SA rises 8% in brand value, maintains position in top 50 most valuable nation brands
20 Oct 2021 | Bizcommunity
Despite the backdrop of Covid-19 and the nation's longest recession in nearly three decades, South Africa has recorded an 8% rise in brand value to $175bn to maintain its position in the top 50 most valuable nation brands, according to the latest Brand Finance Nation Brands 2021 report.
The nation
imposed some of the strictest lockdown measures in the world to combat the
pandemic, which resulted in nearly all of its industries recording a drop in
output – with construction, manufacturing and mining being some of the worst
hit sectors. That being said, the economy has begun to rebound and is expected
to continue to grow, largely driven by domestic demand and commodity exports.
The government has also announced it would be investing in more than 50 special
infrastructure projects to increase employment and kickstart the economy.
Jeremy Sampson, MD, Brand Finance Africa, commented: “There are mixed fortunes
for African nation brands this year. Nigeria, Egypt, Kenya, and Morocco have
edged up the ranking, with Sudan also making its debut in 83rd. However, South
Africa, Ghana, Ethiopia, Angola, and Tanzania have ranked lower than last year.
Nevertheless, as moves to unify African trade are making positive headway, we
can expect improvement moving forward in the continent’s nation brands as Africa
continues to rise on the global stage.”
Total brand value of top 100 up 7%
The top 100
most valuable nation brands in the world have recorded a 7% increase in brand
value since 2020, signalling that recovery is underway from the Covid-19
pandemic, according to the latest Brand Finance Nation Brands 2021 report.
Although this is a positive sign, uncertainty lingers and nation brand values
have not reached pre-pandemic levels yet. At US$90.8 trillion, this year’s
total brand value of the top 100 ranking is still 7% lower compared to 2019.
David Haigh, chairman and CEO, Brand Finance, commented: “Unlike previous
economic crashes, recovery is uneven and is pinned on the combination of
initial Covid-19 response strategies and a successful vaccination rollout. We
are starting to turn a corner, as the world’s most valuable nation brands begin
to return to pre-pandemic brand values. But results are varied, and it may take
years for some to recoup lost brand value, creating even greater disparity
between the most and least valuable nation brands.”
US and China lead the pack
There has been no movement in the top 10 this year, with each nation retaining
its rank from last year. All the top 10 have recorded a modest uplift in brand
value, however, in line with the global trend across the ranking.
The United States and China remain in a league of their own, claiming the first
and second spot in the ranking, respectively. The US has recorded a 5% brand
value increase to $24.8tn in a year that has been marked by great political and
economic change with President Joe Biden taking the helm. Similarly, China saw
a 6% uptick in nation brand value to $19.9 tn. Both nations have celebrated
economic recovery since the outbreak of the pandemic, contributing to their
uplift in brand value. China’s economy was the first to recover – doing so at a
meteoric pace - as the only nation to register positive GDP growth at the end
of 2020 and growing at record pace in the first quarter of this year.
Many thought that relations would improve between the two superpowers under
Biden’s leadership, following the turbulent Trump years, but this has not been
the case thus far.
Haigh commented: “The superpowers from the West and the East unsurprisingly
dominate the Brand Finance Nation Brands ranking, with China remaining hot on
the heels of long-standing leader, the US. With China’s recovery and economic
rise showing no signs of slowing down, as growth hit a record high at the
beginning of the year, no doubt the gap will continue to close in the coming
years.”
Digital Estonia is world’s fastest-growing nation brand
Recording a 38% brand value growth from last year and outpacing modest
increases across the ranking, Estonia is the world’s fastest-growing nation
brand of 2021. The Baltic state had invested in digital infrastructure long
before the Covid-19 pandemic hit the world. Anyone around the world can apply
for e-residency in Estonia, which allows them to run an EU-based company online,
and a staggering 99% of the country’s governmental services are offered online.
The advanced digitisation of the country put it on the front foot during the
pandemic. On the same day the government announced a state of emergency, the
Estonian Ministry of Economic Affairs and Communications launched an online
hackathon to identify solutions to pandemic-induced problems, resulting in a
chatbot to answer the public’s queries and the re-purposing of online platforms
to match volunteers with those in need.
Haigh commented: “Estonia is this year’s fastest-growing nation brand largely
thanks to its world-class digital infrastructure. With some of the leading
economies having their digital shortcomings highlighted during the pandemic,
Estonia’s digital-first model should be one for others to follow.”
Myanmar and Ethiopia are fastest fallers
In stark contrast, Myanmar and Ethiopia are the fastest-falling nation brands
in the ranking. The unrest across the two countries has caused significant
damage to their nation brand values, which have dropped 26% and 22%,
respectively.
Brazil has also suffered a steep decline in brand value as the Covid-19
pandemic wreaks havoc on its society and economy. The continent’s largest
economy, Brazil has lost 12% of its brand value this year and dropped out of
the top 20 in the Brand Finance Nation Brands 2021. Famous for its vibrant
culture, lifestyle, and sports, Brazil is the highest-ranked South American
nation in the ranking, but the combination of high COVID-19 cases and damage to
the agriculture sector from severe droughts have caused substantial damage to
the economy.
Switzerland is world’s strongest nation brand
In addition to measuring nation brand value, Brand Finance also determines the
relative strength of nation brands through a balanced scorecard of metrics
evaluating brand investment, brand equity, and brand performance. The nation
brand strength methodology includes the results of the Global Soft Power Index
– the world’s most comprehensive research study on nation brand perceptions,
surveying opinions of over 75,000 people based in more than 100 countries.
According to these criteria, Switzerland is the world’s strongest nation brand
with a Brand Strength Index (BSI) score of 83.3 out of 100.
Switzerland’s BSI score has remained stable, while the nations around it saw
theirs take a hit, resulting in Switzerland moving to the top spot for brand
strength. According to Brand Finance’s research, the Alpine nation saw external
perceptions slightly rise following its strong response to Covid-19. It used a
mix of compulsory and non-compulsory measures during the pandemic to control
the spread of the virus. For example, non-essential businesses had to close,
but the government’s order to stay at home was only ever advisory – entrusting
the people to make the decision for themselves.
This is reflective of Switzerland’s model of government, with the public
allowed to voice their opinions on laws through frequent referenda – last year
the population rejected a motion to end its freedom of movement agreement with
the EU and voted to make discrimination on the basis of sexual orientation
illegal.
Haigh commented: “Small size is no barrier to occupying a solid position for
nation brand strength and Switzerland securing the top spot this year is the
perfect example. Switzerland has held firm whilst other nations have faltered
over the course of the pandemic. The nation has recently been thrust under the
spotlight, however, with the leak of the Pandora Papers, which could taint its
reputation as Swiss financial advisers are scrutinised on the global stage.”
Germany slips to 5th
Last year’s strongest nation, Germany, has dropped down to 5th position in the
brand strength ranking, following a 2.3 point drop in BSI to 82.6 out of 100.
Despite garnering praise on the global stage for her strong and stable
leadership spanning 16 years, Angela Merkel sees mixed results on home soil.
Domestic perceptions are consistently less favourable across the metrics to
their overseas counterparts, particularly in regard to the Global Soft Power
Index Business & Trade and Influence pillars.
Australia and New Zealand move into top 10
Australia, up five places in the ranking to 6th, and New Zealand, up seven
places to 10th, have both entered the top 10 for brand strength, with BSI
scores of 81.3 and 80.2 respectively. The Australasian countries were deemed to
have handled the early days of the pandemic extremely well. Both were lauded
for their severe lockdowns and quick reaction to subsequent outbreaks, which
resulted in minimal cases and allowed them to open back up internally
considerably earlier than others.
At the time of our research, both scored well across our data points with
internal and external perceptions of their handling of the pandemic. However,
the vaccine rollout in both countries has lagged behind their global
counterparts, which could hamper their BSI scores moving forward.
Breaking the Western monopoly
Singapore and the United Arab Emirates have broken the Western monopoly in the
brand strength ranking, claiming 4th and 11th position respectively. Scoring
particularly high for Global Soft Power Index pillars of Business & Trade
and Governance, Singapore continues to prosper both in the Southeast Asian
region as well as globally. The city-state – renowned for its high-quality and
economically efficient healthcare – has already fully vaccinated 82% of the
total population. Singapore is on the right path to achieve the government’s
aim of a “whole new normal”.
The UAE has climbed three spots in the brand strength ranking following a
2.5-point increase in its BSI score to 79.1 out of 100. Overseas perceptions of
the nation’s prowess in the Education & Science pillar are high, and the
successful Emirates Mars Mission is clearly a factor. The UAE also stands out
for its Covid-19 response, and scores high for the Influence and Business &
Trade pillars, both of which should see a further boost from Expo 2020
inaugurated in Dubai this month. The UAE’s continued increases in brand strength
and value are testament to the nation’s strategy of diversifying its economy
for long-term growth.
Covid-19 hurts perceptions of world’s largest economies
At the same time, the UK, US, Japan and France have all fallen out of the top
10 strongest nation brands ranking due to the perception of how they handled
Covid-19.
The UK, falling from 2nd to 16th with a BSI score of 77.4, and France, falling
from 9th to 18th with a score of 75.4, recorded average Global Soft Power Index
scores for overseas perceptions of their handling of the pandemic, but
perceptions domestically were particularly low.
Japan, falling from 7th to 17th with a score of 76.7, saw a similar story with
the perception at home that the pandemic was mishandled. However, this is
polarised when compared to their perception abroad, where it achieved some of
the highest scores in the Global Soft Power Index research.
The US, dropping from 4th to 19th with a score of 75.1, saw poor scores at home
and abroad, and was also one of the lowest ranked nations by the specialists.
Despite their brand strength taking a hit, these nations all still feature in
an unchanged top 10 when ranked by nation brand value.
Haigh commented: “It will be important for the world’s largest economies to
focus on making up the ground they have lost in brand strength, in order to
protect their brand value. The UK, US, Japan and France have all scored poorly
domestically for their handling of Covid and they need to rebuild this trust
with their respective populations.”
