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Top 30 worth $37 billion

Big themes

Top 30 worth $37 billion

The combined value of the BrandZ™ Top 30 Most Valuable South African Brands 2019 is $37 billion, a 13 percent decrease over last year. While disappointing, the decline is largely due to outside factors, such as currency weakness, the Zuma years, and stock market value. In fact, the time chosen for the valuation period of South African brands this year neatly overlapped with the worst of the uncertainty in the country’s markets. Instead of making too much of the decrease, we should note that top SA brands are fast outpacing the decline, and in terms of value per GDP, they are much in line with global averages for top brands.

Standard Bank takes #1 (barely)

In spite of a large decline in brand value, Standard Bank managed to hold on to #1 by a slim margin. The company builds its brand value broadly on scale. It is the African continent’s largest bank by assets—and operates in more than 20 countries. Those in South Africa, however, know that Standard Bank has been affected more than most by the pressures on the country, with plenty of headlines about branch closings and layoffs. As a result, Standard Bank declined 26 percent in the last year and accounts for 23 percent of the total decline of South African brands. However, change may be in the air. The bank recently hired a new slate of marcom agencies and acknowledged that it needs to make big changes to keep pace with heightened consumer expectations. Time for a rebound. 

First National Bank

First National Bank is the second most valuable South African brand, separated from Standard Bank by only a tiny amount. Perhaps more than any other bank, FNB has courted youth and leaned heavily into digital. As a result, it has been named the Sunday Times coolest banking brand by young people for eight consecutive years. In BrandZ metrics, FNB scores extremely well in terms of experience—likely a reflection of its strong investments in technology—as well as communications. This shows the importance not merely of providing a great customer journey, but also making sure everyone knows about it.

Difference makes the difference

Compared to their global peers, South Africa’s top brands score quite well in two areas: meaning and salience. Salience means they are highly present in consumers’ minds when they’re considering a purchase—and likely speaks to years of investment in good advertising. For those unfamiliar with SA advertising, it is both richly emotional and broadly humorous. While the SA media market is certainly becoming more cluttered, great brands are still able to cut through and make a connection with consumers.

Meaning refers to brands’ ability to meet consumer needs and inspire love. Most of the top South African brands are practical choices and they do quite well in making their value known to consumers.

Difference is another matter, however. Difference is a major driver of success for SA brands, because in stressed economic times, consumers tend to stick with unique brands that fulfil their needs. That said top SA brands by and large are not distinct in the eyes of consumers, a probable reflection of the lightly differentiated categories that dominate the rankings: banking, retail, and telecom providers Compared with top brands in other countries, SA’s rank near the bottom on measures of difference.

Only three brands in the top 30—Capitec Bank, the Top 30 for difference. And Top 30 brands that were perceived as different lost only one third the brand value of those that weren’t.

You would think, for example, that with global giant Netflix rolling in, local favorite DStv would be under pressure. But in addition to a great line-up of channels, DStv offers something different: a uniquely South African approach to content. DStv recently announced plans to develop 52 local movies and 29 dramas in the coming year—a number its larger rival can’t hope to match. DStv also relies on a variety of packages tailor made for SA consumers—and even periodically gets into the generosity business by opening its entire catalogue to those who can’t afford higher end packages. As a result, DStv is among the most different SA brands, and the top rising brand in the Top 30. 

(graphic) The many ways to be different in SA

Discretionary consumers

In addition to being different, the most resilient SA brands tended to be in a discretionary category. This may seem odd at first, given the hand wringing that dominates contemporary discussions of the SA economy, but beer, fast food, and entertainment were among the most resilient of categories. This may reflect a simple fact SA has some very solid and well-loved brands in those areas. Think Nando’s, Castle, and DStv.

The brands in these categories also demonstrate a common occurrence in economies under stress. While consumers may trade down in many categories—abandoning name brands for supermarket generics is a growing trend—they will still purchase a beloved brand as an indulgence and return with a vengeance when good times come back. It’s not uncommon, for example, for South Africans to stop their DStv subscriptions or cancel their insurance for a few months when times get tough. But they subscribe again as soon as they can.

Top 5 learnings for marketers

Promise and deliver

Customers today are very aware of when companies promise an experience and don’t deliver on it—and research has shown that doing so is highly detrimental to a brand. People are three times more likely to recommend a brand that does what it says, and two times more likely to stay as customers.  In other words, if you want to build value and increase revenue, make sure you’re not talking any talk you can’t also walk.

Innovation drives growth

The most meaningfully different brands in the world all have one thing in common: they innovate, and often on a massive scale. Capitec is the only bank in a stressed category to notch gains in brand value, and it’s also leaned heavily into new ideas to succeed. Rain, this year’s special award winner for Innovation, has also flipped the script on SA’s stressed data market—and as a result is growing rapidly.

Make ‘em laugh

South Africans could seriously use a laugh. Kantar research has shown that people in SA want humor in advertising 20 percent more than the norm in other countries. However, humorous ads do even better if they also inform or address major social issues. Sitting atop Kantar’s Top 20 Best Liked Ads for 2018 is Nando’s “We can fix our S#*t,” a frenetic yet completely amusing look at contemporary South African highs and lows, with a positive, tongue in cheek tagline.

Stand for something

More than in most countries, SA’s top brands try to stand for something. This only makes sense. In a world in which political elites have long since lost moral authority, SA consumers crave leadership on the issues they care about. Nike scored the #2 spot on Kantar’s Top 20 Best Liked Ads by getting behind Caster Semenya in a hugely emotional way. Brands are a natural unifying force in society because their audience is not defined by race or politics, but by everything that brings people together.

Mind the experience gap

You might think that customer satisfaction drives growth, but brands that simply remove friction points to improve customer experiences grow their revenues 77 percent faster than those that don’t. SA brands that provide a great customer experience reap big dividends in word-of-mouth recommendations. Of the top 10 touchpoints across categories we have tested locally, word of mouth ranks highly in driving brand equity growth.  This would hardly be surprising in any country, but SA’s collectivist culture with its collaborative stokvels (buying clubs) make it even more so. Since people will ask and talk about your brand, make sure it shows a positive face whenever it can. After all, your next customer is likely to be talking with your current ones.