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Amazon most valuable brand, Apple and Google facing gray days

Staff Writer | February 1, 2018
Amazon is the world’s most valuable brand, ahead of Apple and Google, according to the latest Brand Finance Global 500 report.
Amazon
Brand value   The largest internet business
The e-commerce giant’s brand value increased by 42% year on year to a whopping $150.8 billion.

Apple has failed to diversify and poor Q4 2017 sales of iPhone X with only 29 million handsets sold
Since the brand’s humble beginnings as an online bookstore, Amazon has become the world’s largest internet business by both market capitalisation and revenue.

It is no longer just an online retailer, but also a provider of cloud infrastructure and a producer of electronics.

Now, it is moving beyond the digital space, as last year’s takeover of Whole Foods for $13.7 billion gave the brand a foothold in the realm of bricks and mortar.

Amazon is also present in shipping, music and video streaming, alongside industry speculation on an impending bank acquisition in 2018.

Although Apple defended 2nd place in the ranking as its value rebounded this year to $146.3 billion from the 27%-decline in 2017, the brand’s future looks bleak.

Apple has failed to diversify and grown over dependent on the sales of its flagship iPhones, responsible for two thirds of its revenue. Case in point, poor Q4 2017 sales of iPhone X at only 29 million handsets fell short of expectations, and the model is predicted to be discontinued later this year.

Google has dropped from first to third position, recording a relatively slow brand value growth
High price discourages many less dogmatic customers prepared to settle for a similar but less expensive model from Apple’s competitors.

With the advent of emerging world brands like Huawei, Apple’s increasing focus on what are effectively luxury products may cost the brand losing a fair share of the global mass market and forfeiting potential growth of brand value in the future.

The dominance of digital is set to grow even more in the coming years
Google has dropped from first to third position, recording a relatively slow brand value growth of 10% to $120.9 billion. Google’s online ads generated more traffic than expected as aggregated paid clicks rose by 47% in the third quarter of 2017, boosting the brand’s revenues.

However, to compete with the world’s most valuable brands, doing well or even very well is clearly not enough.

Google is a champion when it comes to services related to internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand.

Google’s investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon’s new ventures. Nevertheless, last year’s acquisition of a large part of HTC’s smartphone team for $1.1 billion can indicate the beginning of a more expansive approach to growth.

The growth of Chinese brands continues to narrow the value gap with the United States at an impressive rate
For the first time since the inception of the Brand Finance Global 500 study, technology and internet brands claim all top 5 places in the league table. Samsung (4th, $92.3 billion) and Facebook (5th, $89.7 billion) both recorded significant year on year brand value growth of 39% and 45% respectively, overtaking AT&T (6th, $82.4 billion).

Change at the top is reflective of a wider global trend as the technology and internet sector now accounts for more than twice as much brand value as telecommunications.

The dominance of digital is set to grow even more in the coming years as other brands make their way up the Global 500. Google-owned YouTube more than doubled its brand value, jumping 70 spots up the league table and placing 42nd, is now valued at $25.9 billion.

Chinese internet brands, taking advantage of captive market conditions, can also boast high brand value growth, with Alibaba (12th), Tencent (21st), WeChat (49th), Baidu (57th), JD (65th), and NetEase (121st) going up by an average of 67% year on year.

The growth of Chinese brands extends beyond the technology sector as the country continues to narrow the value gap with the United States at an impressive rate. Since 2008, China’s share of global brand value has increased from 3% to 15%, growing 888% to $US 911.5 billion in 2018.

It comes as no surprise that State Grid, a state-owned utilities company from China, is the largest new entrant to the Brand Finance Global 500 this year, claiming 19th place with a brand value of $40.9 billion.

In addition, the fastest-growing brand of 2018 also comes from China. The spirit industry champion Wuliangye grew a striking 161% to $14.6 billion year on year, rising 184 ranks to 100th.


 

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