Bernard Lee

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.

Press release   •   Jun 11, 2019 09:52 +08

- 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
2018
Brand Sector Brand Value 2019 (USDm) Brand Rating 2019 Brand Value/ Enterprise Value Brand Value 2018 (USDm) Brand Rating 2018
1 1 Telkom Indonesia Telecoms 4,615 AAA 17% 5,168 AAA
2 3 BRI Banks 3,268 AAA 13% 3,164 AAA-
3 2 Sampoerna Tobacco 3,220 AA- 18% 3,460 AA-
4 6 Pertamina Oil & Gas 2,893 AAA- 4% 2,028 AA-
5 4 BCA Banks 2,644 AAA+ 7% 2,349 AAA
6 5 Bank Mandiri Banks 2,558 AAA 13% 2,229 AAA-
7 7 Gudang Garam Tobacco 2,404 A+ 26% 1,907 AA-
8 8 BNI Banks 1,555 AAA 17% 1,296 AAA-
9 10 Dji Sam Soe Tobacco 779 AA- 16% 630 A
10 13 U Mild Tobacco 684 AA 24% 573 AA-


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.

Tele-tales

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
11 New PLN 653 AA- 2%
12 14 Garuda Indonesia 607 AA- 31% 495 AA+
13 11 Indomie 574 AA+ 45% 627 AA+
14 12 XL 563 AA+ 18% 602 AA+
15 9 Indosat Ooredoo 486 A+ 20% 741 AA-
16 18 Astra International 429 AA+ 2% 382 AA+
17 15 Bank Danamon 426 AA 9% 490 AA
18 16 PP (Persero) - Pembangunan Perumahan 376 AA 31% 425 AA-
19 31 Bank BTN 373 AA+ 25% 225 AA-
20 20 Waskita Karya 362 AA 8% 331 AA
21 17 Semen Indonesia 359 AA+ 9% 412 AA+
22 21 CIMB Niaga 358 AA+ 25% 321 AA
23 23 Roma 356 AA+ 29% 317 AA+
24 19 Matahari Department Store 320 AA+ 32% 360 AA+
25 25 PGN 307 AA 5% 277 AA
26 22 Bimoli 291 AA+ 44% 320 AA
27 24 Panin Bank 274 AA 16% 283 AA-
28 27 Jasa Marga 255 AAA- 6% 235 AA+
29 28 Beng-Beng 250 AA+ 29% 232 AA+
30 39 Bank OCBC NISP 239 AA- 18% 170 A
31 35 APP Sinarmas 233 A+ 4% 179 AA-
32 32 BTPN 225 AA 16% 214 A
33 26 Indofood 223 AA 4% 245 AA
34 46 Medco Energi 213 AA 6% 143 AA
35 34 Kopiko 192 AA+ 26% 180 AA+
36 29 Surya Citra Media 186 AA+ 11% 230 AA+
37 30 Indocement 177 AA- 5% 229 AA
38 51 BJB 169 AA 13% 132 A
39 48 Bank Mega 164 AA 7% 134 AA-
40 38 Gajah Tunggal 163 AA- 27% 171 AA
41 36 Media Nusantara Citra 162 AA- 19% 175 AA-
42 50 Adaro Energy 160 A+ 4% 133 A+
43 40 Adira Finance 157 A+ 29% 168 A+
44 33 Tiphone 155 A- 23% 189 A-
45 44 Adhi Karya 154 AA 24% 149 AA-
46 42 AKR Corporindo 151 A+ 10% 155 A+
47 49 Chandra Asri Petrochemical 146 AA- 3% 134 AA-
48 47 Alfa Mart 141 AA+ 5% 135 AA
49 43 Lippo Karawaci 135 A+ 9% 150 AA-
50 54 Mayora Indah 125 AA 3% 116 AA
51 41 MPM 108 AA- 40% 160 A+
52 59 Bank Permata 107 AA- 9% 99 A+
53 45 Bumi Serpong Damai 107 A+ 4% 148 A+
54 63 United Tractors 104 AA- 1% 86 AA-
55 52 Bir Bintang 103 A+ 39% 129 A+
56 37 Blue Bird 101 AA+ 17% 173 AAA-
57 53 LinkNet 101 AA+ 12% 120 AA+
58 57 Kalbe Farma 99 A+ 2% 108 AA-
59 58 Bank Bukopin 99 AA- 38% 103 AA-
60 61 Torabika 96 AA+ 29% 91 AAA-
61 68 Indika Energy 93 A+ 5% 77 A+
62 64 Ramayana 90 AA 26% 84 AA
63 70 BFI 84 AA 11% 76 AA-
64 55 ANTV (by mdia) 83 AA- 19% 112 A-
65 60 Sinar Mas Multiartha 83 A+ 2% 94 A
66 69 Bank Mayapada 82 AA- 3% 77 A
67 77 Bank Jatim 79 AA 11% 64 A
68 56 Hypermart 75 AA- 49% 108 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+
72 67 Smartfren 71 AA- 5% 79 AA
73 74 Astra Agro Lestari 70 AA 4% 67 AA-
74 65 Citra Marga Nusaphala Persada 70 A 18% 80 A+
75 73 Charoen Pokphand 70 AA- 1% 67 AA-
76 76 Better 69 AA- 22% 64 AA-
77 78 Kis 68 AA 24% 64 AA
78 84 Erajaya 68 A 11% 52 A-
79 72 Tunas Ridean 67 A 14% 67 A
80 71 Enseval 66 A 24% 75 A-
81 80 WIKA BETON 63 AA 21% 59 AA-
82 81 Japfa 63 AA 3% 59 AA
83 87 Smart (Sinar Mas Agro Res & Tech) 58 AA- 4% 50 AA-
84 75 Sarimi 58 AA 41% 65 AA
85 79 Supermi 57 AA+ 42% 63 AA
86 83 Multipolar 54 A 15% 53 A+
87 82 Tower Bersama 53 AA 2% 53 AA-
88 88 Danisa 51 AA 24% 48 AA
89 86 CSA 51 A 19% 50 A+
90 90 Mitra Keluarga 44 AA 3% 46 AA
91 89 Panin Financial 40 A 7% 47 A
92 New Bayan Resources 40 A+ 1%
93 85 Siloam Hospital 40 A+ 9% 51 A+
94 95 Bumi Resources 39 A+ 1% 33 AA-
95 91 Sawit Sumbermas 39 AA 4% 44 AA
96 93 Tempo ScanPacific 37 A 10% 36 A-
97 92 MNC Investama 37 AA- 2% 43 A+
98 94 Kimia Farma 35 A+ 3% 34 A+
99 98 Tjiwi Kimia 35 AA- 1% 32 A+
100 96 Popmie 29 AA 41% 33 AA+

ENDS

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.

Methodology

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

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.

Approach

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:

  1. 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.
  2. 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.
  3. 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%.
  4. Determine brand specific revenues estimating a proportion of parent company revenues attributable to a specific brand.
  5. Determine forecast brand specific revenues using a function of historic revenues, equity analyst forecasts and economic growth rates.
  6. Apply the royalty rate to the forecast revenues to derive brand revenues.
  7. Brand revenues are discounted post tax to a net present value which equals the brand value.