Tech groups lead game of snakes and ladders

Rise and fall: Digital ventures have strengthened their grip on the top 100 rankings

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Here are some of the trends that emerge from this year’s BrandZ rankings (see below) compiled by Millward Brown, the research group:

Star risers

Amazon, Starbucks and Facebook have seen their brand values shoot up in 2016 compared with 2015. Amazon’s 59 per cent rise in value to $99bn and seventh place ranking, is partly due to its ability to create demand and not just satisfy it, according to Elspeth Cheung, head of BrandZ valuation at Millward Brown. She says Amazon’s one-hour delivery service has put pressure on other retailers to speed up delivery times while the online retailer’s move into logistics poses a threat to courier services UPS, FedEx and DHL.

Facebook, up 44 per cent, has added new features including disaster alert, which lets users quickly inform family and friends that they are safe. Such innovations add to the media group’s importance as an integral medium for worldwide connection and enhance its value to advertisers, Ms Cheung says.

Starbucks, up 49 per cent to 21 in the ranking, has evolved from a café to a place where people can hang out all day since it now sells breakfast, lunch and evening meals, accompanied by alcohol in some places.

Sectors: what’s in

The fastest-rising sector is apparel, driven by Nike in sportswear as people pay more attention to health and fitness, and Zara, whose fast fashion is becoming increasingly popular in China.

Technology and telecoms are on the up as are some fast food companies, including Starbucks, which BrandZ puts in this category, and McDonald's, whose brand value is risen by nine per cent even though its ranking is unchanged.

Sectors: out of favour

The biggest falls in brand values include oil and gas companies, still suffering from low commodity prices, and banks, which face growing competition from rival payment systems such as PayPal — whose brand value increased by 35 per cent.

Kindling your interest: Amazon, Starbucks, Ikea and Nike have all climbed the table

Regional

There are 15 Chinese brands in the top 100, one more than last year and a sharp rise on a decade ago, when China Mobile was the only Chinese brand.

Their inclusion has come at the expense mainly of European companies, signalling the shift in economic power towards the east. There is only one Indian brand in the top 100 ranking — HDFC Bank. Russian, Mexican and Brazilian brands have fallen out of the ranking in the past few years — a sober reflection of the changing fortunes of these emerging markets.

The US remains home to the biggest brands and the value of its top 10 increased by 10 per cent to $1.3tn in 2016. The top 10 UK brands, headed by Vodafone, lost 8 per cent of their value. Those in continental Europe — led by Germany’s SAP software group — rose 5 per cent. Finally, the $360bn value of Asia’s top 10 brands, headed by Tencent, China Mobile and Alibaba, was only 10 per cent lower than the value of the top 10 in continental Europe and the UK combined.

Local champions

Consumers in many parts of the world have a preference for buying local which has helped boost the value of local brands.

These brands are close to their domestic markets, helping them to gain market share at the expense of global brands, and they are also winning share in new regions, according to BrandZ.

Huawei, the Chinese technology group, has taken market share from both Apple and Samsung, according to BrandZ.

Its brand value has increased by 22 per cent to $19bn and it has climbed 20 places up the ranking to number 50.

Brands vs the market

The biggest brands outperform financial markets, according to BrandZ, which says this illustrates their financial power and value to shareholders.

Since April 2007, the value of the top 100 brands has increased by 106 per cent. That compares with a 61 per cent rise in the S&P 500 and growth of 21 per cent in the MSCI world index over the same period.

Top 100 Global Brands © FT
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