Value concentrated among top-ranking brands
The majority of the BrandZ Top 20 Most Valuable Saudi Arabian brands 2017 is concentrated at the top of the ranking, and is focused on just a handful of key categories. The Top 2 brands account for 33 percent of the total value of the Top 20, and among the Top 5 – which make up two-thirds of the ranking’s total value – four of the leading brands are involved in sectors that are essential to the development of infrastructure.
Banks, insurers, real estate developers and telecommunications service providers dominate the Top 20 rankings, and this is a pattern we see in other markets that are developing quickly and opening up.
Such a high concentration of brand value at the top of the ranking is also consistent with other markets. The Top 5 make up 64 percent of the total value of the Saudi Arabia BrandZ Top 20 – almost exactly the same proportion of value that the Top 5 in Brazil contributes to the Top 20 brands there, and a little more than China (the Top 5 Chinese brands make up 59 percent of the Top 20’s value) and India (56 percent).
Outside of the Top 5, the brands in the Top 20 help paint a picture of the Saudi economy and daily life for Saudi consumers. Online connectivity is clearly a big part of people’s lives, along with food brands and supermarkets. There is slightly less diversity among the Top 20 in Saudi Arabia than in other markets, where airlines, entertainment brands such as pay TV providers, personal care brands and drinks tend to feature, but this too reflects the focus of the national economy and the priorities of the people.
Categories and brands
Financial services brands – banks and insurers – perform extremely well in the inaugural Saudi Arabian BrandZ Top 20 Most valuable Saudi Brands study , taking one in every two places in the ranking, two places in the Top 5, and contributing 40 percent of the Top 20’s total value. Brands that are essential to economic development tend to perform well in BrandZ valuation rankings around the world. As the providers of funding for new infrastructure that forms part of the government’s efforts to provide more housing and diversify the economy, banks and insurers are playing a crucial role in the economy. This is also a highly competitive banking market, and brands invest heavily in communications to highlight their individual strengths.
Fast-moving consumer goods brands make up three brands in the Top 20 and 13 percent of the ranking’s total value. This is broadly comparable to what we see in other markets, but while soft drinks and personal care brands – particularly hair and skin care products – tend to feature heavily, in Saudi Arabia it is food brands that make the strongest showing. The role that meal times play in Saudi family life – along with strong demand for snacks on the go – is behind this emphasis on food and dairy brands.
What also sets apart the Saudi ranking from those in other markets is the prevalence of Real Estate brands in the Top 20. While telecommunications brands, banks and FMCG brands tend to be among the most valuable in markets from China to Brazil, there is usually one stand-out category in each market that makes it distinct – and provides some insight into what makes the economy and consumers in that country different. In Brazil, for example, that distinctly Brazilian category is beer, with beer brands contributing 39 percent of the Top 20’s brand value. In India, it’s automotive brands, which are 29 percent of the Top 20 brands’ value, and in the Indonesian Top 20, tobacco brands comprise 37 percent. The strong showing by Real Estate brands in the Saudi ranking shows the sector’s importance and growing role in the local economy. Jabal Omar is behind the vast development taking place in the holy city of Makah (Mecca), while Dar Al-Arkan focuses on residential development.
As we have also seen in India and Indonesia, technology brands do not feature in the Saudi Arabian Top 20 rankings because local tech businesses have not yet reached the scale at which they become listed companies, one of the criteria for inclusion in BrandZ valuation studies. Major international technology brands such as YouTube, Google, Apple, Facebook and Twitter are widely used in this market, meaning there has been little need for home-grown alternatives to develop. This is quite a different picture to that in China, where many global tech brands such as Google, YouTube and Facebook are not available, so domestic brands have risen to prominence. Three of the Saudi Top 10 are technology-related brands, however, reflecting the role that connectivity plays in Saudi consumers’ lives: STC and Mobily provide consumers with their connection to the internet, via computer or mobile phone, and Jarir Bookstore has a strong focus on technology and is a leading supplier of phones and other tech hardware.
WAYS TO WIN
Businesses in Saudi Arabia that focus on building their brands and nurturing the power of strong brands get a significantly greater return on their investment; investment in brand affects the bottom line. In the Saudi Top 20, the 10 brands with the strongest Brand Power scores are together worth $24.962 billion, while the 10 with the lowest Brand Power scores have a combined value of $12.287 billion. Brand Power is a BrandZ metric of brand equity; it reflects a brand’s ability to predispose consumers to selecting that brand, and consumers’ willingness to pay a premium for it.
It is clear that many Saudi businesses are currently under-investing in brand-building. The brands that make the 2017 Top 20 have Brand Power scores that are almost triple those of the average among all Saudi brands. During a period of economic rebalancing, marketers and CEOs in Saudi Arabia should be looking afresh at the role of brand building in their strategy for business growth. And, in a market where trust and personal recommendations are key, they should ensure they are clearly communicating what their brand represents. Brands that make the 2017 BrandZ Most Valuable Saudi Brands are almost 10 times more likely than other brands to be recommended to family and friends.
Theory in action
Bupa Arabia will this year mark 20 years in Saudi Arabia, during which time it has established itself as the Kingdom’s leading provider of health insurance. Its mantra “With you for better health” gives the brand a clear mission – and a purpose that is evident in its offering and amplified through its communications. This brand purpose chimes with a series of innovations, including a telemedicine service that allows patients to consult with international doctors via teleconferencing, and access to ongoing health and wellness services such as elderly care and services for child health. The brand also strikes a balance between highlighting its international connections as part of the global Bupa Group, and its local relevance, through charity work over Ramadan.
Retailers lead on Brand Contribution
Brand Contribution measures the proportion of brand value that comes from brand equity alone, without financials or other factors. Strong brand equity indicates that a brand is resilient, is able to increase sales volume, and is able to charge a premium, and a high Brand Contribution score, on a scale of five down to one, is a measure of the impact that brand strength is having on sales.
Behind Brand Contribution, there are three aspects of brands that we know make people buy more of a brand and willingly pay more for it. These are: being Meaningful, Different and Salient, or top of mind.
Being Meaningful is the foundation of any brand; to be Meaningful, a brand needs to meet people’s needs and be liked. If not, it is unlikely to be bought. Trial of a product has a huge influence on whether people find a brand meaningful or not, but to get consumers to the point of trial means having advertising that focuses people’s attention on how the brand can enhance someone’s life.
Being Different means the brand has a competitive edge when compared to other brands in the same category. Brands need to be different and come across in their communications as different if they are to stand out, but simply standing out is not enough. Brands must be Different in a way that is Meaningful to the consumer.
Salience – coming to mind when a consumer thinks about a category – is the main lever of growth for a brand, and sales growth is rarely present when Salience is low. Boosting awareness is therefore essential to drive brand growth, but unless a brand is also Meaningful and Different, then Salience alone is unlikely to deliver that.
The Top 20 Most Valuable Saudi Brands are:
28% more Meaningful
31% more Different
46% more Salient
than the average of all Saudi brands
The Brand Contribution measure is what helps make the BrandZ rankings unique and the most authoritative . BrandZ is the only brand valuation methodology that obtains this customer view on brands through in-depth quantitative consumer research, both online and face-to-face, building up a global picture of brands on a category-by-category and market-by-market basis.
Saudi Arabia’s top-ranking brands for Brand Contribution are well-known and much-loved brands that are a regular part of consumers’ everyday lives – and have been part of people’s lives for more than a generation. The Top 5 brands based on Brand Contribution are all between 30 and 40 years old; today’s consumers have grown up seeing their parents shopping at Panda, Jarir Bookstore and Al Othaim. They have seen Almarai products in their fridges and in stores for as long as they can remember. Repeated happy experiences over a long time generate a strong affinity between consumers and brands. Global brands with strong Brand Contribution scores include Coca-Cola and Nike.
Panda and Al Othaim are both supermarket chains that continue to adapt to consumers’ changing needs and are expanding both in Saudi Arabia and in neighboring markets. Almarai is another Saudi brand that is exported around the region, famous for milk, fruit juice, cheese and yoghurt. Jarir Bookstore has evolved from its launch in the late 1970s as a supplier of books and school supplies into a modern-day books and technology hub. Panda, Almarai and Jarir all registered the maximum score of five on the Brand Contribution scale, with Al Othaim and the insurance company Tawuniya, which has been operating for 30 years, close behind with a score of four.
Starting from scratch
There are many brands in Saudi Arabia that are not readily recognized or are not well understood. This is common phenomenon in countries that are either less economically developed or, as in the case of Saudi Arabia, are only just beginning to open up. We call these brands ‘Clean Slate’ brands, and in Saudi Arabia, 30 percent of all brands fall into this category, compared to a global average of 14 percent.
Clean Slate brands have little brand equity driving consumer demand or margin, as they are not doing anything to justify a premium in consumers’ minds. The opportunity for these brands is to relaunch or reposition themselves, to define or reinvent themselves and make it clear to consumers what they promise. They must make their proposition highly relevant to their target audience, build visibility of the brand, through marketing, and of the product itself, through distribution, to reinforce awareness, build credibility and deliver sales.
% of brands that are regarded by consumers as ‘clean slates’
Saudi Arabia 30
Global average 14
United States 9
Top 5 Brands by Brand Contribution
WAYS TO WIN
Brands can punch above their financial weight in the BrandZ rankings by focusing on making meaningful connections with consumers. These connections are about more than being top of mind when they people think of a category, or delivering dependable quality and value. Meaningful connections are based on emotional links, and the most successful brands bring meaning to consumers’ lives through their products but also through their communications, with emotion-driven and memorable messages that are clearly relevant to the audience. Fast-moving consumer goods brands have frequent contact with consumers so find it easier to build meaning, but service brands can also build meaning, by looking beyond the traditional role their sector plays in people’s lies and developing new experiences through which consumers can experience the brand and share their values.
Theory in action
Mobily is a challenger brand in the telecommunications sector and has grown since its launch in 2005 to capture more than one-third of the mobile market. In a sector where quality is simply expected, Mobily has been a pioneer in developing packages of services priced together and in offering first-to-market services, such as personalized ringtones and unlimited data overseas. Its primary target audience has been young consumers. Mobily’s stores have a lounge-style layout to them, a first for the sector, and the brand’s community work and communications are also distinctive; Mobily focuses on connectivity in education, and has a ringtone that is instantly recognized across the Kingdom. Other challenger brands can learn from Mobily’s initial focus on a specific demographic with services that break the mould for the category before broadening the offer.
The five factors in brand wellness and finding the ‘sweet spot’
Just as there are many contributors to human wellbeing, there are multiple factors that contribute towards a healthy brand. BrandZ analysis has identified five key attributes shared by healthy, strong and valuable brands.
- Brands must be innovative, which means they’re seen as leading the way in their sector and shaking things up.
- They must also be creative, with powerful, memorable advertising.
- They provide a great brand experience that meets consumers’ needs, and is available when and where consumers need it
- There’s a strong sense of brand purpose, so the brand makes people’s lives better
- Over time, consumers develop a strong sense of love towards the brand.
When a brand has all five of these attributes, they have healthy ‘Lifeblood’; if they are lacking in any one area, they are at risk of damaging their brand health and underperforming in the market. If they fail on all five measures, they are classed as being ‘out of shape’. Some of the best-known and most valuable brands in the world that score highly on all five of these measures include Ikea and Google.
In Saudi Arabia, there is a small group of brands that performs well on all five Lifeblood measures, and these rank highly among the Top 20 Most Valuable Saudi Brands. They include: the telecommunications provider STC, which tops the ranking, Panda supermarkets, Jarir Bookstores and Almarai, the food and dairy brand. They have very healthy Lifeblood.
BrandZ analysis of 334 brands in Saudi Arabia, including the Top 20 Most Valuable brands, shows that only 8 percent are classed as healthy, while 57 percent are in the ‘OK’ range – healthy in some ways and struggling in others – and 35 percent are ‘out of shape’. Among the Top 20, 50 percent of brands have healthy Lifeblood, 35 percent are ‘OK’ and 15 percent are ‘out of shape’.
Because they’re worth it
When brands have strong Lifeblood, they are seen as more valuable to consumers and are able to charge more.
Among the Top 20 Saudi brands, there is a strong correlation between consumers’ sense of these brands being more highly priced than the competition, and a strong sense of that higher price being worth paying. More than 72 percent of Top 20 brands are in what we call the ‘sweet spot’ of being able to justify their premium to consumers. Some brands are operating in risky territory, however; nearly a quarter of the value of the Top 20 comes from brands that are perceived to be expensive but aren’t considered to be worth the extra money.
Brands that have healthy Lifeblood tend to have stronger Brand Power than those that are OK or out of shape. Brand Power is the proportion of volume driven by what the brand stands for, and the healthiest brands in the Top 20 have Brand Power scores that are seven times those of the less healthy brands.
WAYS TO WIN:
Brands should be aiming to get into the top right-hand side of this graph, and working hard to stay there. Those brands in the bottom right may be generating sales revenue for now – charging more than others in their category – but they are vulnerable to competition that either undercuts them on price or provides greater value to consumers at the same price. Those in the top left are undervaluing themselves and can afford to charge more if that is consistent with their business model, and those at the bottom left are ‘out of shape’. They need to rethink entirely their approach to brand building as they are perceived as cheap, yet still not worth the money. There is a strong link between brand health, or Lifeblood, and a strong performance in all of the five factors of wellness; one or two alone is not enough to sustain a healthy brand.
Theory in action:
“Not just a bookstore” has long been the tagline of Jarir Bookstores, and its range lives up to the promise, with computers and electronics as well as art and school supplies and books. It ticks the box for innovation by frequently being first to market with new mobile phones and other technology, and prides itself on in-store service. Many consumers have grown up buying their school supplies from Jarir and now shop here for their own children, and years of dependable service have led to love. The ability to shop in multiple categories during one shopping trip makes Jarir a destination for family shopping and, although it’s not the cheapest in its sector, consumers see the brand as one that justifies its premium pricing for specific shopping missions.
BRAND SAUDI ARABIA
Generous and brave – the features that set top Saudi brands apart
The BrandZ country personality profile for Saudi Arabia, compiled from the descriptions local consumers use about the country’s most valuable brands, shows that the Top 20 most valuable brands in this market share many of the attributes of the most valuable global brands.
This profile is created by asking consumers to select from a collection of 20 personality traits, and having them match the terms to the brands they know. The personality map below represents the cumulative impression that Saudi consumers have of the country’s Top 20 most valuable brands.
Saudi brands emerge as more brave and idealistic than leading global brands, and more caring and generous. They are more trustworthy and wise than the average of brands in this market – attributes that the most valuable global brands also over-index on. They also project a sense of being in control. While Saudi brands are seen generally as playful, the Top 20 are much less rebellious and more innocent than the global Top 20.
While the Top 20 most valuable global brands are perceived as less kind than the average of all brands around the world, the Saudi Top 20 ranks average for kindness. The most valuable global brands are seen as 7 percent more ‘different’ than Saudi brands, and this is an area brand managers in the Kingdom can focus on.
A country’s brand personality helps brand owners understand how a particular brand fits into consumers’ general view of brands across categories. For brands with international aspirations, country comparisons, or comparisons with the global average, can highlight potential areas of advantage and disadvantage, where association with the country of origin can either slow down or help propel a brand as it expands into new markets.
Brands in Saudi Arabia have much in common with the most valuable global brands. They share trustworthiness and friendliness, though are seen as less rebellious and more caring.
Saudi Arabia has a fairly low profile on the international stage, known outside the region mainly for being deeply religious and little understood beyond that. This affects the way people around the world regard the country, its people and – crucially for brand-builders looking to export Saudi brands – the products and services that come from there.
The J. Walter Thompson Intelligence Personality Atlas, a 27-country study of the stereotypes and perceptions of people around the world, highlights a divergence of opinion between how Saudis think about their country and its products and brands, how others in the region see them, and the views of people from the rest of the world.
The Personality Atlas, based on interviews with more than 6,000 people, shows there is a ‘positivity gap’ in Saudi Arabia, as with many other markets; this means people tend to feel more positively about their own country than people in other markets do.
Locally, half of Saudis say they feel very positively about their country overall; this compares with 35 percent of Chinese who feel very positively about China, 36 percent of Indonesians who say the same about their country, and 45 percent of Pakistanis who feel very positively about Pakistan.
Around the Middle East, however, 33 percent of people (excluding Saudis) feel very positively about Saudi Arabia, and globally, 28 percent of people feel the same. This level of global positivity is roughly on a par with people’s views on Hong Kong and Finland. The countries with the highest levels of global positivity are Canada and Australia; Saudi Arabia ranks higher than China, Spain and Egypt on this measure.
When asked specifically about the attributes they associate with Saudi Arabia, the Kingdom’s personality is describes as being religious and a bit dull. People around the world do not see Saudi Arabia as being cultured or creative; perceptions are very similar to the way Pakistan is seen around the world. There are other countries that are also seen as religious – including Thailand, India and Indonesia – but rather than making those countries seem dull, a religious focus is associated with contentment for these countries.
Saudis themselves, however, don’t just see themselves as religious; they describe their country as welcoming, family-focused, consistent, trustworthy and humorous. Consumers in other Middle Eastern countries are more likely than local Saudis to appreciate the Kingdom’s culture.
When asked specifically about products and brands from Saudi Arabia, global consumers don’t have the best impressions; they describe Saudi products as being “not for me” and “boring”, which is similar to perceptions of brands from other Middle Eastern markets, though consumers in neighboring markets, who perhaps know more about the Kingdom, are more open to buying Saudi. They are more likely than Saudis to see ‘made in Saudi Arabia’ as a marker of quality and trust, while Saudi consumers see local brands as reliable, ethical and built with pride.
WAYS TO WIN:
The BrandZ Top 20 Most Valuable Saudi Brands 2017 ranking shows that local consumers take pride in local brands and their success. These brands have become an important part of people’s lives by being relevant; the same rules of relevance apply to international brands looking to expand here. The key is making a locally relevant connection with consumers. Brand Saudi, meanwhile, is somewhat understood around the region as a symbol of quality and as being trustworthy, but Saudi brands looking to export beyond the Middle East have some work to do to convince consumers they are worth considering. Global consumers have difficulty seeing how Saudi brands might connect with their lives and are readily dismissed as lacking excitement.
Theory in action
Panda was the first supermarket chain to open in Saudi Arabia, and has managed to establish a network of stores across all regions of the Kingdom, which is something other grocery brands have not been able to match so far. Panda has adapted store formats to shoppers’ changing needs, and drives footfall with brochures in stores featuring special offers. Its communications go beyond price and assortment, and highlight the brand’s community work as well as fun activities that on occasion have broken Guinness World Records. Panda has expanded beyond Saudi Arabia and is now established across the United Arab Emirates and in Egypt.