TikTok becomes world’s fastest-growing brand- report
A new brand valuation report has named TikTok, a video-focused social networking service, as the world’s fastest-growing brand with an astounding 215 percent growth to $59.0 billion from$18.7 billion in 2020.
The report by Brand Finance, a London-based brand valuation consultancy ranked 5,000 of the biggest brands to get the top 500 brands across all sectors and countries.
According to the report, the entertainment app is the highest new entrant to the Brand Finance Global 500 2022 ranking leading global revolution in media consumption.
“TikTok’s rise is testament to how media consumption is changing. With its offering of easily digestible and entertaining content, the app’s popularity spread across the globe, however, it also acted as a creative outlet and provided a way for people to connect during lockdown,” the report states.
It also added that strategic partnerships, such as its sponsorship of the UEFA Euro 2020 tournament, exposed TikTok to demographics outside of its original Generation Z base.
“It crossed the one billion user mark in 2021 and became the most downloaded app across Android’s Google Play store and Apple’s App Store.”
Launched in 2016, the Chinese app hosts a variety of short-form user videos, from genres like pranks, stunts, tricks, jokes, dance, and entertainment with durations from 15 seconds to three minutes. As of October 2020, it surpassed over two billion mobile downloads worldwide.
David Haigh, the chief executive officer at Brand Finance said, media consumption has increased throughout the COVID-19 pandemic, but what is more is the way we consume it which has irrevocably changed.
“In order to compete in this evolving marketplace, media organisations have invested heavily in their brands from content acquisition through to user experience,” Haigh further said.
Overall, media brands account for the top three fastest-growing brands in the ranking with another social media app Snapchat whose brand value is up by 184 percent to $6.6 billion and South Korean internet brand Kakao, up 161 percent to $4.7 billion following closely behind TikTok.
Other notable performers from the media sector include those that offer streaming services, with Disney (brand value up 11 percent to $57.0 billion), Netflix (brand value up 18 percent $29.4 billion), YouTube (brand value up 38 percent to $23.9 billion), and Spotify (brand value up 13 percent to $6.3 billion) all seeing increases.
In measuring brand value – the net economic benefit a brand owner achieves by licensing it in the open market – Brand Finance adopted the royalty relief approach.
This method involves a combination of the market and income valuation approaches. The value of the intangible asset is based on the costs that the company would avoid by not having to pay a licence fee or royalty to use the asset. This is compliant with the industry standards set in ISO 10668.
The report also highlighted that tech remains the most valuable industry; while second-ranked retail crosses the $1 trillion mark following 46 percent brand value growth during the pandemic.
Developed countries like US and China dominated the table, claiming 2/3 of brand value, while African brands continue to elude ranking, with the continent’s most valuable MTN (brand value $4.0 billion) just under top 500 thresholds.
According to Jeremy Sampson, the managing director at Brand Finance Africa, it is estimated that the continent will soon house a quarter of the world’s population, making it a lucrative location for global multinational brands.
“Within this context, no African brands feature in the ranking of the world’s 500 most valuable, as many local brands have been discontinued by global giants,” Sampson said.
He adds, “However, South African telecoms giant, MTN is currently performing very strongly and is well-positioned for the future, so could be expected to move closer to being included in the ranking next year.”