The Netherlands remains ranked as the world’s 13th most valuable brand nation. The country’s brand value is down by 21% to US$945 billion. The top 100 nation brands based in the Brand Finance Nation Brands 2020 ranking lost US$13.1 trillion of brand value last year as they were affected by the COVID-19 pandemic. Meanwhile, China’s brand value stands at US$18.8 trillion. It continues to close in on the US, which has a brand value of US$23.7 trillion. Japan was ranked 3rd in the world as its economy recovered quickly and remained largely intact from the pandemic. Ireland has been the only nation brand in the top 20 to see brand value growth of up to 11% at US$670 billion due to its robust economy bolstered by strong exports and consumer spending. Vietnam, which has been emerging at the Southeast Asian center for manufacturing, has outranked the global trend with a brand value up 29%.
On the other hand, Argentina has been the fastest declining nation brand with its brand value falling 57% as their COVID-19 cases hit 1 million last year. Germany is the world’s strongest brand nation, obtaining a Brand Strength Index (BSI) score of 84.9 out of 100. Brand Finance’s Global Soft Power Index data has been included in the BSI for the very first time. This means that the initial research on global and domestic perceptions of nation brands has now become a part of the Brand Finance’s assessment procedure.
Nations ranked in top 100 brands lose US$13.1 trillion of brand value
As a result of the COVID-19 pandemic, the top 100 most valuable nation brands in the world have suffered a tremendous loss equivalent to US$13.1 trillion according to a report published by Brand Finance, the world’s leading brand valuation consultancy.
2020 has certainly challenged and tested the nations of the world – from the economic impacts of COVID-19, inflation rates, economic uncertainty and diminished long-term economic prospects. The Brand Finance Nation Brands 2020 report has estimated that the aggregate brand value of the top 100 nation brands fell from US$98 trillion to US$84.9 trillion in 2020, with almost every single nation named in top 100 feeling the significant effects of the pandemic on their economies.
David Haigh, CEO of Brand Finance stated, “The downward trend of nearly all the world’s most valuable nation brands is unsurprising given the year we are currently experiencing. With COVID-19 contributing to the recent rise of protectionism, we may see a reversal of the economic growth brought about by globalisation. Having said that, optimism has certainly prevailed, with forecasts looking less dire than initially predicted, and with the announcement of a working vaccine beginning to be rolled out, the future is certainly looking brighter.”
The US and China remain in the lead
The US and China have continued to stay ahead of the other nations, coming in the first and second positions and recording brands values of US$23.7 trillion and US$18.8 trillion respectively. Relations between these two leading nations has continued to remain fragile due to the US-China trade war that has consumed their economies over the last few years. The US, long-standing leader, has noted a 14% brand value loss amounting to US$23.7 trillion in 2020, which marked yet another turbulent year for the nation. Since it has been hit with the COVID-19 pandemic, it has become the nation with the most deaths and cases in the world. As the strongest and largest economy in the world, it also continues to draw harsh criticism worldwide. Following one of the most contested presidential races in American history that saw Joe Biden emerge as the winner last year, the US has seemingly begun charting a new course under Joe Biden by pursuing different policies than that of the former president, Donald Trump.
Despite the political uncertainty, the US’s dominance and worldwide success will always provide the nation’s reputation and economy with a strong safety net. The four large American companies – Amazon, Google, Apple and Microsoft – have claimed four out of the five top spots in 2020’s Brand Finance Global 500.
China, the other country that has also remained ahead, has managed to keep its brand value largely stable, only noting a 4% marginal drop last year. The Chinese government has reacted very quickly to the COVID-19 outbreak and combined with its targeted stimulus measures taken last year, it has allowed them to become the first major economy to recover quicker and sooner than any other nation from the pandemic. Additionally, it was expected to be the only G20 economy to grow in 2020.
David Haigh stated: “We are once again witnessing China inch ever closer behind the US in our ranking of the world’s most valuable nation brands. This year has proven that there is nowhere to hide when it comes to a nation’s economic performance and China has shown its ability to recover at a meteoric pace – providing a beacon of hope that recovery can happen on the global stage too.”
Top 10 nations record 14% brand value loss
The pandemic has been severely affecting nation brand values across the world in 2020. The top 10 nations have noted a brand value loss of 14% on average. Japan has performed relatively better, noting a 6% brand value loss of US$4.3 trillion, and taking the third spot among the top 10 rank. Japan in 2020 was expected to fare worse as one of the greatest hit nations due to the pandemic due to its neighboring China, its densely population cities and elderly population. However, Japan has emerged relatively unscathed and successful with a low case and death count.
Ireland only nation in 2020 to record a positive brand value growth
Ireland in 2020 became the sole nation in the top 20 to record a brand value growth of up to 11% to US$670 billion. This growth has been largely due to this nation being impacted less dramatically than others on the world stage. This has given them quite a positive position given the double threat of Brexit and COVID-19. The Irish economy has also been shown to be incredibly resilient by garnering strong exports and consumer spending. Since a Brexit deal was reached in December 2020, this has placed Ireland in an even more favorable position as it will face less trade disruption with the UK.
David Haigh, CEO of Brand Finance said, “The luck of the Irish is at work yet again, as the nation mitigates the risks and limits the impact of both COVID-19 and Brexit. Backed by a vibrant and resilient economy, Ireland’s strong nation brand reinforces the Emerald Isle’s perception as a preferred investment destination even in times of crisis.”
The UK maintains fifth in the top 10 brand value ranking
The UK has retained fifth in the ranking following a 14% brand value decrease to US$3.3 trillion. Despite COVID-19 becoming the prime problem compared to Brexit last year, there was still quite a lot of uncertainty that revolved around the outcome.
David Haigh made the following comment concerning Brexit: “As the UK entered the final weeks of Brexit negotiations before the transition period deadline at the end of 2020, the nation was certainly at a turning point. There is a great opportunity for Britain to become an economy that operates similar to its neighbour, Ireland – with lower taxes and a friendly ecosystem for startups. Since the UK reached a suitable trade deal, Brand Britain could certainly thrive and become the entrepreneurial hub off the coast of Europe as Singapore is in Asia.”
Vietnam fastest growing nation brand of 2020
Vietnam defied the global trend and became the fastest growing nation brand of 2020 with its brand value having risen substantially by 29% to US$319 billion. Vietnam recorded a significant low number of COVID-19 cases and deaths last year and emerged as one of the top locations in Southeast Asia for manufacturing. Vietnam has also become attractive to investors, especially from the US, that are seeking to move their China operations as a result of the US-China trade war fallout.
Argentina records fastest decline in brand value last year
In direct contrast to Vietnam, Argentina has noted the largest fall in brand value in 2020, down 57% to US$175 billion. Since reaching 1 million COVID-19 cases last year, Argentina has continued to struggle to respond effectively to the crises. Several riots also broke out last year across the nation demanding a reform of the justice system, corruption cases to be looked into and to show the poor handling of the outbreak. The nation’s already fragile economy has been taking further hits, which means that it will take longer for the Argentinian economy to recover.
Germany is the world’s strongest brand nation value
In addition to measuring nation brand value, Brand Finance also determines the relative strength of nation brands through a balanced scorecard of metrics that analyse brand investment, brand equity and brand performance. Also, for the very first-time last year, the nation brand strength methodology also took into account the results of the Global Soft Power Index. The Global Soft Power Index is the world’s most comprehensive research study carried out on nation brand perceptions. The study included the opinions of more than 55,000 people from more than 100 countries.
According to the criteria set out by this research study, Germany is the world’s strongest nation brand with a brand strength score of 84.9 out of 100. This particular European nation has long been known for its robust and stable economy and for being well-governed. Angela Merkel’s long time in office as Chancellor has provided Germany with a good presence against the backdrop of unstable and erratic counterparts. Germany’s response to the COVID-19 outbreak has been generally well received domestically and internationally. They have also consistently recorded lower cases per million than any other Western European nation.
David Haigh, CEO of Brand Finance, commented: “Germany remains a beacon of stability both across the continent and globally. As Merkel prepares to step down as Chancellor in 2021 – a position she has held since 2005 – Germany will be hoping that its history of reliable leadership during times of increasing polarisation across Europe will stand it in good stead in the coming year as the nation works towards a post-COVID recovery.”
Source: Brand Finance