The country's top corporates have slipped in ranking according to the latest study of the world's leading 500 brands released by UK-based Brand Finance. The Tata brand has slipped three places to 104, the lowest in 11 years, though brand value has grown nine per cent to touch $14.2 billion in 2018.
Last year, Tata's brand value was $13.1 billion, which was also the first time it went out of the top 100 list, coming in at 101, according to Brand Finance, which has been releasing the report since 2007.
According to David Haigh, chief executive officer, Brand Finance, the Tata group has undergone a massive overhaul with new chairman N Chandrasekaran now having the task of stabilising the business. “Brands like Tata Steel have suffered heavy losses in the UK. And at home, Tata Motors is facing stiff competition from foreign brands. These heavyweights will now need to focus on specialising rather than diving into too many markets,” Haigh says.
The slippage comes as e-commerce giant Amazon emerges as the world's leading global brand, moving up two places in a year, with its brand value currently at $150.8 billion. This is a 42 per cent year-on-year increase for Amazon, Haigh says; pointing to how the expansive growth strategy, visible in India as well, has helped improve both brand value and ranking.
“Jeff Bezos (founder of Amazon) once said that brands are more important online than they are in the physical world. He has proved himself right by choosing the name Amazon, among the most powerful rivers in the world. The Amazon brand has an unstoppable force to it,” Haigh said.
Cupertino-based Apple and tech major Google, come in at number two and three this year, the former defending its position and the latter trading places with Amazon. Apple's brand value grew 37 per cent year-on-year to touch $146.3 billion, while Google's year-on-year growth was 10 per cent only at $120.9 billion.
While Tata's current brand value is near its 2014 value, which was $14.78 billion, it is still way below its peak value of $18.16 billion achieved in 2013. Tata's brand value, in fact, has hovered largely in the $13-15 billion range over the last five years.
Some other Indian names that figure on the list, but lower down the pecking order include Airtel (rank: 252), Infosys (287), Life Insurance Corporation of India (292), State Bank of India (334), HCL (390), Indian Oil (427), Reliance (445) and Larsen & Toubro (464).
The drop in ranking for these brands is anywhere between 18 (HCL) and 106 (Reliance), indicating that making their presence felt on the global stage can be challenging for even big names.
“There are no new Indian entrants on our Global 500. It is therefore crucial for Indian brands to look ahead and adopt a far-sighted strategy if they want to compete with foreign players in the US and China,” Haigh says.
Barring the Tatas and HCL, which have seen brand values increase despite a drop in rankings this year, the others have not been that lucky. Reliance has seen a year-on-year erosion in brand value to the tune of 17 per cent, followed by L&T at 16 per cent, Airtel at 14 per cent, LIC at 13 per cent and Indian Oil at eight per cent. Infosys and SBI, in contrast, have seen a marginal drop in brand value, between three and four per cent.
Haigh says the dominance of digital is set to grow. “This is the first time since the inception of the study that technology brands claim all the five places in the league table,” he says. Samsung (fourth, US$92.3 billion) and Facebook (fifth, US$89.7 billion) have both recorded an impressive year-on-year brand value growth of 39 per cent and 45 per cent respectively, Haigh said, overtaking AT&T (sixth, US$82.4 billion). “The technology sector accounts for more than twice as much brand value as telecom,” he said.
Chinese brands, Haigh said, were narrowing the gap with international rivals with their share of global brand value touching 15 per cent (on the Brand Finance list) versus three per cent a decade ago.
US’s share of global brand value currently is 44 per cent, while Japan, Germany and France come in at third, fourth and fifth positions, with a share of seven, six and five per cent of global brand value. UK is sixth with a four per cent share of global brand value.
Haigh says that while China has been pursuing a dual strategy of building home-grown brands, and also acquiring underperforming international brands, like Volvo and Pirelli, the emphasis now is on local names. “Brands like Huawei, Ping An, State Grid, Evergrande, ICBC, Yili, Haval, Wuliangye, and many others are being recognised worldwide as quality brands. We expect to see this develop rapidly in more sectors,” he said.