The brands which spend the bucks
What does a brand valued at USD 9.4 billion do? It turns around and in 12 months, raises it valuation by 33% to USD 12.577. HDFC has once again emerged on the top of annual BrandZ top 50 most valuable Indian brands ranking announced by WPP and Millward Brown.
18 Sep 2015 | 3162 Views | By Tanvi Parekh
The 33% increase in HDFC Bank’s brand value was backed by rapid rural expansion, increase in revenue, profit and cost optimisation.
The brand stories in the country, both multinational and of Indian origin have a similar success story to share. According to the WPP report, the total value of India's strongest brands has risen by a third (33%) over the last year. India's top 50 brands are now worth USD 92.2bn, up from just under USD 70bn in 2014.
The list is dominated by banks and financial services companies. Of the 50 brands, 13 are banks and financial services firms, 12 home and personal care brands and 11 are food and beverage brands. The 13 banks and financial services firms account for 41% of the total brand value.
However, the change in sector brand value has put bank and financial services and home and personal care close to each other. The sector-wise change in growth value is as follows: Financial services (49%), Home and personal care (32%), Auto aftermarket (28%), Automobiles (27%), Telecom providers (21%), and Food and drink (10%).
Market Characteristics
The top 10 gainers on the list are from diverse sectors. The names and the per cent change in the brand value on the list are: Union Bank of India (72%), Lakme (69%), Punjab National Bank (61%), Maruti Suzuki (54%), Lifebouy (48%), IndusInd Bank (46%), ICICI Bank (45%), HDFC Bank (45%), Colgate (44%), and Berger (44%).
The report states: an analysis of the BrandZ Top 100 Most Valuable Global Brands over the past 10 years revealed a group of success drivers, including brand purpose, brand proposition, innovation, and love. These drivers also present challenges to the future success of brands in India. “The 2015 study shows that India is a market of great opportunities where consumers are empowered, and this is increasingly reflected in their brand choices,” said David Roth, CEO of WPP unit The Store.
“India is distinct in many ways from other fast-growing markets—strategies that worked elsewhere will not work in India,” Roth added. “Any brand intending to compete in India must gain deep insights into its nuances—such as the need to modernize while respecting the past, and the desire to remain fundamentally Indian.”
Media Spends
The total media spending is expected to rise by 12.6 percent in 2015 to about INR 490.5 billion (USD 8.7 billion), following a comparable increase in 2014. The digital spending increased an estimated 35 percent in 2014, and is predicted to expand by 37 percent this year. Despite the sharp growth rate, digital still accounts for relatively low market share, projected to be just below 10 percent in 2015. In contrast, TV is expected to reach almost 46 percent market share in 2015.
In the entire pie, print medium - outdoor and retail (5.3%), magazine (1.5%), and newspaper (32.9%) - constitutes 39.7%. According to GroupM, part of WPP, the rise in digital, cinema and TV spending came primarily at the expense of print, especially magazines, with spending expected to decline four percent in 2015 after falling five percent last year. However, newspapers, and out-of-home should rise more modestly.
Consumption characteristics
The valuation increase is backed by strong and effective reach out to the consumers, getting them to trust the brand. The report states that 35% consumers in India say that they trust brands.
According to the report, the changing attitudes of Indian consumers will impact the brands. Indians feel that their choices can make a difference, and their choices about personal health and healthy foods, for example, will impact brands.
an analysis by The Futures Company places India among countries with consumers that are both willing and able to spend.
The study said brand leaders in two of India’s fastest-growing and most disruptive categories— e-commerce and mobile handsets—are expected to soon appear in the list of BrandZ Top 50 Most Valuable Indian Brands.
The study is part of the BrandZ series of brand valuations reports that include the Global Top 100, Indonesia Top 50, Latin America Top 50 and China Top 100 (to be released in February 2016).