- Telkom Indonesia continues to dominate the #1 Most Valuable Indonesian Brand 2019 for consecutively 3 years in a row but their brand strength remains stagnant.
- U Mild returns to the Top 10 after dropping out in 2017.
- Hypermart leads as the highest contributing brand.
- PLN as the best new entrant just misses the top ten mark at #11.
- Total value of Top 100 Indonesian brands in 2019 has increased to US$39.3 billion, up 6% from US$37.0 billion in 2018.
- Telkom Indonesia retains the #1 Most Valuable Indonesia Brand for 2019 however its brand strength remains stagnant and the brand value drops.
- Bank BRI moves up to #2, dominating as the strongest bank brand by value in Indonesia.
- BCA is the strongest brand in Indonesia and the only brand with AAA+ rating. BCA also drop 1 spot, allowing Pertamina, the only oil & gas brand to get into the top 10.
-Indosat Ooredeoo drops out of the Top 10 with brand value decrease of 34%.
-Pertamina being the only oil & gas brands enter the Top 10 with brand value of US$2,893m with a surge of 43%.
Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test, evaluating which are the most powerful and valuable, publishing the Brand Finance Top 100 Indonesian Brands.
Indonesia’s Top 10 Most Valuable Brands
|Rank 2019||Rank |
|Brand||Sector||Brand Value 2019 (USDm)||Brand Rating 2019||Brand Value/ Enterprise Value||Brand Value 2018 (USDm)||Brand Rating 2018|
|4||6||Pertamina||Oil & Gas||2,893||AAA-||4%||2,028||AA-|
|9||10||Dji Sam Soe||Tobacco||779||AA-||16%||630||A|
In terms of brand value, Telkom Indonesia retains its #1 position in the brand Finance Top 100 Most Valuable Brands in 2019 for 3 consecutive years. Telecom sector has lost Indosat Ooredoo who drops out of the Top 10 spot this year, after staying on the Top 10 briefly. Telkom Indonesia also managed to retain the AAA brand strength rating even with a slight decrease in brand value of -11%.
Growing Big 4
The four largest Indonesian banks have been performing well for a number of years and in 2019 as BRI climbed to second, BCA fifth, Bank Mandiri in sixth and BNI maintaining at eight. All the banks have a marginal increase in brand value as compared to last year. The total value of the four Indonesian banks in the table grew marginally of approximately 10% to US$ 10 billion. Moreover, the brand strength of these banks has improved at least one level in terms of brand rating.
Telkom Indonesia and Indosat Ooredoo both seem to have significantly benefited from the high growth in mobile usage and should benefit further with penetration of smart phones gathering pace as Indonesia’s consumers are quick to embrace technological upgrades and adoption. With a fast growing younger population and increasing disposable incomes, brand building and brand stickiness in the telecom sector will be the key for companies to increase usage and penetration and win greater market share.
Bank BTN, recorded a brand value increase by 66% to US$1,489, growing at the highest comparing to the brands in the Indonesia top 100.
“Financial companies make up 33% of the top 100 value. As Indonesia further develops, we expect consolidation in the banking sector, so it will be interesting to see which brands remain. Banks who can digitalise and remain relevant will be the ones who will win.”
Samir Dixit, Manging Director of Brand Finance Asia Pacific highlighted that “While the Indonesian brands have grown, they will likely face strong headwinds ahead as they are losing out to some of the other brands in the region in terms of brand competitiveness and value growth”.
“It is the brand strength for most brands that still remains a concern and also a significant risk that the brands must recognise and work towards mitigating it” stressed Samir.
Samir Dixit further commented that “The rankings still remains very top heavy raising further concern as the top 10 are from just 4 sectors, contributing to over 63% of the total brand value. We would like to see a more diverse mix at the top and more significant value increase at the bottom which means other brands must start focussing on their value and brand strength.”
Samir Dixit challenged the Indonesian companies to be more brand-focussed and not sales and offers-driven. These while help sell in the short term but will absolutely destroy the long term competitiveness, value and the strength of the brand. Brand has to be a strategic agenda for the senior management and boards and must be managed like any other business asset and not just a legal trademark. AND IT ISNT AT THE MOMENT ”
It is teeth gritting to see that Telkom Indonesia is hanging with a thin line to stay on the Brand Finance Global 500 rankings in 2019 as the only Indonesian brand. Previously Sampoerna was also the other Indonesia brand which had made it to the list while in 2017. BRI and Gudang Garam are also strong potentials to enter the Global 500 in the near future.
The brand strength, measured by Brand Strength Index (‘BSI’), the average BSI of the Top 100 Most Valuable Indonesian Brands, has improved only marginally from 68.0 to 69.4 in 2019. The brands have remained stagnant in terms of their brand strength and while they may be doing well locally, they have been losing out to some of the key competitors in the region as they clearly lack competitiveness outside of Indonesian market.
This year, its noticed that the brand values are largely affected by uncontrollable external factors such as country economic outlook, risk free rate, currency exchange rate etc. In this case, Indonesian brands enjoyed the benefits of lower discount rate and better exchange rate to USD that pushed their brand values higher in 2018.
Indonesia’s Most Valuable Brands (11-100)
|Rank 2019||Rank 2018||Brand||Brand Value 2019||Brand Rating 2019||Brand Value/ Enterprise Value||Brand Value 2018||Brand Rating 2018|
|18||16||PP (Persero) - Pembangunan Perumahan||376||AA||31%||425||AA-|
|24||19||Matahari Department Store||320||AA+||32%||360||AA+|
|30||39||Bank OCBC NISP||239||AA-||18%||170||A|
|36||29||Surya Citra Media||186||AA+||11%||230||AA+|
|41||36||Media Nusantara Citra||162||AA-||19%||175||AA-|
|47||49||Chandra Asri Petrochemical||146||AA-||3%||134||AA-|
|53||45||Bumi Serpong Damai||107||A+||4%||148||A+|
|64||55||ANTV (by mdia)||83||AA-||19%||112||A-|
|65||60||Sinar Mas Multiartha||83||A+||2%||94||A|
|69||66||ITM (Indo Tambangraya Megah)||75||A+||5%||80||A+|
|70||62||MNC Sky Vision||74||AA-||19%||87||A+|
|71||New||Soekarno–Hatta International Airport||72||A+|
|73||74||Astra Agro Lestari||70||AA||4%||67||AA-|
|74||65||Citra Marga Nusaphala Persada||70||A||18%||80||A+|
|83||87||Smart (Sinar Mas Agro Res & Tech)||58||AA-||4%||50||AA-|
About Brand Finance
Brand Finance plc, the world's leading brand valuation consultancy, advises strongly branded organisations on maximising their brand value through effective management of their brands and intangible assets. Founded in 1996, Brand Finance has performed thousands of branded business, brand and intangible asset valuations worth trillions of dollars.
Its clients include international brand owners, tax authorities, Intellectual Property lawyers and investment banks. Its work is frequently peer-reviewed by the big four audit practices and its reports have been accepted by various regulatory bodies, including the UK Takeover Panel.
Brand Finance is headquartered in London and has a network of international offices in Amsterdam, Bangalore, Barcelona, Cape Town, Colombo, Dubai, Geneva, Helsinki, Hong Kong, Istanbul, Lisbon, Madrid, Moscow, New York, Paris, Sao Paulo, Sydney, Singapore, Toronto and Zagreb.
Definition of Brand
In the very broadest sense, a brand is the focus for all the expectations and opinions held by customers, staff and other stakeholders about an organisation and its products and services. However, when looking at brands as business assets that can be bought, sold and licensed, a more technical definition is required. Brand Finance helped to craft the internationally recognised standard on Brand Valuation, ISO 10668. That defines a brand as “a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos and designs, or a combination of these, intended to identify goods, services or entities, or a combination of these, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits/value.”
However, a brand makes a contribution to a company beyond that which can be sold to a third party. ‘Brand Contribution’ refers to the total economic benefit that a business derives from its brand, from volume and price premiums over generic products to cost savings over less well-branded competitors.
Brand Strength is the part of our analysis most directly and easily influenced by those responsible for marketing and brand management. In order to determine the strength of a brand we have developed the Brand Strength Index (BSI). We analyse marketing investment, brand equity (the goodwill accumulated with customers, staff and other stakeholders) and finally the impact of those on business performance. Following this analysis, each brand is assigned a BSI score out of 100, which is fed into the brand value calculation. Based on the score, each brand in the league table is assigned a rating between AAA+ and D in a format similar to a credit rating. AAA+ brands are exceptionally strong and well managed while a failing brand would be assigned a D grade.
Brand Finance calculates the values of the brands in its league tables using the ‘Royalty Relief approach’. This approach involves estimating the likely future sales that are attributable to a brand and calculating a royalty rate that would be charged for the use of the brand, i.e. what the owner would have to pay for the use of the brand—assuming it were not already owned.
The steps in this process are as follows:
- Calculate brand strength on a scale of 0 to 100 based on a number of attributes such as emotional connection, financial performance and sustainability, among others. This score is known as the Brand Strength Index.
- Determine the royalty rate range for the respective brand sectors. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database of license agreements and other online databases.
- Calculate royalty rate. The brand strength score is applied to the royalty rate range to arrive at a royalty rate. For example, if the royalty rate range in a brand’s sector is 0-5% and a brand has a brand strength score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
- Determine brand specific revenues estimating a proportion of parent company revenues attributable to a specific brand.
- Determine forecast brand specific revenues using a function of historic revenues, equity analyst forecasts and economic growth rates.
- Apply the royalty rate to the forecast revenues to derive brand revenues.
- Brand revenues are discounted post tax to a net present value which equals the brand value.