Spotlight on opportunities for brands
Indonesia top 50 together worth US$65 billion
The combined value of the BrandZ™ Top 50 Most Valuable Indonesian Brands hit US$64.6 billion, not far behind the total value of the Top 50 brands in India in 2014 (US$69.6 billion), but just one-seventh of the value of the Most Valuable 50 Chinese brands this year.
Brand equity is strong
Indonesian brands are proving effective at creating a consumer predisposition to purchase – on a par with the most valuable Chinese brands and performing better in this area than many leading global brands. In the BrandZ™ Power Index, a brand equity measurement, the Indonesian Top 50 scored 210, compared with 212 in China, 222 in India and 161 in Brazil; the average of all brands worldwide is 100, so a score of 150 indicates that a brand is performing 50 percent better than the average brand.
Banks and tobacco are biggest performers
Financial services brands occupy 24 percent of the Top 50 brands in Indonesia by number of brands, and banks take four of the top 10 places in the rankings, including first and second. Tobacco brands are unique in Indonesia across the BrandZ™ rankings in having such a strong presence among leading brands, with six tobacco brands featuring in the top 12, and seven making the Top 50.
BCA is Indonesia’s most valuable brand
BCA, or Bank Central Asia, tops the inaugural BrandZ™ Indonesia rankings, having built its reputation over more than 50 years in this market, during which time it has established a network of more than 1,000 branches around the country. Its innovations in the provision of card services have helped make it one of the most widely used consumer banks in the country. The bank’s private-label BCA card is now widely accepted in Singapore. BCA’s brand value places it just outside the Global Top 100 Most Valuable Brands; the bank is on track to become the first Indonesian brand to make the global ranking.
Mega brands dominate
The Top 5 brands account for 57 percent of the total value of the BrandZ™ Indonesia Top 50, or US$37 billion. This concentration of value at the top of the ranking is similar to India, China and Brazil. In contrast, the Top 5 brands in the Global Top 50 account for only about a quarter of the ranking’s total value.
Retailers prove solid performers
Four retail brands feature in the Indonesian Top 50; this is not unusual in itself, but what is interesting about the retailers that make the rankings here is that they are all bricks-and-mortar stores, whether department stores as in the case of Matahari Department Store, or grocery outlets such as Alfa, Ace and Hypermart. However the top performing retail brands globally, and in China, tend to be those focused on e-commerce. The rate of e-commerce is growing in Indonesia, as smartphone penetration and the use of credit and debit cards grows, but is still nascent by world standards.
Fast-moving consumer goods well represented
Fast-moving consumer goods brands make up 28 percent of brands in the BrandZ™ Indonesia Top 50 – a very high proportion when compared to other countries’ rankings. Well loved and highly successful homegrown noodle, water and tea brands feature strongly in the Top 50. Brand strength for names such as Indomie, Pepsodent, SariWangi, and Bimoli has helped these brands punch above their financial weight in the rankings. The personal care category’s success reflects investment by multinational corporations, which have introduced and developed their brands in Indonesia.
Category leaders prove premium value
Leading Indonesian brands have strength enabling them to command a premium price that is well above that seen among leading brands in other markets. The BrandZ™ Premium Index, one of several measures that count towards brand value, is 120 among the Top 50 brands in Indonesia, which compares to 111 in the Global Top 50, 104 in India’s Top 50, and 109 for the leading 50 brands in China. The average among all brands worldwide is 100. This does not necessarily mean that the top brands are more expensive than the competition, but it does mean consumers see them as providing extra value that is worth paying for. In categories where there is one dominant player, this premium factor is often seen; in Indonesia, it applies to brands such as Matahari Department Store, Rinso, and Garuda Indonesia.
Strong and different – but lacking love and innovation
Indonesia’s most valuable brands are doing as good a job as the strongest global brands when it comes to being meaningfully different, and salient; where they lag is in being lovable and innovative. The Top 50 Global Brands average an innovation score among consumers of 120, while Indonesia’s Top 50 manage just 103; likewise, global brands achieve 131 on the love scale, while Indonesia’s Top 50 only get to 108. The importance of these measures to a brand’s overall value is clear when the Top 50 is split in half and ranked according to their innovation score. The top half then are collectively worth US$51.9 billion, while the bottom half, those seen as less innovative, are valued at just US$12.7 billion.
Top 5 learnings for marketers
1. Make branding a priority and reap the rewards
Now is the time to focus on branding; Indonesian consumers are aware of and engaged with more brands than ever. They talk about brands and recommend the ones they love. The BrandZ™ ranking shows that businesses in Indonesia that nurture the power of their brands are four times more valuable than those that don’t. CEOs should see a clearly articulated and communicated brand mission as essential to growth.
2. Safety in numbers – the value of trust
The value of being a trusted brand is underlined by analysis of the Indonesia Top 50. Among banking brands, for instance, almost 90 percent of the brand value in the ranking is concentrated at the top, among just three brands. These three banks far outperform other banks on measures of fairness, responsibility, and trust in the eyes of consumers. Economic crises have shaken this market, and wary consumers seek out brands they feel are safe. Emphasize scale, a long history, and popularity to foster consumer trust.
3. Emotional connections take brands to new heights
Brands that focus on making meaningful connections with consumers can punch above their financial weight in the BrandZ™ rankings. These connections must be about more than simply being well-known or delivering quality and value. They must be built on emotion, and the most successful brands deliver meaning not just through their products but through their communications, creating emotional, memorable links that connect with consumers’ lives.
4. Local relevance helps consumers straddle two worlds
Local brands dominate the Top 50, and Indonesians take tremendous pride in home-grown success stories. But the BrandZ™ rankings also show that multinational brands can succeed in this market by tailoring their attributes to the Indonesian market - not just with a local look, but by making a locally relevant connection with consumers. Multinational brands can help consumers resolve the tension they feel between wanting to maintain traditional values and their desire to be worldly and modern.
5. Innovate and prosper
Innovation in digital services and digital media investment drives up a brand’s value. The Top 5 most valuable brands in the Indonesia ranking invest significantly more in digital compared to the lowest-ranked brands. Technology can make service brands more accessible, and digital communication in this mobile-driven market is essential. Brands should exploit multi-screen behavior by consumers to build layers of meaning – but should still remember the value of TV, which is immensely popular and remains an effective driver of reach.