Info-tech

Amazon is world’s most valuable global brand, says BrandZ report

Amrita Nair-Ghaswalla Mumbai | Updated on May 04, 2020 Published on May 04, 2020

Strong brands help their businesses survive turbulent times, is key takeaway

The strong get stronger, even amid the Covid-19 chaos. As retailers face supply and demand challenges that require innovation and agile responses, Amazon has once again ranked as the world’s most valuable global brand, followed by Alibaba and McDonald’s.

Managing demand and reducing its speed of delivery to prioritise key products, Amazon has grown 32 per cent to $415.9 billion to remain the world’s most valuable retail brand, according to the recently released BrandZ Top 75 Most Valuable Global Retail Brands ranking.

The third annual BrandZ ranking was unveiled by WPP and Kantar. The report provides an indication of brands that are most likely to prevail in a post-Coronavirus market, and drives home the retail sector’s pivotal role in the global economy.

It reveals that the value of the world’s top 75 retail brands has grown 12 per cent to $1.5 trillion in the past year. While Amazon has grown its value and commands 27 per cent of the Top 75’s total brand value, robust performances by other brands such as China’s Alibaba show that strong brands can do more than get by — they can also redefine what is possible.

At No 2, Alibaba (valued at $152.5 billion) subsidiary Ali Cloud used its AI expertise to help medics in China significantly shorten the Coronavirus diagnosis time.

McDonald’s at No 3 position ($129.3 billion) is trumped to be the most valuable fast food brand in the world, according to the report, although others enjoyed rapid growth, thanks largely to delivery and other service innovations such as AI-powered suggestions at drive-throughs and delivery partnerships.

“The Coronavirus crisis underscores the essential role that retail plays in both our daily lives and the overall global economy,” said David Roth, CEO of The Store WPP EMEA and Asia and Chairman of BrandZ.

Survival strategies

The report identifies heroic examples of how retail companies are stepping up to meet consumer need and keep the world turning.

Roth said 22 years of BrandZ data analysis consistently confirmed that strong brands help their businesses to survive turbulent times. “While this is a fast-moving and ongoing story, the report allows us to show that those businesses that have invested in becoming a strong brand are potentially better able to withstand the current shock,” he said in a statement.

As brands respond to shifts in consumer behaviour even as they face changes to supply and demand and a restricted ability to trade, leading retailers are illustrating the strategies being undertaken to remain meaningfully different.

The study showed sector leaders continue to dominate. Louis Vuitton is the most valuable luxury brand, with a new global flagship store in Seoul and creative partnerships with major artists. At No 5 position and valued at $51.8 billion, parent company LVMH took only 72 hours to convert its production lines to make hand sanitisers.

Nike at No 6 (valued at $50.0 billion) slipped a position since its No 5 ranking in 2019, but led the apparel category with e-commerce, product customisation and collaborations driving strong sales.

Chinese e-commerce brand JD ranked No 13 and valued at $25.5 billion, delivered medical supplies and food using its extensive distribution network.

Fastest riser is pure retail

The fastest riser category in the report was dominated by pure retail, as grocery outlets registered a boom in demand with people stocking up. Digital-native brands scored high — Amazon, JD and Alibaba were up 32 per cent, 24 per cent and 16 per cent, respectively.

Physical retail stores also showed their ability to adapt to an online-only environment. Costco (No 11 – $28.7 billion) grew 35 per cent, Target (No 23 – $10.6 billion) was up 27 per cent and Walmart (No 8 – $45.8 billion) increased 24 per cent.

The ranking illustrates the scale and breadth of activity, making brands meaningfully different and salient to consumers in the Coronavirus age.

The report also highlighted smart retailers are resisting the temptation to cut back on advertising investment. Many have learnt their lessons from China where brands that ‘went dark’ are struggling to reconnect during the early stages of recovery, as consumers opt for those that actively demonstrated support.

Published on May 04, 2020

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