A new brand valuation report has found that Nigeria’s top brands account for six percent of the total brand value on the continent, a ranking that puts it behind South Africa.
The study by Brand Finance Africa, a brand valuation consultancy that ranked 150 top African brands said some of the top Nigerian brands are yet to make inroads in the continent, development analysts say limit both their market share and the country’s sphere of influence.
Many of these brands, the report said, saw their valuation decline $5.5 billion to $40 billion in 2021, 12 percent fall in 2020 due to the impact of the Covid-19 pandemic.
The report ranked 33 Export lager beer, Nigeria’s most valuable brand at 43rd in the overall ranking but the brand declined eight percent to $292million.
Access Bank emerged as Nigeria’s fastest-growing brand according to the report, following an eight percent increase in brand value to $262 million, a growth that has bucked the global trend for the banking sector this year. It ranked 47th in Africa.
Babatunde Odumeru, the managing director of Brand Finance Nigeria, said Nigeria’s top brands are not yet truly Pan-African, although their performance may be solid on home soil, they are failing to translate this internationally.
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“We are witnessing some brands make strides towards expanding their footprints, should they do so successfully we could see a greater uplift in brand value, as well as more Nigerian brands featuring in the ranking,” said Odumeru.
In measuring brand value – the net economic benefit a brand owner achieves by licensing it in the open market – Brand Finance Africa 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 license fee or royalty to use the asset. This is compliant with the industry standards set in ISO 10668.
The latest report, the second by the organisation comes at a time when businesses are still reeling from the impact of the coronavirus pandemic.
“In a year that saw most African countries go into lockdown and significant unrest across the continent, a decline in total brand value for the top African brands is unsurprising,” said Jeremy Sampson, managing director at Brand Finance Africa stated in the report.
Sampson said that following the pandemic, African brands will need to search for opportunities to make up lost ground by embracing new technologies and collaboration, to propel its recovery.
South African brands dominated the current ranking, clinching the first ten spots. In total, 81 South African brands featured with a cumulative brand value of $29 billion, equating to 73 percent of the total brand value in the ranking, a 15 percent decrease from last year.
Morocco is the third most-represented nation in the ranking, with 10 brands featuring, which account for 6 percent of the total brand value.
Analysts say Nigerian brands that want to transform into global giants should have a coherent strategy that includes quality goods and services, acquire deep consumer insight in different parts of the world and develop a winning route to market.
“If your root to market is weak then people will not see your brand when and where they need to see it. Many times, we are not good at the root to the market in this part of the world. People just copy and paste it without going deep into understanding the design and development of it,” said Uchenna Uzo, consumer expert and the faculty director at the Lagos Business School
Uzo urged leading local companies to deliver on their brand promise, be consistent with quality offerings, and learn from top brands Coca-cola or Nike, who are locally rooted in their messaging showing good consumer insight.
“We also need innovation. Great brands keep refreshing their offering, message and packaging. It is not just offering the same thing always. There is always an element of refreshing, renewing and we also need to get Nigerian brands to have this innovative mind-set around doing things,” Uzo said.
Analysing specific sectors where there was a significant shift, the report’s authors found that the decline in alcohol brand value follows global trends where economic shutdowns due to pandemic forced the closure of bars and restaurants.
The banking sector has celebrated strong revenue growth over the previous year and has made some strides towards its expansion plans, through completing acquisitions across Zambia and Kenya, the report said.
“The bank shows no signs of slowing down with plans underway to enter the South African market through its investment in Grobank, a key part of the bank’s wider mission to become ‘Africa’s Gateway to the World,” the report said.