LINE and Rakuten the fastest risers in BrandZ Japan’s Most Valuable Brands

Total brand value drops 9% as recession, pandemic and delayed Olympics create growth challenges and opportunities.
05 November 2020
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Toyota has retained its place as the most valuable brand in Japan, increasing its hold on the key cars category in the second BrandZ Top 50 Most Valuable Japanese Brands ranking by WPP and Kantar. Telecom provider NTT ($20.3 billion) remains second, growing 1% in brand value, with Sony ($12.0 billion) moving up 3% to take third place.

Toyota’s impressive $28.4 billion in brand value represents a slight drop (2%) from 2020, but against the backdrop of a 10% fall for the category as a whole it demonstrates the strength and resilience of the Toyota brand. Cars account for 24% of the total ranking value with five brands featured.

While the overall value of the ranking dropped by 9% to $202.9 billion, there were winners in entertainment and technology. The entertainment category was the big winner, up 19%, as consumers opted for stay-at-home social activities despite some of the world’s lightest lockdown restrictions.

Nintendo (No. 8, $8.6 billion) stood out as a leading disruptor and innovator in the ranking. Games such as “Ring Fit Adventure”, “Animal Crossing”, and “Pokémon Sword and Shield” helped contribute to a surging demand for consoles. The brand matched the needs of consumers with a range of games that met demand for physical activity, social interaction and escape from the stress of social distancing.

Communications platform LINE (No. 13, $4.3 billion) was the fastest riser, up 34%. It has become an integral part of Japanese life and LINE News’s active users, text message volume, stamp usages, and in-app call volume increased significantly during the lockdown. The government used it as a tool to reach younger audiences, even conducting health surveys and online health consultation programs.

The pandemic has also accelerated Japan’s move to digital. Despite being an advanced technological market, rates of e-commerce have previously been low, but that is now changing and companies are investing heavily. Japan’s leading online retailer Rakuten (No. 23, $2.5 billion) was one of the biggest beneficiaries, with its brand value up 22%, on the back of a 7.65% growth in e-commerce in 2019.

Similarly, retailer Nitori (No. 26, $1.9 billion) proactively streamlined and focused resources on e-commerce, helping to boost online purchases by more than 40%.

Three new brands joined the Top 50: Leading drugstore chain Welcia ($1.1 billion) is the highest-ranking newcomer at 36. Colourful discount retail chain Don Quijote ($1.0 billion) follows close behind at number 37. Canned coffee brand Georgia ($953 million) – a subsidiary of The Coca-Cola Company that’s become a quintessential Japanese drink since its debut in 1975 – enters the list this year at number 41.

Success means being different and trusted

Dividing lines between success and failure are difference and trust. Brands that were growing in value scored an average of eight points higher for “different” – a measure of how much consumers perceive a brand to stand for something unique – compared to those that were declining in value.

Strong perceptions of trust also helped some of the hardest hit sectors during the pandemic. This was a tough year for the travel services industry as a whole (down 34%), but ANA (No. 28, $1.9 billion) was the airline brand in the Top 50 that declined the least (27%) within this category. It remains Japan’s most trusted brand with logistics company, Yamato Transport (No. 32, $1.6 billion), close behind.

ANA thrived by delivering on three essential components of brand trust: Integrity, Identification and Inclusion. During the pandemic, it launched “ANA Care Promise”, an initiative to assure travelling passengers of its commitment to the new safety and comfort standards of the new normal, while also providing educational and entertaining branded content to connect with audiences at home.

The BrandZ rankings clearly demonstrate the resilience of strong brands in times of crisis. Despite the global coronavirus hitting the automotive sector hard, Toyota’s performance has been far less affected than that of its rivals in Japan; its brand value gains have seen it strengthen its leadership. Similarly, ANA’s powerful brand has protected its value in a sector that has been cruelly hit.

BrandZ Japan

Other key highlights include:

  • Delayed Olympics represent a big opportunity for 2021: A rescheduled Olympics could offer Japanese brands an even greater opportunity to touch the world. Tokyo 2021 could be a symbol of hope, resilience, ingenuity, and togetherness for a world emerging from the coronavirus pandemic. Japanese brands have often emphasised functional benefits over emotional messaging in their marketing – but with the world watching, the “Olympic halo” could offer the perfect opportunity to focus on positive human sentiment.
  • Mixed category performance: Four categories in the BrandZ Japan Top 50 saw year-on-year value increases: Entertainment (19%), Personal Care (7%), Home Care (5%), and Telecom Providers (3%). Not coincidentally, all four of these categories also have a strong presence in the home environment. Cars (-10%), Retail (-9%) and Technology (-8%) all saw declines similar in magnitude to the overall 9% value decrease for the whole Top 50 portfolio.

This year’s Top 50 ranking of Japan’s most valuable brands shines a light on those brand and marketing strategies that have helped to withstand macro challenges, even a global pandemic. The foundation of trust, intrinsic to Japanese society, is now even more important as consumers face unprecedented uncertainties. Secondly, ‘difference’, which is about standing for something unique, and an unwavering commitment of certain values and emotions in everything the brand does, helps create greater resilience and return on investment than purely the pursuit of salience. In some cases, this even allows the opportunity to charge a premium.

The BrandZ Top 50 Most Valuable Japanese Brands ranking and report featuring extensive analysis are available online here.

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