This year, the Australian retail sector has overtaken banking in terms of overall brand value, accounting for 25% of total brand value in the Brand Finance Australia 100 2021 ranking, according to the latest report by Brand Finance, the world’s leading brand valuation consultancy.
Supermarket brands such as most valuable, Woolworths (brand value up 6% to AU$12.6 billion) and competitor, Coles (up 4% to AU$7.9 billion), which is in 4th position, have been leading the charge by ensuring that grocery supply was not disrupted by COVID-19.
In contrast, the Australian banking sector has suffered an overall 11% drop in brand value due to weaker performance forecasts and unfavourable financial conditions caused by the COVID-19 pandemic. Of the 5 banking brands in the top 10, only Macquarie has managed to keep a steady brand value year-on-year, while Commonwealth Bank (down 11% to AU$9.1 billion), ANZ (down 5% to AU$6.4 billion), nab (down 20% to AU$5.5 billion), and Westpac (down 15% to AU$4.9 billion)have all suffered losses.
As increasing competition puts pressure on all telecoms brands, the value of the Telstra brand dropped by 18% to AU$9.5 billion, reaching its lowest point since 2014. The story is similar for Optus which decreased by 19% to AU$3.8 billion due to a drop in forecast revenue and external economic factors.
As the only mining brand in the top 10, BHP has dropped to 5th position this year following a 17% decrease in brand value to AU$7.0 billion. This is due to a greater economic risk across the market, which has impacted the discount rate applied to the valuation. Although revenue forecasts remained stable overall, a movement of revenues into less highly branded segments has reduced the royalty rate applied to the model, further reducing brand value.
The strongest brand this year is Commonwealth Bank, with a Brand Strength Index (BSI) score of 84.9 out of 100, followed by Optus and NRMA – the only other brands on the ranking with a AAA rating –who scored 86.3 and 82.7 out of 100, respectively.
Overall, the total brand value for the top 100 most valuable Australian brands is down 9.2% since the 2020 valuations, a decrease of AU$14.7 billion. The brand value in the top 100 ranking represents AU$144 billion of an estimated AU$294 billion of all brand value in Australia.
Apple named most valuable brand
Globally, Apple has overtaken Amazon and Googleto reclaim the title of the world’s most valuable brand for the first time since 2016. Apple has the success of its diversification strategy to thank for an impressive 80% brand value increase to AU$367.7 billion and its position at the top of the Brand Finance Global 500 2021 ranking.
Under Tim Cook’s leadership, especially over the past five years, Apple began to focus on developing its growth strategies above and beyond the iPhone – which in 2020 accounted for half of sales versus two-thirds in 2015. The diversification policy has seen the brand expand into digital and subscription services, including the App Store, iCloud, Apple Podcasts, Apple Music, Apple TV, and Apple Arcade. On New Year’s Day alone, App Store customers spent US$540 million on digital goods and services.
Apple’s transformation and ability to reinvent itself time and time again is setting it apart from other hardware makers and has contributed to the brand becoming the first US company to reach a US$2 trillion market cap in August 2020. With rumours resurfacing that Apple’s hotly anticipated Titan electric vehicle foray is underway again, it seems that there is no limit to what the brand can turn its hand to.
Amazon thrives in 2020
Despite relinquishing its position at the top, second-ranked Amazon has still managed to record a healthy 11% brand value growth to AU$354.9 billion. The retail giant is one of the few brands that benefitted considerably from the pandemic and the resulting unprecedented surge in demand as consumers turned online following store closures. Over Q2 and Q3 of 2020, e-commerce platforms experienced the highest revenue growth since 2016.
Most recently – further leveraging the circumstances of the pandemic – Amazon has acquired 11 passenger planes from struggling North American airlines to expand its air logistics capabilities. A tactical purchase to support its fast-growing customer base, but also a strategic move towards building its own end-to-end supply chain, the fleet can allow the brand to become a serious contender in air transportation in due time. Another example of Amazon’s relentless innovation in the face of global adversity, the brand has also announced its foray into the health sector with the launch of Amazon Pharmacy and fitness tracker Halo. Before it brought success to Apple, daring diversification had already been the hallmark of Amazon’s growth strategy, which it continues to pursue with impressive results.
Technology drives brand value
In a year epitomised by global lockdowns, with working from home becoming the new normal and an unprecedented reliance on digital communication, retail, and entertainment, tech brands and brands successfully leveraging technological innovation have significantly boosted their brand values. Accounting for 14% of total brand value in the 2021 ranking, tech remains the most valuable sector in the Brand Finance Global 500, with 47 brands represented and a combined brand value of AU$1.4 trillion.
Aided by the increased demand for home deliveries and safe means of travel during the pandemic, Uber has seen a 29% brand value jump to AU$28.6 billion and entered the top 100 at 82nd. Similarly, Meituan, China’s largest provider of on-demand online services has gone up by an impressive 56% to AU$10.0 billion, resulting in one of the biggest hikes up the ranking, as it jumped 216 spots to 265th.
Similarly, software providers such as Microsoft (up 16% to AU$196.1 billion), SAP (up 5% to AU$25.1 billion), Salesforce (up 24% to AU$18.4 billion), Adobe (up 20% to AU$16.3billion), and a new entrant to the ranking, Servicenow (up 34% to AU$6.0 billion), all enjoyed a boost in brand value as businesses raced to transition online and offices gave way to remote working for the greater part of last year.
David Haigh, CEO of Brand Finance, commented:
“With the onset of the pandemic, tech brands have experienced unprecedented demand for their products and services. At the same time, across sectors, brands which have pushed the boundaries of technological innovation have remained a cut above the rest, able to pivot their business to adapt to consumers’ changing needs. 2021 is the final call to get on board for all brands still stuck in the 20th century.”
Tesla races up ranking
The importance of technological innovation as a driving force behind brand value is best exemplified by Tesla (up 148% to AU$44.7 billion), the fastest-growing brand in the Brand Finance Global 500 2021 ranking. Emerging unscathed from the various controversies surrounding CEO, Elon Musk, Tesla’s market capitalisation has grown by an eyewatering US$500 billion over the last year, making it worth as much as the nine largest automobile manufacturers in the world combined.
The California-headquartered auto brand has also celebrated record numbers of sales this year, ramping up production of its Model Y car and expanding into new markets by opening a plant in Shanghai. As the world’s best-selling plug-in and battery electric passenger car manufacturer as well as a pioneer in using artificial intelligence in the automobile industry, Tesla has continued to strive for innovation and sustainability, developing more efficient battery cells.
Woolworths most valuable brand in Australia
Woolworths maintained its spot as the most valuable brand in Australia and the wider region of Oceania for the second year running, following a healthy brand value growth of 6% to AU$12.6 billion. Fellow supermarket brand and competitor, Coles, has also enjoyed a brand value boost, growing by 4% to AU$7.9 billion and climbing 1 spot in the Brand Finance Australia 100 2021 ranking.
Both supermarket brands played an important part in supporting the economy during a difficult year defined by the pandemic. Apart from continuing to provide food and other essential items to the people of Australia during lockdowns, the brands joined forces to help the country’s fishing industry when it was impacted by China’s live import ban, for instance, by selling lobsters at discounted rates.
Woolworths, Coles, and Officeworks (up 63% to AU$476 million)have been key players in contributing to the overall 3% growth of the Australian retail sector, which has overtaken banking to become the country’s most valuable industry. Of the 17 retail brands in the Brand Finance Australia 100 2021 ranking, 11 have remained steady or recorded brand value growth, including Reece Australia (up 14% to AU$901 million), Target (up 18% to AU$667 million), and Priceline (up 16% to US$350 million), all of which provided essential food, medicine, and home goods to consumers throughout the pandemic.
Retail brand, Officeworks, is this year’s fastest-growing Australian brand, recording an impressive 63% growth in brand value to AU$476 million. As the country’s largest supplier of office and stationary products, the brand’s increase was driven by improved revenue growth both online and in-store as more Australians turned to working and learning from home due to the pandemic.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“Despite the precarious financial conditions created by the pandemic, the Australian retail sector has benefitted considerably from the boom in spending on essential items such as food, medicine, and other household goods. While strong Australian supermarket brands such as Woolworths and Coles have been instrumental in driving up this brand value, the sector is not void of vulnerability to disruption, especially from tech-led challengers.”
Australian banking sector continues to falter
Australian banks continue to falter, as weaker performance forecasts and a less favourable economic outlook have taken their toll on the banking brands in the Brand Finance Australia 100 2021 ranking. Exacerbated by the dent in profits and lower interest rates set by central banks as a result of the pandemic, the banking sector has suffered an overall 11% drop in brand value and is no longer the most valuable industry in Australia.
While 5 banking brands remain in the top 10, all have suffered a drop in brand value, apart from Macquarie which has maintained its brand value of AU$3.5 billion and jumped one spot in the ranking, re-entering the top 10. The country’s leading banking brand, Commonwealth Bank has dropped by 11% to AU$9.1 billion, amid weaker performance forecasts that continue to plague the rest of the sector.
After two years of significant brand value losses in 2019 and 2020 following the Royal Commission scandal, ANZ may be turning the tide on its misfortune, as its brand value only dropped by 5% to AU$6.4 billion this year. The brand has also managed to move up to 6th position due to the much more damaging drop experienced by its competitor, nab (down 20% to AU$5.5 billion). nab’s brand value has been falling consistently, suffering a loss of over 20% for the second consecutive year primarily due to weakening forecasts that see revenue flatten over the next five years.
Westpac (down 15% to AU$4.9 billion) kept its position as the 8th most valuable brand despite suffering a brand value drop for the fifth consecutive year. This is unlikely to change in the year ahead due to pessimistic forecasts and detrimental economic conditions that plague the sector.
Mark Crowe, Managing Director, Brand Finance Australia, commented:
“It has been a difficult year for Australian banks, who certainly have acclimatised to being closely scrutinised over the last few years. With forecasts and a difficult economic situation ahead, banks will need to invest to sustain their improvement in customer sentiment, which will ultimately help drive future revenues”.
Long haul problems for leisure & tourism and aviation
A clear impact of the COVID-19 pandemic, aerospace and airline brands account for six out of the ten fastest-falling brands in this year’s Brand Finance Global 500, including Boeing (down 42% to AU$19.7 billion), American Airlines (down 42% to AU$7.5 billion), United Airlines (down 42% to AU$7.0 billion), and Delta (down 40% to AU$8.1 billion).
In line with industry trends, Australian airlines brands have also taken a hit, namely Qantas (down 29% to AU$2.2 billion), Jetstar (down 23% to AU$503 million), and Virgin Australia (down 14% to AU$484 million). Few sectors have been as severely affected by the pandemic as the airlines industry, with surges in COVID-19 cases and border restrictions continuously prompting flight cancellations. While some airlines brands – such as Qantas – may try to hang on to their profits by offering low prices on domestic flights and taking part in the government’s repatriation scheme, the sector’s woes will only be solved by an effective global rollout of the vaccine in the year ahead.
David Haigh, CEO of Brand Finance, commented:
“Few sectors have been as deeply affected by the pandemic as the aviation industries. These brands are no stranger to rough patches, from the 2001 terror attacks and the 2008 financial crisis, to more recently the growing spotlight on their contribution to the climate crisis. The road to recovery and hopes are pinned on the speedy and successful roll out of the vaccines to open borders and kick-start the global economy once again.”
All leisure and tourism brands on the Brand Finance Australia 100 2021 ranking have also dropped in brand value this year, with Flight Centre and The Star as the nation’s fastest-falling brands.
Down by 58% to AU$406 million, Flight Centre has experienced the greatest decline in brand value this year due to the bleak prospects ahead for the global travel industry. With heavy restrictions on domestic and global travel predicted to last for most of the year, the travel agency’s forecasts for recovery remain uncertain. The story is similar for Australian casino operator, The Star (down 46% to AU$410 million), which was heavily impacted by disruptions to its operations due to COVID-19 and subsequently experienced a significant decline in financial performance.
WeChat overtakes Ferrari
Apart from calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Certified by ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 50,000 respondents in nearly 30 countries and across more than 20 sectors. According to these criteria, WeChat has usurped Ferrari to become the world’s strongest brand with a Brand Strength Index (BSI) score of 95.4 out of 100. The Chinese mobile app is one of merely 11 brands in the ranking to have been awarded the elite AAA+ brand strength rating.
Alongside revenue forecasts, brand strength is a crucial driver of brand value. As WeChat’s brand strength grew, its brand value also enjoyed a rapid boost, increasing by 21% to AU$94.9 billion and jumping 9 spots on the ranking to enter the top 10 for the first time.
As one of China’s home-grown tech successes with very strong equity, WeChatenjoyed high scores in reputation and consideration among Chinese consumers, according to Brand Finance’s original market research. The brand has successfully implemented a broad and all-encompassing proposition, offering services from messaging and banking, to taxi services and online shopping – the all-in-one app has become essential to many users’ daily lives.
During the pandemic, WeChat ran several government-mandated health code apps to keep track of those travelling or in quarantine, providing access to real-time data on COVID-19, online consultations, and self-diagnosis services powered by artificial intelligence to over 300 million users.
In Australia, Commonwealth Bank is the nation’s strongest brand with a Brand Strength Index (BSI) score of 85.6 out of 100 and a corresponding AAA brand strength rating.
According to our Global Brand Equity Monitor research, Commonwealth Bank is a cut above the rest in terms of its sheer presence and ubiquity, outperforming other Australian banks in familiarity amongst consumers. The bank also scored higher than its peers for word-of-mouth incidence, which is paramount in this sector as personal recommendation is important. This, coupled with Commonwealth Bank’s strong reputation for product range, website, apps, and services puts the brand in a very strong position for the coming year.
“Commonwealth Bank proves that being a strong brand is often the result of a balanced performance across the board rather than being outstanding in one particular feature.”
Telecoms brand, Optus,is the second strongest brand in the country, with a BSI score of 84.9 out of 100 and a corresponding AAA brand strength rating. During this period where consumers are increasingly relying on digital connectivity,
Mark Crowe, Managing Director, Brand Finance Australia, commented
“Optus’ sector-leading scores for customer service, availability, accessibility, website, and apps are indicative of a brand which is delivering on its promises.”
NRMA has increased in brand strength year-on-year to become the third strongest brand in Australia, with a BSI score of 84.6 out of 100. This is a significant achievement for the brand, which is one out of three brands to have been awarded an AAA impressive brand strength rating.
Mark Crowe, Managing Director, Brand Finance Australia, commented
“NRMA’s advertising campaign following last summer’s record-breaking bushfires helped boost consumer perceptions of the brand, which ranked particularly high in quality, innovation, and value for money.”
Boasting a BSI score of 81.7 out of 100, Bunnings is a notable mention, as it remains a firm favourite amongst Australian consumers with the highest reputation score of all brands measured in the country. Virtually every homeowner is familiar with the retail brand, demonstrated by its incredibly high consideration levels of 97% amongst those familiar with the brand.
Every year, Brand Finance puts 5,000 of the biggest brands to the test, evaluating their strength and quantifying their value, and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s 500 most valuable brands are included in the Brand Finance Global 500 2021 report.
Join our virtual launch event The Role of Tech Brands in Driving Economic Growth, featuring Deloitte Global CEO, Punit Renjen, at 1400–1600 GMT on 26th January to learn more about the results of this year’s study.
The full Brand Finance Global 500 2021 and Brand Guardianship Index 2021 rankings, additional insights, charts, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Global 500 2021 report.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Please see below for a full explanation of our methodology.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand value refers to the present value of earnings specifically related to brand reputation. Organisations own and control these earnings by owning trademark rights.
All brand valuation methodologies are essentially trying to identify this, although the approach and assumptions differ. As a result, published brand values can be different.
These differences are similar to the way equity analysts provide business valuations that are different to one another. The only way you find out the “real” value is by looking at what people really pay.
As a result, Brand Finance always incorporates a review of what users of brands actually pay for the use of brands in the form of brand royalty agreements, which are found in more or less every sector in the world.
This is known as the “Royalty Relief” methodology and is by far the most widely used approach for brand valuations since it is grounded in reality.
It is the basis for our public rankings but we always augment it with a real understanding of people’s perceptions and their effects on demand – from our database of market research on over 3000 brands in over 30 markets.
For our rankings, Brand Finance uses the simplest method possible to help readers understand, gain trust in, and actively use brand valuations.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668.
Our Brand Strength Index assessment, a balanced scorecard of brand-related measures, is also compliant with international standards (ISO 20671) and operates as a predictive tool of future brand value changes and a control panel to help business improving marketing.
We do this in the following four steps:
We review what brands already pay in royalty agreements. This is augmented by an analysis of how brands impact profitability in the sector versus generic brands.
This results in a range of possible royalties that could be charged in the sector for brands (for example a range of 0% to 2% of revenue).
We adjust the rate higher or lower for brands by analysing Brand Strength. We analyse brand strength by looking at three core pillars: “Investment” which are activities supporting the future strength of the brand; “Equity” which are real perceptions sourced from our original market research and other data partners; “Performance” which are brand-related measures of business results, such as market share.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+, in a format similar to a credit rating.
The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
We determine brand-specific revenues as a proportion of parent company revenues attributable to the brand in question and forecast those revenues by analysing historic revenues, equity analyst forecasts, and economic growth rates.
We then apply the royalty rate to the forecast revenues to derive brand revenues and apply the relevant valuation assumptions to arrive at a discounted, post-tax present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.