In its annual report of the world’s most valuable retail brands, consulting firm Brand Finance said Amazon Inc. came in number one followed by Wal-Mart Stores Inc. and then Alibaba Group, which saw the value of its brand rise 94 percent this year.
The Chinese online marketplace site watched the value of its brand rise to $34.8 billion from $17.9 billion last year. Brand Finance uses a formula for brand valuation that includes corporate reputation, loyalty, staff satisfaction, familiarity in the market and marketing investment, among other measures. Aside from the dollar amount, brand finance awards the brand with a letter rating up to “AAA+.”
In a separate report from Brand Finance, the company named Nike, H&M and Zara at the most valuable apparel brands. Nike was valued at $31.8 billion, H&M at $19.2 billion and Zara at $14.4 billion. In fourth was Louis Vuitton at $13.2 billion, which was followed by: Adidas ($10.2 billion); Uniqlo ($9.6 billion); Hermès ($8.3 billion); Rolex ($7 billion); Gucci ($6.9 billion), and Cartier ($6.8 billion).
Alibaba garnered a “AA+” rating this year. The company’s annual sales are in excess of $100 billion.
“Alibaba’s brand value has nearly doubled, making it this year’s fastest-growing retail brand,” the researchers said in their report adding that the “online marketplace continues to thrive in China and globally.”
The value of Alibaba is driven by its efforts within China, but also as it builds global recognition. The report said Alibaba’s “success stems from the opportunities to both open up and simplify commerce for Chinese communities, particularly rural ones. Its service has clearly underpinned brand value growth at home, but in order to accelerate growth abroad by aiding brand recognition, it is investing in marketing communications including joining McDonald’s, Coca-Cola and Visa as a major sponsor of the Olympics Games.”
For Amazon, the value of its brand rose 53 percent to $106.4 billion from $69.6 billion last year. The online e-commerce giant was given a “AAA-” rating by the firm. Amazon’s annual revenue is over $136 billion.
Brand Finance said the company is “growing strongly as it continues to both reshape the retail market and to capture an ever larger share of it.”
Noteworthy, said the researchers, is that while Amazon’s brand value is “already nearly double that of second-placed Wal-Mart,” further growth is possible. Brand Finance also values the brands of companies in other sectors, and said Amazon could emerge as the most valued brand.
“Amazon Fresh, its grocery service, is still relatively limited in scale but this year began operating overseas for the first time, serving Central and East London initially,” the authors of the report said. “Amazon has stated it will create 100,000 jobs in the U.S. over the next 18 months. Such confidence suggests that Amazon may well become the most valuable brand in the world in 2018.”
Other top brands in the retail sector include The Home Depot at number four with a valuation that gained 5 percent to $30.2 billion. Fifth was Ikea with a 42 percent gain in valuation to $24.1 billion. Sixth was CVS/Caremark with $23.3 billion — a 2 percent year-over-year gain. Taking the number-seven spot was Target Corp. with $17 billion in brand valuation, which reflected an 11 percent gain. Walgreens was next at $16 billion, gaining 12 percent, and was followed by Lowe’s at number nine with $14 billion — a 10 percent boost over last year. And 10th was Costco Wholesale with a valuation of $13.5 billion, a 14 percent year-over-year gain.
The retail brands that composed the top 50 included nameplates such as Macy’s, Carrefour, JD.com, Tesco, Kroger, T.J. Maxx, Nordstrom, Kohl’s, Marks and Spencer, Best Buy and Ross Stores, among others.
“T.J. Maxx [known as TK Maxx in Europe] has grown rapidly this year, with brand value rising 79 percent to $5.6 billion,” the report said. “A stronger trend for cost consciousness in western markets, originally initiated by the financial crisis, has been sustained even as the economy has recovered. T.J. Maxx’s reputation for exceptional value is key to its success and consumers’ affinity for its brand. However, just as significant is the fact that it is a gateway to the world’s most powerful and desired apparel brands for a vast swathe of consumers who could otherwise not afford them.”
The analysts also cited Ross Stores for similar growth in brand valuation.
Regarding the growth of apparel brand value, the researchers said that Marc Jacobs is the fastest growing brand in the segment with its brand value growing 84 percent this year. “This is attributed in part to its recent restructure which involved folding its widely distributed ‘diffusion’ collection Marc x Marc Jacobs into its main line to offer a wide range of products under a single unified brand in an attempt to move upmarket and fortify the brand name of each collection,” Brand Finance said. “If the restructure proves successful, the luxury apparel’s brand value will continue to rise.”