05/02/2018 05:26 AST
Etisalat, the UAE's leading telecom provider, has been named the Middle East's most valuable brand for the first time, according to the latest Brand Finance Global 500 report.
The Abu Dhabi-based telecom operator has turned the dial up with a 40 per cent increase in its brand value, cementing its place as a strategic enabler in the UAE's digital transformation, said a statement.
The key growth drivers behind the $7.7 billion brand value include the launch of Etisalat's popular "Smiles" loyalty programme alongside the user-friendly app. Additionally, Etisalat has amplified the rollout of its smart "Customer Experience Centres" and renewed support for its global football sponsorships with further focus on its partnership with Manchester City Football Club.
Andrew Campbell, managing director of Brand Finance Middle East, commented: "The UAE's focus on digital innovation has helped support Etisalat brand's success and paved the way for future growth ahead of Expo 2020. With its stated strategy of 'Driving the Digital Future', Etisalat has adapted to a new competitive marketplace dominated by the rise of tech giants".
Amazon is the world's most valuable brand, ahead of Apple and Google, according to the report. The e-commerce giant's brand value increased by 42 per cent year on year to a whopping $150.8 billion.
Since the brand's humble beginnings as an online bookstore, Amazon has become the world's largest internet business by both market capitalisation and revenue. It is no longer just an online retailer, but also a provider of cloud infrastructure and a producer of electronics. Now, it is moving beyond the digital space, as last year's takeover of Whole Foods for $13.7 billion gave the brand a foothold in the realm of bricks and mortar. Amazon is also present in shipping, music and video streaming, alongside industry speculation on an impending bank acquisition in 2018.
David Haigh, CEO of Brand Finance, commented: "Jeff Bezos once said that 'brands are more important online than they are in the physical world'. He has proved himself right by choosing the name Amazon, known as the largest, most powerful river in the world, as 23 years later the Amazon brand carries all before it as an unstoppable force. The strength and value of the Amazon brand give 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."
Although Apple defended its 2nd place in the ranking, with brand value rebounding to $146.3 billion after the 27 per cent decline last year, its future looks bleak. Apple has failed to diversify and grown 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. With the advent of emerging world brands like Huawei, Apple's increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth, the report said.
Google has dropped from the first to third position, recording a relatively slow brand value growth of 10 per cent to $120.9 billion. Google's online ads generated more traffic than expected as aggregated paid clicks rose by 47 per cent in Q3 2017, boosting revenues. However, to compete with the world's most valuable brands, presenting a solid performance is not always enough. Google is a champion in internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand. Google's investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon's new ventures. Nevertheless, the acquisition of 2,000 HTC smartphone staffers for $1.1 billion indicates a shift to a more expansive approach, it said.
Digital era
For the first time since the inception of the Brand Finance Global 500 study, technology brands claim all top five places in the league table. Samsung (4th, $92.3 billion) and Facebook (5th, $89.7 billion) both recorded impressive year-on-year brand value growth of 39 per cent and 45 per cent respectively, overtaking AT&T (6th, $82.4 billion). Change at the top is reflective of a wider global trend as the technology sector accounts for more than twice as much brand value as telecoms.
The dominance of digital is set to grow even more in the coming years as other brands make their way up the Global 500. Google-owned YouTube more than doubled its brand value to $25.9 billion, jumping 70 places to 42nd. Chinese technology brands, taking advantage of captive market conditions, can also boast high brand value growth, with Alibaba (12th), Tencent (21st), WeChat (49th), Baidu (57th), JD (65th), and NetEase (121st), going up by an average of 67 per cent year on year, the report said.
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