South Africa has inched up one place in the Brand Finance Nation Brands 2019 ranking after recording a 5% increase in brand value to $218 billion, despite the nation facing increased political and economic instability, according to the latest report by brand valuation consultancy, Brand Finance.
The South African economy defied the odds, revealing a slight uplift in GDP in the second quarter of 2019, largely attributable to the boost in the mining, manufacturing and electricity sectors, the report said.
South Africa’s Brand Strength Index (BSI) score is also improving, now at 64.9 out of 100 with a corresponding AA- brand strength rating.
“As the ‘gateway to Africa’, South Africa is able to rely on its relative sophistication and ease of doing business, in comparison to its neighbours, which helps bolster the nation’s BSI,” Brand Finance said.
“We are currently facing turbulent times in South Africa 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.
“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,” said Jeremy Sampson, managing director, Brand Finance Africa.
West versus the rest
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 most valuable nation brands.
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 is 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 $37.8 trillion – 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 $60.3 trillion. Topping the ranking again this year, the nation brand value of the United States alone stands at $27.8 trillion.
China shows no sign of slowing
China continues to grow at a very healthy rate, recording a 40% increase in brand value to $19.5 trillion.
“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 $12 trillion last year to just over $8 trillion in 2019,” Brand Finance said.
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,” the report said.
Japan overtakes UK
Behind the US, China, and third-placed Germany, Japan’s brand value has increased 26% to $4.5 trillion. 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,” Brand Finance said.
“As the tech powerhouse economy of Asia, Japan is progressively forward-thinking and outward-looking, protecting itself amid global uncertainty.
Championed by Abe and Trump, the Free and Open Indo-Pacific Strategy supports and promotes connectivity and free trade in its own right. However, the nation is contending with its ‘super-ageing’ society putting pressure on social and health services.”
Singapore has retained its title of the world’s strongest nation brand, earning the elite AAA+ rating and a Brand Strength Index (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.