According to Brand Finance’s Global 500 2017 report, the world’s most valuable brands for year ahead are Google (1), Apple (2) and Amazon (3). Fellow American brands make up most of the top ten places: AT&T (4); Microsoft (5); Verizon (7); Walmart (8) and Facebook (9).
However, South Korea’s Samsung came at sixth for brand value disrupting the United State’s clean sweep. Moreover, Chinese bank ICBC ranked tenth, crowning it the most powerful banking brand, and dethroning Wells Fargo as the most valuable financial brand in the world.
Zooming out, a glance at the top 50 most valuable brand provides a clearer view of the growing brand value coming out of Asia, from countries like Japan and China.
The 2017 edition places ten Chinese firms in the top 50 for brand value, with four Japanese brands and two Korean. The U.S. is still the dominant nation with 27 brands in the top 50. Surprisingly, the UK has only one.
Sportswear giant Nike leads the apparel and accessories industry at No. 28, followed by Swedish retailer H&M at No. 63; Zara at No. 90; Louis Vuitton at No. 101; Adidas at No. 138; Hermès at No. 172, and Gucci at No. 219. Other fashion names that are making A first appearance on the list include Coach and Christian Dior ranked at No. 368 and No. 500, respectively.
Media is another major sector representing brand value. While Facebook continues to climb the ranks following 82% brand value growth, it is being outdone by China’s biggest tech brands, said the report, thanks to China’s market value.
“Alibaba, WeChat and Tencent have grown by 94%, 103% and 124% respectively. WeChat has over 850 million users and despite being largely confined to its domestic market, could soon start to challenge Facebook for user numbers,” said the report.
“WeChat offers a more extensive range of services, than any comparable brand, from mobile payments to video games and text messaging to video sharing. As a result it is far more embedded in the life of the average user, even replacing work emails for many Chinese, opening the door to brand extension and further growth,” it added.
China, as a burgeoning market, is increasing in value for foreign brands, the report added. Non-Asian firms like Lego are taking both geographic opportunities and risks, shifting operations and opening regional offices in China.
“Lego opened its first factory in China in Jiaxing in 2014 as well as a new Asian Head Office in Shanghai,” said the report. “China presents risks, including the fact that Lego cannot rely on the nostalgia or awareness that it has enjoyed in Europe and the US for decades, however it is also a huge opportunity.
“China is a vast market (there are nearly 150 million children under the age of 10) but domestic scandals over the safety of children’s products leave fertile ground for a foreign firm with a reputation for reliability, high standards of production and for nurturing children’s creative and cognitive development,” the authors added.
Brand Finance’s Global 500 values are calculated on the basis of how much each brand would be willing to pay for its own license if it did not already own it. The company also calculates future revenues and a royalty rate that is determined by reviewing comparable licensing agreements.
Other values that are taken into account include the brand’s growth rate, emotional connection with the consumer and how much it is investing in itself.