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STC named KSA's most valuable brand at $6.6 billion
RIYADH — The first BrandZ brand valuation ranking of Saudi Arabian brands by WPP and global research specialists Kantar Millward Brown, in partnership with Prince Mohammad bin Salman College of Business and Entrepreneurship (MBSC), showed that Saudi Telecom Company (STC) is the most valuable brand in the Kingdom worth $6.6 billion. In the first ranking of its kind in Saudi Arabia, the findings show that the Top 20 brands are worth a combined brand value of $37 billion.
The report is the first edition of a regular BrandZ study to track the rapidly evolving environment for brands in Saudi Arabia and chart the changing value of the country’s most valuable brands.
BrandZ brand valuation studies are the largest brand-building platform worldwide and the only consumer-focused source of brand equity knowledge and insight. They use a unique and authoritative brand valuation methodology which analyses corporate financial data and strips away everything that does not pertain to the branded business, followed by in-depth consumer research to assess consumer attitudes towards brands.
David Roth, CEO EMEA & Asia, The Store, WPP, said: “As Saudi Arabia moves away from its reliance on oil by developing a thriving private sector and fostering entrepreneurship, domestic brand value provides a tangible indication of economic growth and diversification.
“Our pioneering study ranks the country’s most accomplished brands, analyses their success, and identifies the key forces that are driving the growth of brands in Saudi Arabia.”
“By fostering a solid understanding of their brand, and building the skills to develop and deliver that brand consistently across their entire business, Saudi companies can secure a stronger share of regional and global markets,” said Fahd Al Rasheed, Vice Chairman of the Board of Trustees of MBSC.
“The power of an independent assessment to help companies better evaluate their brand – its value, positioning, strengths and weaknesses – cannot be overstated. The BrandZ Top 20 Most Valuable Saudi Brands 2017 report encourages them to do exactly that.”
Brands that were founded in Saudi Arabia dominate both the Top 20 ranking and the local market. Having expanded to build a presence in markets across the Middle East and North Africa, STC’s brand value of $6.6 billion accounts for 18 percent of the total value of the Saudi Top 20 brands.
The top two brands in the ranking, STC and Al Rajhi Bank, account for one third of the total value of the Top 20. Jabal Omar, Almarai and National Commercial Bank (NCB) complete the top five brands in the Kingdom which between them holds two thirds of the Top 20 brands’ combined brand value.
This concentration of value at the top of the ranking is also seen in similar BrandZ studies in China, India, Indonesia and Brazil. The exception to this pattern is the Global BrandZ valuation ranking in which the value of brands is more evenly distributed throughout the rankings.
Of the 334 Saudi brands that were measured in the compilation of the ranking, 69 percent were local, 26 percent were global brands with a presence in Saudi Arabia, and the remaining 5 percent were regional brands.
Almost one third of the 334 brands measured by BrandZ are “Clean Slate” brands – brands that consumers often don’t know exist, or if they do, they are not well defined in people’s minds.
The presence of a high proportion of local brands is often seen in markets that are just beginning to open up. BrandZ™ data shows that brands, regardless of their origin, can, however, build strength and value in Saudi Arabia by being meaningfully different to the competition and by achieving fame and widespread distribution.
Alongside the brand value ranking, Kantar Millward Brown research and analysis also identifies some key insights to help brands grow in Saudi Arabia. Included among the key takeaways are:
• Be aware of regional variation in attitudes. Although Saudi Arabia is the dominant economy in the Middle East with double the population of the rest of the GCC combined and a GDP double that of its five GCC partners, there is no “one size fits all” for Saudi Arabia. Consumers differ significantly in their tastes and expectations depending on where in Saudi Arabia they live.
• The population is young, but wealth is with the old. The median age of the Saudi population is 27 and brands are usually drawn to the younger, tech-savvy and generally outward-looking sector of the Saudi consumer audience. But much of the country’s wealth remains with this younger generation’s parents and grandparents. This creates a curious dynamic for brands; older consumers have more money to spend, but the big spenders of the future are looking at forming brand loyalties now.
• Make promises and nurture trust. Trust, reliability and authenticity are essential qualities for a brand to succeed in Saudi Arabia. Trust is earned over a long period of time, and, if lost, is almost impossible to recover. A bad experience is not just remembered but also shared and, in a society where the views of family and friends matter immensely, this is especially important.
• Offer value, enable smart choices. Consumer confidence has dropped five percentage points in the past year as economic growth has dipped to its lowest level in five years. While GDP growth is forecast to rebound in 2017, consumers have adjusted their spending habits and are rethinking the categories, products and brands they buy. Consumers are still looking for quality but this is tempered by people looking to buy smarter and to get better value for money.
Piotr Chodakowski, Country Manager, Kantar Millward Brown, said: “BrandZ findings indicate that Saudi consumers are sophisticated and selective, and they have a readiness to pay a premium but also seek value. The reality is that many Saudi businesses are currently underinvesting in brand-building. The opportunity for these brands is to relaunch, reinvent or reposition themselves, and make it clear to consumers what they promise. They must make their proposition highly relevant to their target audience, and build brand visibility to reinforce awareness, build credibility and deliver sales.”
The brands that appear in this report are the most valuable in Saudi Arabia. They were selected for inclusion in the BrandZ Top 20 Most Valuable Saudi Arabian Brands 2017 based on the unique and objective BrandZ brand valuation methodology that combines extensive and ongoing consumer insights with rigorous financial analysis. BrandZ is the only brand valuation tool that peels away all of the financial and other components of brand value and gets to the core – how much brand alone contributes to corporate value.
© The Saudi Gazette 2017
