23, $531m), part of the Shoprite Group that has focused heavily on accelerating its digital transformation.
- Dis-Chem (No.27, $410m), returned to the Top 30 after an absence of two years. Operating across multiple categories such as health, baby and beauty, the retail pharmacy is perceived by consumers as a well-trusted and purposeful brand that offers fair prices.
- Brutal Fruit (No.28, $396m) was this year’s newcomer to the ranking, growing its revenue significantly; and while extending its branding outside of its traditional core alcohol category and into cosmetics, following the launch of its You Belong
- Fun fact: This $6 billion rise in overall brand value now makes the Top 30 brands roughly equivalent in value to the entire GDP of Cameroon
The Kantar BrandZ Top 10 Most Valuable South African Brands 2022
|Rank 2022||Brand||Category||Brand Value 2022 ($M USD)|
|2||First National Bank||Banks||3,500|
|9||DStv||Media and Entertainment||1,325|
So, what are the fundamentals for the success of South Africa’s most valuable brands?
Commenting on the reasons behind the growth of South Africa’s most valuable brands, Stina Van Rooyen, Kantar BrandZ lead, South Africa, said, “2022 has been a banner year for South African brands, with sharp value growth and strategies that seem to be building several brand equity measures. Our top performing brands are focused on getting their four fundamentals for growth right, which are exposure, function, convenience and experience. Brand managers should continue more of the same: investing in brand equity, expanding to new categories and geographies, and helping young South Africans create a more equitable and sustainable society they desire. Despite a sharp reduction in advertising spend at the onset of the pandemic, South African brands made a strong return to the market. This has now put them on par with successful global brands.” Kantar also reported that it is not always about how much marketers spend on advertising, but the quality and efficiency with which they spend. Ensuring that you’re using the right channels and using messages that really connect with your customers can make your marketing budget go further. Van Rooyen added, “Our research shows that strong brands tend to be more resilient during downturns and return to growth more quickly when good times return. This may help explain the exuberant performance of the Kantar BrandZ Most Valuable South African Brands 2022, which have greatly outpaced the broader economy.”
How did the most valuable brands fair overall when compared with the economic reality of SA?
Ivan Moroke, CEO Kantar SA, insights division, commented, “South Africa’s most valuable brands have been leaning into their home country’s reputation for resilience and resourcefulness to meet the many health, social and environmental challenges they are confronting. Through technology and sustainability initiatives, as well as adding customer-centric services and expanding overseas operations, the strongest brands – led by MTN – have found avenues for significant growth as the country returns to steady financial recovery.” Reflecting South Africa’s broader economic resilience, the growth in the ranking’s overall brand value was deep and distributed throughout. Although the Top 30 ranking showed a slight decline of -3% in 2021, with only nine brands growing in value, this year the picture is very different. Only two brands show any decline at all, while 28 grew, and 12 grew in value by more than 20%, the Kantar research showed.
What were the brand categories that showed the most growth?
Banks, Telecom Providers and Retail dominated the ranking in both value and growth, with a 31%, 21% and 15% share of the overall brand value, respectively. Alcohol and Insurance declined slightly. There were also special awards for the brands meeting changing consumer needs and driving demand: Woolworths was awarded the 2022 Kantar BrandZ Sustainability Award; Clicks was awarded for both Experience (offering superior experience across all touchpoints), and Function (creating a range of well-designed products and services); Checkers was the top-performing brand for Convenience (ensuring products and services fit well into consumers’ everyday lives); and FNB was recognised for performing highly on Exposure (cutting through with advertising, featuring memorable icons and messages).
What sets the brands apart that are growing in value in SA?
The Kantar research found that the brands that are growing in South Africa tend to be highly dynamic, launching new products and services, expanding into adjacent categories and occasionally entering completely different ones. For example, telecom providers are offering payment services, insurers are opening banks, pharmacy retailers are selling their own medical insurance, and alcohol brands are launching fragrances. Kantar’s global research indicates that this is an excellent strategy for growth. On average, brands that operate in a higher number of categories grew 24.2% in the past year, while those that operated in a single category grew 13.8%. Diversified brands also have much more potential to grow their brand value, with 53% of them achieving above average growth, compared to only 28% of single category brands. South Africa’s top brands scored substantially higher when measured against perceived uniqueness. This difference results from brands working hard to meet the needs of a rapidly digitising populace and expanding their offerings to new categories and geographies.
What does the future hold for South African brands?
While globally, sustainability drives 3% of brand equity – in South Africa this number rises to 5%, with consumers more motivated by social issues than environmental ones. Brands must learn how to tap into this opportunity to drive additional growth. There’s a new generation of consumers emerging: 28% of South Africans are under the age of 15, with 53% of the population under 30. For marketers, connecting with this young demographic is essential to long-term growth. Imbued with a strong sense of social justice, young South Africans are disruptive and innovative at heart. Technology is a means of solving personal and societal problems, while entrepreneurship is the key to a better life.
Main image credit: Pixabay.com.
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