Top 50 brands worth over US$70 billion
The combined value of the BrandZ Top 50 Most Valuable Indonesian Brands in 2017 is US$71.554 billion, which represents an 8 percent increase over the total value of the Top 50 from just 12 months ago. Last year, growth among the Top 50 averaged just 2 percent, so the jump in 2017 reflects the return to health of the Indonesian economy and the growth in consumer confidence. It also mirrors the 8 percent growth in brand value posted by the Top 100 Most Valuable Global Brands in 2017. Given that Indonesian brands are starting from a much smaller base, and are based in a fast-developing economy, we expect to see an even higher rate of growth in the year ahead.
Banks and tobacco brands are strongest performers
Financial services brands take four of the top 10 places in the 2017 Indonesia ranking, and tobacco brands occupy five of the remaining six top spots. Banks and insurance brands tend to feature strongly in BrandZ rankings around the world, particularly in fast-growth markets, as access to finance is integral to the development of infrastructure. Indonesia is unusual for having such strong representation by tobacco brands, though. This is a market in which smoking is still common, and while there are government efforts to restrict tobacco advertising, most of the leading cigarette brands are still growing. Several banks were among the fastest-growing brands in the Top 50 over the past 12 months, with Sinar Mas up 50 percent over last year’s brand value; CIMB Niaga, BTN and BNI were all among the fastest 10 risers, with growth of at least 18 percent each.
BCA takes gold medal again
Bank Central Asia tops the BrandZ Top 50 Most Valuable Indonesian Brands for the third year running, and has delivered growth in brand value of 13 percent in the past year, far outstripping the average growth for the Top 50, and outpacing many other brands in its category. BCA marks its 60th birthday this year, having built a reputation among consumers for being one of the most accessible banks in the country, and being “Always at your side”. It has more than 1,200 branches and 17,000 ATMs, but in the past year has been focusing on digital innovations such as in-app and video banking.
Mega brands dominate ranking
The Top 5 brands in the 2017 ranking have a combined value of US$40.876 billion, and account for 57 percent of the total value of the entire Top 50. Such a strong concentration of value at the top of a country ranking is similar to what we see in China, India, Brazil and Saudi Arabia. In contrast, the Top 5 brands in the Top 100 Most Valuable Global brands, however, account for a much smaller proportion of the ranking – between them they contribute about a quarter of the value of the top 50 brands.
Brand equity is fueling value growth
The most valuable brands in Indonesia are proving as effective as the leading Chinese brands and many top global brands at creating a consumer predisposition to purchase. The BrandZ Power Index, a measure of brand equity, ranks brands against a global average of all brands set at 100. The Indonesian Top 50 have a Power score in 2017 of 213, compared to 185 for the Top 50 in China and 190 for the top 50 of the Global Top 100. A score of 200 indicates that a brand is performing twice as well as the average brand. What’s important to note is that the brands with the strongest Power scores have grown their value the fastest over the three years we have been running the Indonesia ranking. Those brands with the highest scores, between them averaging 343, grew by 11 percent, while the brands with average Power grew by just 1 percent, and those with Power scores under the 100 average suffered a 9 percent drop in brand value.
FMCG brands win hearts, gain value
Personal care, food and drink brands have featured strongly in the Indonesian Top 50 since the ranking’s launch three years ago, and continue to do so in 2017, taking 15 of the Top 50 positions in 2017. They are a combination of strong local brands that have become household staples, such as noodle and cooking sauce brands, bottled water and, new for this year, Roma biscuits. There are also global brands that are so well loved in Indonesia they are often considered local brands; names like Sunsilk, Pond’s and Pepsodent. In the past year, the value of food and dairy brands in the ranking has grown by 21 percent, while growth for home care and personal care brands has been slower, giving an overall average growth for FMCG brands of 9 per cent.
Retailers facing tough times
The enthusiasm with which Indonesian consumers have embraced online and mobile commerce has created a testing environment for the brands that have built their business models on distribution through physical stores. Among the four retail brands that feature in the Indonesian Top 50, only one – Alfa – posted a higher brand value this year than last year. Alfa grew 10 percent and climbed one place up the rankings, having focused on innovation and links between online and offline services for several years, most recently launching a virtual store. The other supermarket chain, a hardware store brand and the country’s biggest department store chain, Matahari, all slipped down the rankings this year. These brands remain strong, however, and all are investing heavily in new ways of engaging with shoppers, both online and in physical stores, which could help them counter this year’s dip.
The gap with global brands is closing
In each of the three years we have compiled the BrandZ Top 50 Most Valuable Indonesian Brands, the leading brand in this market has been tantalizingly close to having sufficient brand value to break into the Top 100 Most Valuable Global Brands. This year, the top Indonesian brand, the bank BCA, has grown in value and has narrowed the gap between itself and the Global Top 100 to just US$800 million, down from $1.1 billion a year ago. With continued investment in brand development and business expansion, we anticipate one if not several Indonesian brands will soon make it into the annual global ranking.
Top 5 learnings for marketers
1 Have a purpose
This is a clear purpose that goes beyond simply providing a good product or service – although that must be a starting point. The purpose of a brand must be bigger than itself and possibly even bigger than the category, though it must make sense for the brand. Stand for something. Purpose doesn’t just help a brand stand out, it helps them grow brand value.
2 Focus on innovation
Innovation is not just the buzzword of the moment, and it doesn’t just mean launching an app or adding some features to an online store. True, innovation means regularly rethinking every aspect of what a brand does, thinking like a disruptor, and being prepared to break with tradition when it comes to the way a category communicates. In some cases, it even means reconsidering which category a business is operating in. Some of the fastest-growing brands in Indonesia and the world are extending into new categories, and technology can be the catalyst for that change.
3 Make experience count
In competitive categories and with a market of price-conscious consumers, it’s essential that interactions with a brand go beyond the build-up to a sale. There are many opportunities along the path to purchase – and many more after that as well – that enable brands to provide consumers with moments of delight, a sense of pleasure, satisfaction, community, and more. The experience associated with a brand can be a key differentiator in a crowded market, and it can help to justify a premium.
4 Be lovable
Lovability is not just for the high-end brands that we tend to associate with romantic love. The least expensive products in your consumers’ shopping baskets can be the most loved brands in their homes. Love takes a long time to earn, but is a highly valuable resource for brands. It keeps people interested in your brand, keeps competitors out of contention, and in the gaps between innovations, it can help brands sustain sales and brand value.
5 Be bold and seize international opportunities
Only a handful of Indonesian brands are widely sold or have even been heard of in other markets, and outside the region, Indomie noodles and the national airline, Garuda Indonesia, are the only Indonesian brands that most consumers would be able to name. This used to be the case in China too, where a large and lucrative domestic market has meant brands can successfully build a large and valuable business without ever having to leave home. But the most pioneering Chinese brands have shown what can be achieved when they take their products and services to the world. The first Chinese brand (China Mobile) entered the Global Top 100 in 2006, and in 2017 there are 13 Chinese brands in the ranking with a combined value of US$406 billion. As they have expanded, they have changed perceptions of what it means to be “Made in China”. Indonesian brands should be inspired by their counterparts from China, and look beyond borders for growth opportunities.