MUMBAI, India - According to a BrandZ study conducted by research agency Millward Brown and commissioned by WPP, the overall value of top 50 brand has dropped by 2 percent in 2016.
However, the report pointed out that the brand value of the top 50 brands in the country increased by 30 percent over the span of three years.
The study noted that the fall in brand value of state-owned banks was the primary reason for this dip.
The drop is not considered to be a severe one however.
The combined value of the 50 top brands in the company came to $90.5 billion, which is a downgrade from $92.2 billion in 2015.
The report stated, The 2 percent adjustment is primarily attributable to state-owned banks, which declined 33 percent in brand value because of loan performance difficulties. With the same state-owned banks removed from the 2015 and 2016 rankings, the value of the India BrandZ Top 50 actually rose 2 percent year on year."
HDFC Bank, a commercial bank of the private sector, was ranked right on top for the third consecutive year carrying the brand value of $14.4 billion, with an upgrade of 15 percent since last year.
The second and third positions were bagged by telecom giant Airtel and State Bank of India, respectively.
Asian paints claimed the fourth position and was followed by ICICI Bank, Bajaj Auto, Kotak Mahindra Bank, Maruti Suzuki, Hero and Axis Bank in an ascending order.
With 38 percent of the total value of the top 50 brands, banks and financial companies dominated the list.
For the first time in Indias accounted history, retail and aviation brands ascertained a place in the top 50 list with Indigo (26) and Jet Airways (36) representing the airline industry and Reliance Retail securing the 50th position representing the finance industry.
The research is said to have covered 60,000 consumers with over 600 brands across 50 categories in the country.
Kantar Millward Browns South Asia Managing Director, Dinesh Kapoor told reporters during the release of the report, "Over the past year, brands have had to work hard to hold on to their position in the top 50. 20 brands have witnessed a drop in their ranking within the top 50. Brands which have managed to sustain their ranking over the past two years have only been able to do so by increasing their brand value by over 35 percent."
People who wouldve invested in these 50 companies wouldve gotten a better return than those who invested in Sensex companies, the study claimed.
A $1,000 investment in these 50 companies wouldve presented a return of $1,108, whereas, an investment of the same amount in Sensex companies wouldve returned $965.
The study claimed, "The stock portfolio of the BrandZ Top 50 most valuable brands increased 10.8 percent in value between August 2014 and August 2016, while over the same 24-month period, India's Sensex, a weighted index of 30 stocks on Bombay Stock Exchange, declined 3.5 percent."
In addition, the number of brands that have originated in India increased from 34 in 2014 to 36 in 2016.
David Roth, Store WPPs Chief Executive Officer for Europe, Middle East, Africa and Asia stated, There is a huge potential for Indian brands to become strong regional brands or even global brands. If you look at the top 100 global brands, there is one Indian brand compared to 14-15 Chinese brands. Indian brands are under-represented. In another 5-10 years, we should see a number of Indian brands becoming contenders at global level.
Technology is the primary reason for consumers to turn their backs on a regular brand, the study added.
"Access to the Internet and increased mobile penetration has seen the aspirational gap and purchasing patterns between rural and urban Indians narrowing. Mobile has become an enormous social and demographic equaliser," Kantar Insights South Asia CEO Preeti Reddy claimed.
Reddy pointed out, "It is changing the consumer-brand relationship. Consumers are empowered and more informed. They are actively participating rather than passively listening and are willing to trade up and select quality over quantity."