Number of trusted brands drop by 12.5% over past three years: report
Mumbai: The past year has been inundated with negative news reports of some of our biggest brands in the banking, technology and consumer goods sectors—from the PNB fraud case involving Gitanjali Gems and Nirav Modi, Facebook data theft, Rotomac loan default, to controversies surrounding ICICI Bank and Videocon.
While some of these brands are yet to lose face with consumers, there is a growing sense of mistrust in the public, according to the latest Brand Trust Report released on Tuesday. The trust factor of a number of brands have been sliding for the third year in a row, it said.
The study, now in its eight year, also said there is a fall in the overall number of brands whose trust has eroded, indicating a growing dissatisfaction among the public.
Overall, the number of trustworthy brands dropped from 351 in 2016 to 307 in 2018—a net fall of 12.5% over the three years. Additionally, the number of brands with decreasing trust was up by 6.5% compared with the figure over a year-ago.
“What we are seeing is optimism decreasing and despondency increasing,” said N. Chandramouli, chief executive officer of Trust Research Advisory (TRA), which publishes the report.
Interestingly, the top three brands Samsung, Sony and LG have managed to maintain their ranks for the second year in a row, the report said. “A brand has to remain consistent in their messaging, and understanding the buyers/stakeholders personas and deliver on time,” said Youngnam Roh, director, home appliances and air conditioners, LG India Pvt Ltd in the report.
Meanwhile brands like Gitanjali, which led the jewelry sector last year as the most trusted brand figured nowhere among the top 1,000 today. Surprisingly, the scam-hit banking sector showed an increase of trust in the PSU banks. At least 15 PSU banks, almost double the number of private banks, were featured in the trustworthy category, the report said, adding that is perhaps a reflection of the trust that comes with a feeling of ‘guarantee’ that state-owned banks exude.
Brands like ICICI Bank and Rotomac, which manufactures stationery products, have also maintained their ranks, this is despite Rotomac’s promoter Vikram Kothari and his son have been arrested for cheating a consortium of seven PSU banks in the alleged Rs3,695-crore willful loan default case.
Facebook, which is currently embroiled in a data theft controversy, has also improved its consumer ratings, jumping to number 49 position, said the report which has been prepared based on a study carried out between November 2017 and January 2018.
The report said that ‘necessary to have’ or essential sectors like banking, manufacturing, education and healthcare have done better than the ‘nice to have sectors’ or indulgence sectors like fast moving consumer goods (FMCG) and food and beverage (FnB).
Sectors like Direct to Home (DTH) also saw their index slipping due to the disruption caused by on-demand channels like Hotstar and Amazon Prime, the study said.
All put together, the fall in general consumer trust seems to be a combined effect of economic slowdown caused by demonetization and GST, and the uncertainty that any pre-election year brings to the minds of consumers. The lack of visible results of government action on many fronts also seems to be a cause of concern with consumers, said the report. “The study is reflective of the consumers need for stability. It also reflects their general risk taking ability is down,” said Chandramouli.
Brand Trust Report 2018 is based on more than 15,000 hours of fieldwork. It is a collection of 2,488 questionnaires and the respondents are salaried professionals from some of the richest households of the country who are proficient in their knowledge of brands and ability to speak, read or write in two languages including English.