Power brands suffer under credit crisis

Asia Pacific - Brand valuation consultancy Brand Finance has updated its 500 most valuable Global Brands report, revealing that between January and September this year, the world’s top brands shed US$67 billion in total value.

In March Brand Finance released the 2008 version of its 500 most valuable Global Brands study, but with recent news clouding the world’s financial markets, the updated version paints a very different picture.

The company, which evaluates the value of a brand based on historical growth trends and financial reports, said while a number of brands including Coca-Cola, Nokia and CITI Group had slumped, some like McDonald’s were steady.

The report shows that Coca-Cola lost its number position as the world’s most valuable brand to retail giant Wal-Mart.

Coke dropped 8% in value, largely due to pressure from healthier beverage companies, which have impacted on the overall value of the Coke brand.

Technology giants Microsoft and Google held the number 3rd and 5th most valuable brands on the league table with a brand value of $US39.3 billion and US$37.5 billion respectively.

Competition in the online advertising market is likely to continue and with the launch of Google Chrome, the competition is set to intensify in the coming year, the report stated.

In the Asia-Pacific market, the report shows brands are largely holding steady, maintaining a 15% stake in the Global 500 with an aggregate value of about US$366 billion, or 9.8% of the total brand value.

Japanese companies are still the most represented in the Global 500, with a total of 54 representatives out of the 88 Asian brands included.

Korea, China and Australia are the other primary countries represented by companies from Asia.

Singapore Airlines, however, ranked 280 overall but in terms of Brand Rating, it is ranked among the top 23 overall and the top airline represented from Asia.

David Haigh, CEO of Brand Finance, said there was clear evidence the brands which invest in marketing are surviving the global financial crisis.

“There is clear evidence that basic, value for money brands are performing very strongly, particularly when they invest consistently in advertising and marketing,” he said.

“By contrast unnecessary or discretionary brands like Starbucks, Nike, Coca-Cola and L’Oreal are declining in value as consumers watch their finances more carefully.”