- MTN is South Africa's most valuable brand, and Capitec is the nation's strongest brand.
- This is according to Brand Finance's South Africa 50 report for 2021.
- Checkers beat Woolworths as the most reputable brand in SA, and big banks continue to trump their new rivals.
The Covid-19 pandemic changed the relevance and financial health of many companies. But when it comes to brands South Africans love, buy from and recommend to their friends, not much changed in 2020.
According to Brand Finance's 2021 annual report on the most valuable and strongest brands in South Africa, MTN remained the country's most valuable brand for a tenth consecutive year. While its direct competitor, Vodacom, leads in the South African market, it was still the second most valuable brand because it trails behind MTN when it comes to geographic reach because of the latter's market share in Africa and the Middle East.
Completing the top five were FNB, Old Mutual and Standard Bank. In fact, six of the most valuable brands in the country were financial services firms and banking, in particular, continued to be South Africa's most valuable sector.
Among other things, Brand Finance measures the strength of companies' brands by looking at consumers' familiarity with the brand, how often they consider it when making purchases, how often it is recommended and ultimately how that improves the companies' profits and margins.
The overall brand rankings consider brand strength - including familiarity and reputation - brand equity, and companies projected revenues based on what they disclose on their financial statements and analysts' forecasts.
Brand strength is more important in the retail and other consumer-facing sectors with companies like Woolworths associated with "proof of quality" while the meaning of Capitec's affordable banking promise resonates with its customers so strong that they frequently come out in its defence on social media.
So, companies in these sectors pour millions if not billions of rands towards making themselves more relevant to consumers, a phenomenon accelerated by Covid-19 to vie for market share in a world where disposable incomes are shrinking.
While the impact of Covid-19 didn't rock the boat too much in terms of overall brand rankings, some companies did displace reigning champions in certain sub-categories.
Most valuable vs strongest
Capitec overtook Vodacom as South Africa's strongest brand, and so did FNB and Carling Black Label beer, which pushed Vodacom down to fourth place.
Brand strength differs from the overall brand value because it only looks at marketing spend, customer familiarity and corporate reputation. It's not so much focused on revenues and footprint.
When it came to the best-known brand, Pick n Pay topped the chart, and Checkers came out on top as the most reputable brand, slightly overtaking Woolworths. FNB led the financial services brands in both those sub-categories.
Baigrie said this would likely force Woolworths to come back with a more innovative response to protect its market share.
Big incumbent banks still dominate
As for the dominance of the big incumbent banks in the overall rankings, Baigrie said even though the sector has become more competitive, brand equity does take time to build, even with huge marketing spend.
Baigrie said Brand Finance does include the new digital entrants like Discovery Bank, TymeBank, Bank Zero and African Bank in its research study. But none of these made it to the top 50 ranking table, because they haven't reached the scale of all the other brands in the running.
"They are still quite small compared to the traditional brands. Something like revenue is a huge input into the overall brand value calculation. It will still take these brands some time to grow their balance sheet to a level where we'll see them enter the rankings," he said.
Baigrie added that Brand Finance was monitoring these new players' brand strength and how often consumers consider them as an option. He said they are still lagging in those areas too. He also noted that in banking, customers tend to be very loyal to their current banks until they do something that really puts them off.
"It's not necessarily a sector where we'd just see shifts for the sake of it. I think these new banks really have to do something to attract these competitors' [customers], give them an incentive to switch," he said.