• Telstra remains Australia’s most valuable brand despite brand value dropping 7%
• Retail brands enjoy strong growth in face of online competition with Woolworths’ brand value up 23%
• Qantas soars to become Australia’s strongest brand with a score of 86.6 out of 100 and a AAA rating
Telstra remains Australia’s most valuable brand despite its brand value subsiding 7% to $14.7 billion, according to the latest report by Brand Finance.
Woolworths (brand value up 23% to $11.2 billion) and Coles (brand value up 31% to $11.0 billion) both jumped two places to 2nd and 3rd, respectively. The two Australian retail giants have grown their brand values strongly this year despite the threat of online competition from Amazon.
Telstra’s fall in brand value was primarily driven by a decrease in brand strength as the telco giant continues to face many challenger brands in its key service areas of mobile, internet and landline telecommunications. Despite this fall in brand strength, it remains Australia’s 5th strongest brand, and clearly continues as Australia’s dominant telecommunications carrier. On the other hand, Optus (brand value up 6% to $5.3 billion) increased its brand strength this year, overtaking Telstra to become the country’s strongest telecommunications brand, and Australia’s 4th strongest brand overall.
Mark Crowe, managing director of Brand Finance Australia, commented:
“Telstra remains Australia’s most valuable brand, with its key customer segments delivering high quality and reliable operations right across its entire portfolio of telecommunications services. However, the brand continues to face domestic challenges from a variety of competitors in its core services, putting downward pressure on its overall brand value. Looking ahead, management will need to ensure that they are able to leverage Telstra’s existing brand strength to ensure that the brand does not merely become a dumb pipe to carry smart services: this offers Telstra the opportunity to grow commercial revenue by extracting greater value from online supply chains.”
Qantas soars to become Australia’s strongest brand
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Alongside revenue forecasts, the brand strength index (BSI) is a crucial driver of brand value.
According to these criteria, Qantas (brand value up 45% to $3.8 billion) improved its BSI to 86.6, achieving a brand rating upgrade from AAA- to AAA to become Australia’s strongest brand.
Meanwhile, last year’s strongest brand, Commonwealth Bank, fell to seventh, with its brand rating shifting from AAA to AA+. This reflects the high-regard that Australians have for the Qantas brand as it continues to lead the Australian aviation industry, on both domestic and international routes.
“Qantas’ brand performance is quite exceptional given that enterprise value has decreased by 8%. This result highlights the importance of the iconic brand to the company as it deals with increasing competition on its domestic and international routes. Brands in the airline sector have been to the fore in Australian aviation with both Jetstar (28%) and Virgin Australia (16%) also recording strong increases in value.”