Tata, LIC, Reliance most valued brands but Covid may spoil the equation

Tata group holds on to the top rank while Reliance climbs a spot; Indian Oil debuts in the top 10 list with a 41% jump in brand value

The Tata group topped the charts yet again this year, to continue as the country’s most valued brand, according to a report released by Brand Finance on Monday. The group has also become the first Indian brand to breach the $20 billion mark in its valuation (up from $18 billion last year). However with just a 2.3 per cent increase in brand value, the slowest ever in the past three years and the weakest among the top 10 (except for Airtel that has seen a drop in brand value), the brand could be up for a huge challenge this year, as Covid-19 wreaks havoc on businesses of all shades and sizes. 

The pandemic will have a debilitating impact on brands across the globe. While the report estimates that India’s top 100 most valuable brands could lose up to 15 per cent of brand value cumulatively, a potential drop of nearly $25 billion (compared to the original valuation as on January 1 2020), the value of the 500 most valuable brands in the world could take a one-trillion dollar hit as a result of the outbreak. 

The report has classified the Covid-19 effect into three categories: limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10 per cent brand value loss), and heavy impact (up to 20 per cent brand value loss), based on the level of brand value loss observed for each sector in the first quarter of 2020. Household products, utilities, telecom brands are among those impacted the least, in the list of moderates are tech, auto, beverages and others while the worst hit will be hotels, auto components, tourism and others. David Haigh, CEO, Brand Finance said, “Worldwide, brands across every sector need to brace themselves for the Coronavirus to massively affect their business activities, supply chain and revenues in a way that eclipses the 2003 SARS outbreak. The effects will be felt well into 2021.”

 

For brands to battle the crisis, size will matter and according to Savio D’Souza, Director, Brand Finance, this could help the Tata group weather the crisis better than most. “The size and diversity of the group could mean that it emerges from the pandemic, relatively speaking, unscathed,” he said. 
 

Also on the list is insurance giant LIC, keeping its second rank and at third spot is Reliance Industries whose brand value grew sharply by 25.2 per cent. The report believes that Reliance’s strategic decision to shift its focus from oil and gas to retail, media and telecoms sectors has paid off. 

 

Apart from measuring overall brand value, the report also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity loyalty, staff satisfaction, and corporate reputation. According to these criteria the Tata group’s Taj brand of hospitality chains (brand value $309 million) is India’s strongest brand. Reliance’s Jio that held the position last year has moved to second rank, followed by public sector company HP that made it to the third spot (from 12 last year).

Interestingly HDFC Bank that is on the top 10 list of most valuable brands has seen its strength being dented, climbing down to be the fifth strongest brand this year from second last year.