Despite Covid-19, the Global Top 100 increases 6 percent
Winning brands helped people navigate life online and offline
The BrandZ™ Top 100 Most Valuable Global Brands recorded a steady increase in value of 6 percent, compared with a 7 percent increase a year ago, adding over $277 billion in value to reach almost $5 trillion in total value, despite the economic toll of the Corona-19 pandemic.
The resilient BrandZ™ Top 10 Powerful Brands Portfolio, comprised of brands with the strongest equity, dipped much less than other key stock market indices, and began recovering quickly as it did after the Global Recession over a decade ago. The BrandZ™ Top 10 Powerful Brands Portfolio increased 285.2 percent, more than twice the growth rate of the S&P 500, between 2006 and 2020.
The strong brand equity of the BrandZ™ Global Top 100 and the composition of the ranking, with technology-related brands strongly represented, moderated potential erosion of value. The Top 20 brands accounted for 60 percent of the total Top 100 value.
The growing presence of Chinese brands in the BrandZ™ Global Top 100, now totaling 17, also moderated the impact of the pandemic on total value, because China was beginning to reopen its economy at the time the valuations were calculated during the spring of 2020.
Still, economic repercussions of Covid-19 eliminated an estimated half of the brand value gained by the BrandZ™ Global Top 100 between April 2019 and the outbreak of the pandemic in January 2020, according to BrandZ™ analysis.
Pandemic accentuates trends
The pandemic accentuated certain existing trends that shaped brand and category value fluctuations during most of the 12-month period covered by the BrandZ™ Global Top 100 report. Winning brands were aligned with—and drove—these trends
Brands that enabled people to navigate life with digital devices, and achieve convenience and comfort, generally increased in value or at least outperformed their category. These brands had anticipated, even invented, the online-offline dynamics of modern life that became indispensable for survival during the lockdown, homebound weeks of avoiding the contagion.
Ongoing digitization strategies helped fast food brands cope when restaurant locations closed to slow the spread of the coronavirus. Although the fast foods category declined 2 percent, Domino’s Pizza, in particular, met the moment. Having built its brand in part by investing in the technology to deliver food quickly and still hot, Domino’s Pizza led the category in value increase, 12 percent.
Similarly, although the apparel category remained unchanged in value, the athleisure brand Lululemon increased 40 percent, partly because it was on-trend with the casual dress people preferred for at-home quarantine, and it offered an extensive range of online yoga courses to support its brand community.
Brands that were misaligned with these trends, or in categories experiencing transition and disruption, such as energy and cars, mostly declined. In the car category, only Tesla increased, 22 percent.
Categories perform unevenly
The pandemic impacted the 14 categories examined in the report unevenly. Only six categories increased in value and those categories each increased less than 5 percent except for retail, technology, and insurance, which increased 21 percent, 10 percent, and 8 percent, respectively. The insurance category increased in value primarily because of the results of Asian businesses like Ping An.
Of the Top 20 Risers, the brands that increased most in value, six came from technology and six from principally online retail. These brands, and others like them, that helped people integrate their online and offline realities during an abnormal crisis period, are well-positioned to thrive as the personal and work worlds emerge into a new normal.
With value increases from 29 percent to 47 percent, these brands include Instagram, Netflix, LinkedIn, and Adobe. Three of the Top Risers that facilitated at-home shopping and working—Amazon, Alibaba, and Microsoft—disproportionately drove value with increases of 32 percent, 16 percent, and 30 percent, respectively.
Five of the Top 20 Risers were Chinese retail or technology-related brands, experienced in the use of data and digitization to achieve extreme convenience and personalization, including—along with Alibaba—Meituan, JD, and Tencent. With a 58 percent value increase, Moutai, the Chinese alcohol brand, led the Global Top 100 in percentage value gain.
The pandemic was a seismic event that restrained the growth of brand value and deflected attention from some trends and cultural shifts, especially concern over health and wellness and sustainability, which had factored into brand planning and activities across categories.
Every major car brand planned to introduce extensive ranges of electric vehicles. Beverage and fast food brand leaders committed to expansive packaging recycling programs. Apparel brands added services to repair and recycle merchandise and embraced a wider definition of diversity with clothing ranges that were gender fluid or accommodated people with physical disabilities.
Individual expression supplanted limited ideals of beauty in personal care. The desire for products crafted with sustainable materials and presented with responsible packaging made sustainability the new luxury. Energy brands invested in renewables in a long-term effort to wean themselves away from fossil fuels.
Having invested in these transformations, the open question for brands was whether efforts to defibrillate the economy back to life would require retreating, at least temporarily, from some of these commitments. That decision depends on the will of stakeholders—consumers, employees, as well as shareholders.
If there is any clarity, it is this: People are looking for leadership and a modicum of certainty. They will look everywhere to fill that need, to governments, NGOs, fellow citizens—and to brands. Brands will still need to communicate all the functional and emotional benefits that give people the associations needed to select one brand over another. People will still ask what brands make my life better and what brands can I trust? But they may scrutinize the answers much more profoundly.
Global Top 100 reaches $5 trillion
The BrandZ™ Top 100 Most Valuable Global Brands recorded a steady increase in value of 6 percent, compared with a 7 percent increase a year ago, adding over $275 billion in value to reach almost $5 trillion in total value, despite the economic toll of the Corona-19 pandemic.