“You don’t see that growth globally,” BrandFinance SA MD Oliver Schmitz told Fin24 shortly after their report’s release. “That’s why people from oversees are coming to invest here: It’s stable and there is huge growth.”
He said what was surprising was that the top 10 brands have only grown by 14%, while the top 40 brands have grown by 22%, indicating more momentum from the bottom brands. The top 10 brands account for 52% of total brand value amongst the top 40, while MTN accounts for a massive 16.5% of total brand value.
MTN's 31% growth
“MTN has grown by 31% across all markets,” said Schmitz. “They have shown good respect and knowledge of South African and African market. They make good decisions where ever they go.”
He compared MTN, a South African-owned company with Vodacom, which is owned (65%) by a non-South African company Vodafone.
“It seems Vodacom was not focussing enough on issues like data, while MTN’s operations across Africa gave them key insights into the continent’s dynamic consumer behaviour.”
By sector, there were 13 financial services brands (banks and insurance) in the Top 50 generating R89bn (26%) of value, followed by five telecom brands generating 25% of value and 16 food and beverage brands generating 22.6%.
The report, which is in its third year, is gaining traction with major South African brands as international investors seek a better understanding of the market.
“We had a small event where the top 10 brands were presented with our findings and research methods,” he said. “They are starting to realise the importance of the report and how the quality of their brand impacts on their business.”
He said analysts are trying to determine the value of brands, which can be held to account. “It gives confidence to those brand values,” he said. “Brands are important because they talk to the consumer.”
The report included a ranking of nations according to brand value, revealing that South Africa’s national brand value increased by 116% over the past five years from $125m in 2009 to $270m in 2014.
“South Africa’s strong performance is also supported by its ranking amongst the worlds’ nations, improving from 36th position globally in 2009 to 29th in 2014,” said Brand South Africa CEO Miller Matola. “The announcement of South Africa’s Top 50 brands in 2013/14 therefore is an important driver of our nation brand reputation and competitiveness.”
South Africa distinguished itself as the pan-African leader in these categories, said BrandFinance Africa chairman Thebe Ikalafeng. Among the BrandAfrica 100 Most Valuable Brands in Africa, South Africa lead Africa with a 72% share, compared to Nigeria at 26% and Kenya at 2%. MTN topped the Africa table too.
A thriving “Made in South Africa” and entrepreneurship spirit was what built South Africa’s wealth, reputation and competitiveness, he said. “For Africa and certainly for South Africa to grow independent, create jobs and reduce inequality, it will need to invest in the attributes that built these brands – on top of increasing intra-Africa trade - to challenge global brands in Africa.”
In the category of South Africa’s strongest brand, MTN and FNB were both rated as this year’s strongest brands, said Ikalafeng.
“In the year that South Africa lost its founding democratic president and most valuable icon, Nelson Mandela, it’s interesting to note that the underlying core values of these brands closely follow those of Madiba’s. It’s no surprise then that these brands resonate with South African consumers where others battle.”