The highest in its 10-year history, the survey’s results reflect a new sense of consumer empowerment and smart business management by corporates
Based on the second and latest annual BrandZ Top 50 Most Valuable Indian Brands survey conducted by WPP and Millward Brown, the total value of India’s strongest brands has risen by a third or 33% over the past year, exceeding that of the Global Top 100 as well as the rankings for China, Latin America, and Indonesia.
The findings signify the highest rate of growth achieved in the 10 years since valuations began. India’s Top 50 brands are now worth $92.2 billion or £59.6 billion (up from just under $70 billion or £45.3 billion in 2014). The record-setting value increase is believed to be driven by brands’ successful response to the rising sense of empowerment among Indian consumers as well as the government’s efforts to create a more conducive business environment.
“The 2015 study shows that India is a market of great opportunities where consumers are feeling empowered, and this is increasingly reflected in their brand choices. The new Modi government is committed to creating an environment in which brands can flourish, said David Roth, CEO of WPP’s The Store.
“India is distinct in many ways from other fast-growing markets. However, so simply applying strategies that have proved successful elsewhere will not work in India. Any brand intending to compete in India must gain deep insights into its nuances – such as the need to modernise while respecting the past, and the desire to remain fundamentally Indian.”
Brands in the financial sector made the largest contribution to the overall upsurge with a record 49% in growth, while significant spikes were also seen across most other sectors, indicating the broad strength of the market’s economy and brands. Home and personal care brands achieved a combined increase of 32%, followed by the auto aftermarket sector (28%), automobile brands (27%), and telecommunications providers (21%).
Meanwhile, private companies, state-owned enterprises (SOEs), and brands owned by multinational corporations that are publicly traded in India all experienced a spurt, illustrating how receptive the market is to brands of all kinds. Fifty-two per cent of the brands in the Top 50 are privately-owned, evidence of India’s entrepreneurial energy.
30% of the brands are owned by multinationals; these have successfully adapted to the needs of Indian consumers and become so embedded in their lives that they are perceived as local. Key highlights of the 2015 BrandZ Top 50 Most Valuable Indian Brands study include:
Financial brands dominated. With 13 brands accounting for 41% of the Top 50’s value ($38.1 billion or £24.7 billion), the sector has built brand strength by making a consistent effort to serve consumers better. The biggest risers include Union Bank of India (ranked 46th, +72%), Punjab National Bank (ranked 22nd, +61%) and IndusInd Bank (ranked 13th, +46%).
Home and personal care brands grew 32%, a trend driven by increased disposable income and spending on premium products as well as investment by marketers across traditional and new media. The 12 brands hold 15% ($13.4 billion or £8.7 billion) of the ranking’s total brand value with the quickest risers being Lakme (ranked 44th, +69%), Lifebuoy (ranked 31st, +49%), and Colgate (ranked 26, +44%).
Purpose is power. Indian consumers expect brands to actively participate in building a better society, and those who do, have a higher brand value. For example, Lifebuoy has a social mission to change the hygiene behaviour of consumers while Asian Paints (ranked 5th) aspires to rejuvenate people’s living spaces and bring joy into their lives.
The survey indicates that Indian consumers have brand confidence. In stark contrast to other markets, trust in brands is growing steadily. Consumers appreciate brands and 33% say they trust them. Among the most trusted are jeweller Tanishq (ranked 21st), part of the respected Tata conglomerate, and Colgate which is part of Indian folklore and has been instrumental in organising dental check-up camps to raise dental hygiene awareness.
Meanwhile, all four new entrants namely Axis Bank, Canara Bank, MRF (tyres), and Royal Enfield are of Indian origin. Three are privately-owned and one is an SOE. However, although e-commerce and mobile brands are building scale and connecting with consumers at a frenetic pace, they aren’t yet eligible to be ranked in the Top 50 since they are not publicly traded.
The BrandZ India Top 50 outperforms SENSEX (a weighted index of 30 stocks on the Bombay Stock Exchange), showing how valuable brands deliver superior returns. A stock portfolio comprised of the Top 50 increased their share value 18.6% between August 2014 and July 2015, while India’s SENSEX index increased by only 1.5%. The ROI produced by the BrandZ portfolio was more than 12 times greater.
“India’s top brands are strong and getting stronger but there is no room for complacency. The top four had to grow their value by 37% on average to hold on to the same positions as last year, and close to 10% of the brands that made the Top 50 in 2014 have dropped out,” said Prasun Basu, Managing Director, South Asia of Millward Brown.
“To benefit from the continuing rise in consumer confidence and optimism, brands need to understand the changing consumer, respond with innovative products and breakthrough communication as well as experiment and invest in new media that reflect the spirit of the country today.”