The majority of the brand value of the BrandZ Top 50 Most Valuable Indonesian Brands comes from just a handful of megabrands that are leaders in their field. For the third year running, more than 55 percent of the entire Top 50’s value is derived from just five brands, and three of these are banks.
This concentration of value at the top of the ranking – and within just one key business sector – is not unusual for fast-developing markets. The Top 5 brands in Indonesia this year are the bank BCA, telecom provider Telkomsel, A Mild cigarettes, and the banks BRI and Mandiri.
Property developers also feature heavily in the Indonesian Top 50, along with telecommunications networks and entertainment providers. This is a theme we see recurring is high-growth markets; infrastructure brands that are crucial to how an economy develops tend to perform strongly. At the same time, much-loved and frequently bought brands that play a small but important role in daily life also do well, and we see this year that noodle and cooking sauce brands appear in the Top 20, and skin care, soap and shampoo brands feature heavily in the Top 50. Together, the brands in the ranking provide a slice of life in modern-day Indonesia: growth and development, supported by pride in a rich local heritage.
What is unique in Indonesia is the prevalence of tobacco brands in the Top 50. This is not just because this is a market with a high proportion of smokers, although this is the case, with more than half of adults smoking regularly. It is also one of the most liberal markets when it comes to cigarette advertising, even as restrictions on what can be shown and at what times of day become tighter to try to reduce rates of smoking.
The Top 5 brands account for 57 percent of the total value of the Indonesian BrandZ Top 50 in 2017.
Categories and brands
Telecommunications providers are operating in a hot market in Indonesia, with demand for mobile phones and internet connections still growing apace. At the same time, early adopters who have been connected for some time are looking for better deals and more options. There are three telecommunications providers in the Indonesian Top 50, with market leader Telkomsel taking second place overall.
The strong showing by property development and management brands in the Indonesian Top 50 reflects the rapid development of cities in this market, and rising demand not just for new homes but for specific kinds of homes, with shopping, education and leisure facilities nearby. Seven real estate brands make the Top 50 this year.
Entertainment brands now account for four of the Top 50 spots, and the TV station RCTI has been among the fastest-rising brands in 2017. Indovision and SCTV have fared less well, but Indosiar, famous for its local talent quests, is a new arrival in the rankings this year, entering at number 43.
Technology brands do not feature in the Indonesian Top 50. This is because the availability and widespread use of global tech brands means there has been little need for home-grown rivals to emerge. There are strong e-commerce brands in Indonesia, but – as is also the case in India – for searching and social media, consumers here are satisfied with the likes of Google, Facebook and Twitter.
WAYS TO WIN
Businesses that nurture the value of their brand in the long term tend to outperform those that don’t. Measurement of brands both in Indonesia and in markets around the world shows that, in tough times, strong brands tend to be more resistant to a downturn and, when market conditions pick up, they recover faster than the competition.
One of the key ingredients in any strong brand is meaningful difference. Being different to other brands in a given category is part of this, but that difference must be relevant both to the brand itself and make an emotional connection with the consumer. Meaningful difference helps a brand generate value that goes beyond its financial strength. Brands that have strong meaningful difference don’t just make good products or provide great value for money – they do something that resonates with consumers’ lives, with a mission that goes beyond the product they sell or even the category in which they operate.
In Indonesia, FMCG brands tend to be strong in this area, meeting a functional need but also making people feel great. Of the 10 Indonesian brands with the closest consumer connection, six are FMCG brands. The 10 most meaningfully different brands in the Indonesian Top 50 are: Indomie, SariWangi, Pepsodent, Garuda, Aqua, Rinso, Bango, Telkomsel, Matahari and BCA.
Over the past three years, the brands that have rated highly for meaningful difference have grown their brand value by 10 percent, while those with lower-than-average scores for meaningful difference have actually lost 3 percent of their brand value.
Theory in Action
Bango is one of the fastest-growing Unilever brands in the BrandZ Indonesian Top 50, and has increased its brand value by 9 percent in the past 12 months. It creates meaningful difference by focusing in its communications on the quality of its ingredients, which contribute to the best-tasting traditional Indonesian dishes. Bango tells the story of its farmers and the great care they take in nurturing their soybean crops, and celebrates the diversity of Indonesian food and the joy that people share when they enjoy it.