Growth of the World’s Most Valuable Brands Slows – But Their Collective Value Still Hits $5 Trillion

July 24, 2020

This article is included in these additional categories: Brand Metrics | Brand-Related | Industries | Retail & E-Commerce | Technology | Top Brands

BrandZ Top 100 Most Valuable Brands Collective Value 2006 2020 Jul2020In its latest Top 100 Most Valuable Global Brands 2020 report, BrandZ shows that the value of the world’s most valuable brands continues to grow – albeit more slowly than in recent years. The report indicates that the value of the top 100 brands grew by 6% in the past year (compared to 7% in 2019 and 22% in 2018), adding $277 billion to reach a total of $5 trillion this year.

While growth in top brands’ value appears to be slowing, it’s worth noting that this year’s figure represents a 150% increase over 2010, when the collective value of the top 100 brands was $2 trillion.

Retail is ahead of the pack in category growth over the past year, with Retail brands in the top 100 growing in value by 21%. Retail regains its place as the fastest-growing category after being pushed out of the position last year by the Luxury category, which only saw 3% growth this year (compared to 29% in 2019). Retail brands such as Amazon (+32%), Alibaba Group (+16%), Costco (+35%) and Target (+27%) helped to drive the category’s growth.

Although retailers are split on whether the COVID-19 pandemic will have a positive impact on their e-commerce business, the report points out that brands such as Amazon, Alibaba Group, JD, Target, and Walmart, the latter two of which have made major investments in digitization and online-offline integration, are the ones that helped drive growth in Retail.

Twelve of the top 20 retail companies are from the US. However, the number of US brands to make it into the overall top 100 list dropped from 54 last year to 51 this year – 8 of which were in the top 10. The fastest-growing brands from the US include Instagram (+47%), Costco (+35%) and Netflix (+34%).

On the other hand, more Chinese brands made it to the list, with 17 in the top 100 (up from 15 last year) and two brands, Alibaba Group (#6) and Tencent (#7), making it into the top 10.

Amazon Holds on to the Top Spot

After making it to the top of the list last year, Amazon retains the spot again. The e-commerce giant’s brand value stands at $415.9 billion (up 32% over 2019), almost one-tenth of the top 100 brands’ total.

Tech brands Apple (#2; $352.2 billion), Microsoft (#3; $326.5 billion) and Google (#4; $323.6 billion) follow Amazon, with Visa ($186.8 billion) rounding out the top 5.

And, while 8 of the top 10 brands grew in value, Facebook (-7%) and McDonald’s (-1%) suffered a decline. Facebook dropped 2 positions to #8 while McDonald’s maintained its rank at #10.

Five Newcomers

There were 5 brands new to the list this year, representing 5 different categories. China’s short-form video app, TikTok, came in at #79 and was the highest-ranked of the new brands. This brand has gained popularity in the US among adults and kids alike.

US brands United Healthcare (#86) and Pepsi (#99) joined the list, as did China’s Bank of China (#97) and France’s Lancôme (#98).

TikTok Leads in “Brand Contribution”

The methodology for calculating brand value (at least in BrandZ’s case) rests on several measures, one of which is the extent to which the brand alone – independently of market and financial factors – drives purchase volume and is able to command a brand premium.

This particular component is called “Brand Contribution” – and it’s led by TikTok.

The full BrandZ report can be viewed here.

About the Data: BrandZ arrives at its brand value by multiplying the brand’s financial value (the amount of corporate earnings attributed to a particular brand) by brand contribution (a percentage of financial value). Brand value is defined as “the dollar amount a brand contributes to the overall value of a corporation.”

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