Amazon Overtakes Google, Apple As World’s Most Valuable Brand
It’s another great year for big tech brands, as Amazon overtakes Google and Apple as the world’s most valuable brand according to the latest Brand Finance Global 500 rankings – perhaps not entirely surprising, given its approximately US$150 billion valuation, making Jeff Bezos the world’s richest person. And with Apple, Google, Samsung and Facebook taking up the rest of the top five in the rankings tech is on a roll.
Brand Finance noted in the report that the US$13.7 billion (HK$107 billion) Amazon takeover of Whole Foods boosted the brand’s value due to a strong entrance into the brick-and-mortar retail space. This is further beefed up by the recent launch of Amazon Go – a cashier-less supermarket that recently opened in Seattle.
David Haigh, CEO of Brand Finance, commented: “The strength and value of the Amazon brand gives it stakeholder permission to extend relentlessly into new sectors and geographies. All evidence suggests that the amazing Amazon brand is going to continue growing indefinitely and exponentially.”
Perhaps more surprising is the rise of Chinese brands on the global list – six Chinese companies made it into the top 20, with a large number of slightly smaller Chinese players taking up spots in the top 50. In the top 20, the rankings list ICBC, China Construction Bank, Alibaba, China Mobile and State Grid.
|Rank (last year)||Brand||Brand Value 2018 ($bn)||Brand value % change (YoY)|
|11 (14)||China Construction Bank||56,789||37%|
|13 (11)||China Mobile||53,226||14%|
|14 (13)||Wells Fargo||44,098||6%|
|18 (28)||Bank of China||41,750||34%|
|19 (new)||State Grid||40,944||–|
|20 (15)||NTT Group||40,872||1%|
Explaining Google’s drop from first place last year, to third this year, the report explains that “Google’s online ads generated more traffic than expected as aggregated paid clicks rose by 47% in Q3 2017, boosting revenues. However, to compete with the world’s most valuable brands, presenting a solid performance is not always enough.” It goes on to say that like Apple, the brand’s full potential is constrained by its focus on particular sectors.
Speaking of Apple, the report also outlined that while it has maintained its second place this year, “its future looks bleak. Apple has failed to diversify and grow over-dependent on sales of its flagship iPhones, responsible for two-thirds of revenue. Poor Q4 2017 sales of iPhone X at only 29 million handsets fell short of expectations, and the model is predicted to be discontinued later this year.”
The brand value in the above list was calculated using the Royalty Relief approach, the report notes, which involves “estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a licensor would achieve by licensing the brand in the open market.”