South Africa records 5% brand value growth, to US$218bn
South Africa has recorded 5% brand-value growth, to US$218bn, amid political and economic instability, according to the 2019 Brand Finance Nation Brands report. Other key findings are:
- Average nation-brand value growth among developing economies is at 13.9%, compared to only 0.4% for developed economies in Brand Finance Nation Brands 2019 ranking
- China is closing gap behind leader US, following 40% brand-value growth
- Japan has overtaken UK in 4th spot, as Brexit uncertainty prevents growth
- India has made gains, jumping to 7th spot, while no new brands have broken into top 10
- Turkey is making nation-brand value turnaround, following difficult 2018
- Singapore remains the world’s strongest nation brand, with a Brand Strength Index (BSI) score 90.5 out of 100
Top 11 nation brands
Brand strength rating
SA’s BSI score is improving and is now at 64.9 out of 100, with a corresponding AA- brand strength rating. As the ‘gateway to Africa’, SAis able to rely on its relative sophistication and ease of doing business, in comparison to its neighbours, which helps bolster the nation’s BSI.
“We are currently facing turbulent times in SA with high levels of political uncertainty, against a backdrop of a flat economy, and business confidence as low as it was in the mid-1980s,” says Jeremy Sampson, Brand Finance Africa managing director. “There is a desperate need to kick start the economy and piece together our fractured ruling party if we want to see more than a modest growth in our nation’s brand value in the future.”
Developing vs developed
Developing economies have seen 30 times faster nation-brand value growth over the past year than developed ones. The average year-on-year nation-brand value growth among the developing economies stands at 13.9%, compared to as little as 0.4% for the developed economies included in the annual study into the world’s 100 mos- valuable nation brands. This means that, on average, the nation brands of developing economies have been growing at a pace 31.3 times faster than the developed ones.
Nation brand values of most developed economies have contracted or stagnated year on year. Japan is a notable exception with 26% growth but, even so, it’s only the 15th fastest-growing nation brand this year, behind many developing African, Middle Eastern, Asian, and Latin American nation brands. Consistently with previous years’ trends, 11 out of the 20 fastest-growing nation brands of 2019 come from the Middle East and Africa, with Ghana (up 67%), Uganda (up 56%), and Egypt (up 50%) in the top 5.
Although catching up, at US$37.8tron, the combined nation brand value of the 65 developing economies in the study remains far behind that of the 35 developed economies, which sits at US$60.3tn. Topping the ranking again this year, the nation brand value of the US alone stands at US$27.8tn.
Claiming second position, China continues to grow at a very healthy rate, recording a 40% increase in brand value to US$19.5tn. Building on its solid performance in previous years, China is closing the gap behind long-standing leader the US, which has recorded a brand value growth of just 7% over the past year. The difference in value between the two nation brands has dropped from US$12tn last year to just over US$8tn in 2019.
The two largest economies in the world have been at loggerheads since July last year in a bitter trade war, with tariffs imposed by both sides on billions of dollars’ worth of imports and exports. Despite this, China’s brand value has defied the expectations of a slowdown, benefitting from the glowing success of some of its most-dominant and -valuable brands, including ICBC, Huawei, and Alibaba. The latter two, in particular, have embraced strong marketing strategies that mirror their international counterparts, which have helped successfully propel them onto the global stage as legitimate competitors to western brands.
Behind the US, China, and third-placed Germany, Japan’s brand value has increased 26% to US$4.5tn. In spite of predictions that its economy would suffer in the face of a global slowdown, Japan has been able to reap the benefits from its solid consumer spend and high levels of business investment. In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of nation brands, determined by performance on dozens of data points across three key pillars: Goods & Services, Investment, and Society. According to these criteria, Japan has also recorded solid growth in brand strength, jumping to a AAA brand strength rating, with a corresponding BSI score of 85.8 out of 100.
Taking fourth rank, Japan has pushed the UK, which saw little uplift from last year (up 3% to US$3.9tn), into fifth position. With the final Brexit decision yet to come and therefore not currently accounted for in the nation’s brand value, the next few months will be crucial in determining the UK’s future outlook.
The uncertainty around Brexit has prevented both the UK and the rest of the EU from faster growth. Ireland, however, seems to be making the most of the situation. Ireland’s nation-brand value has more than doubled since 2015 — the year before the disruption of status quo through the Brexit referendum — increasing 110%. By contrast, in the same period, the UK’s natio- brand value and the combined brand value of the other EU member states have only grown 19% and 32% respectively. Confirming strong performance, Ireland is the fastest-growing nation brand in Western Europe in 2019, up 12% to US$604bn, while all other players in the region have recorded a minimal uptick or a decline. A potential no-deal scenario is, however, likely to cause challenges for Ireland going forward.
Although there were no new entrants to the club, India (up 19% to US$2.6 trillion) has made the largest jump within the top 10, from 9th to 7th position. The economy was quick to recover after the global financial crisis, with growth now reduced by a recent slowdown in both the manufacturing and construction sectors.
Other movers in the top 10 include: Canada, dropping from 7th to 8th (down 2% to US$2.2tn); Italy falling from 8th to 10th (down 5% to US$2.1tn); and South Korea, which has inched up one place from 10th to 9th (up 7% to US$2.1tn). South Korea is one of Asia’s largest economies and benefits from its strong export base and improved structural policies that have bred inclusion and enhanced productivity.
Turkey has recorded a remarkable turnaround from its performance in 2018, going from a loss of almost a third of its nation brand value, to this year leaping up 47% to US$560 billion.
Singapore has retained its title of the world’s strongest nation brand, earning the elite AAA+ rating and a BSI score of 90.5 out of 100. Although this is a slight drop from 2018, Singapore is the only nation in the ranking to record a BSI over 90.