5 February 2016

Disney is the world's most powerful brand: Brand Finance Global 500 2016

· Four of the 10 fastest growing brands are Chinese

· Disney is the world’s most powerful brand, thanks to Star Wars’ record-breaking success

· Despite slowing sales, Apple is the world’s most valuable brand, up 14% to US$145.9 billion

· Volkswagen brand value falls by US$12 billion following emissions scandal

· Strongest brands’ shares outperform the S&P 500 average

Brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test annually, determining which are the most powerful* and which are most valuable in its Brand Finance Global 500. For 2016:

Source: Brand Finance. The World's Most Powerful Brands, top 10.
Source: Brand Finance.

Disney in hyperdrive

Disney is the world’s most powerful brand, Brand Finance reveals, the result of acquisitions and the brands under its control. "ESPN, Pixar, the Muppets and Marvel are all now Disney owned, but perhaps its most important acquisition of all has been Lucasfilm, and thus Star Wars," Brand Finance notes.

Brand Finance has estimated the value of the Star Wars brand to be US$10 billion, buoyed by the performance of Star Wars Episode VII: The Force Awakens and Star Wars toys.

Lego loses lead

Lego has lost its position at the top of the power branding table, rocked by a fine from German regulators for attempting to prevent retailers from discounting its products. It was also accused of colluding in censorship for trying to prevent dissident Chinese artist Ai Wei Wei from using Lego in his work (Lego has since reversed its policy of restricting purchases to be used for political ends). It is currently No. 2 on the value rankings.

Source: Brand Finance. The World's Most Valuable Brands, top 10.
Source: Brand Finance.

Using its Brand Strength Index assessment, Brand Finance also determines a royalty rate for each brand, which is then applied to revenue information to calculate the brand’s value.

Apple maintains leadership

In terms of brand value, Apple is top. Brand value is up 14%, thanks to the success of the iPhone 6 and recently-released iPhone 6s. Revenue for Q4 of the fiscal year 2015 was a record-breaking US$51.5 billion with profits at US$11.1 billion while revenues for the year were US$233.7 billion. Brand Finance says that with 74.8 million handsets sold in the last quarter in a saturated market, and Apple Pay beginning to generate traction, "assertions that Apple has gone rotten are premature".

Eight of the world's top 10 most valuable brands are technology or cloud-related. Google is No. 2, Samsung is No. 3, and Amazon is No. 4. Microsoft is in No. 5 place, Verizon is No. 6, and AT&T is No. 7. The 9th and last tech brand in the table is China Mobile.

Vokswagen (VW) in reverse

VW is one of the year’s worst-performing brands, dragged down by revelations that it programmed its diesel vehicles to activate their optimal emission-reduction settings only when being tested and that, driven under normal conditions, they would emit up to 40 times the more nitrogen oxide. Brand value is down by US$12 billion, to US$18.9 billion leading to a fall in rank from 17th to 56th.

Emirates is world’s most valuable airline brand

Emirates said its brand value grew 17% over last year to reach US$ 7.7 billion, and that it has risen up the ranks for the fifth year running to be placed at No. 171, 47 places above the next closest airline brand. Emirates’ brand value has more than doubled since 2009, when it first appeared on the Brand Finance Global 500 report.

Boutros Boutros, Divisional Senior Vice President Corporate Communications, Marketing & Brand for Emirates said: “We invest strategically in building our brand and it is reflected in everything we do. We have differentiated the Emirates brand not only through our marketing and sponsorship initiatives, but also through our competitive combination of quality products and services, and technology-driven customer initiatives that our teams deliver everyday both on the ground and on board. We work hard to identify, anticipate, and meet the ever-changing needs of our diverse global audiences, as we firmly believe that this will position us to outperform in our industry now and in the future.

Brand Finance CEO David Haigh said: “Emirates continues to soar, adding 17% to its brand value this year. Brand Finance’s analysis shows that Emirates is more popular than ever– its brand equity scores for consumer factors such as familiarity, consideration, preference, satisfaction and recommendation are up across the board. Emirates’ growth this year, which builds on impressive historic trends, suggests that by 2020 it could become the first Middle Eastern brand to enter the top 100 of our ranking."

China’s fantastic growth

Four of the top ten fastest-growing brands are Chinese, Brand Finance says, highlighting WeChat and Evergrande Real Estate as two of them. WeChat's user base grew over 40% between late 2014 and late 2015 and is now over 650 million, with 70 million outside China. While it is often compared to WhatsApp, WeChat goes beyond messaging to offer videogaming and payment services. Brand value is up 83% to US$6.5 billion.

Evergrande Real Estate is the fastest growing brand this year, having added 112% to its brand value between 2015 and 2016. It is now rated No. 375 in brand value, and was not in the rankings in 2015. Brand Finance notes that the presence of a real estate brand at the top of the list could be "grist to the mill of those claiming that China’s property market is overheated and its economy as a whole set for a shock".

A number of Chinese brands have joined the most valuable brand ranking from being unplaced last year: Dalian Wanda Commercial Properties at No. 264 in value; Shenzhen Development Bank (No. 269, now called Ping An Bank), Poly Real Estate (No. 305), China Everbright Bank (No. 345), China Railway Group (No. 359, abbreviated to CREC), Air China (No. 364), China Railway Construction Corporation (no. 394, abbreviated to CRCC), Netease 163.com (No. 430), a gaming company which also provides the 163.com information portal; China Eastern Airlines (No. 464) and Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance solutions (No. 489).

Brand Finance rankings are a better measure of future share price

In December of 2015 Brand Finance took a retrospective look at the share price of the world’s most valuable brands and the subsequent stock market performance of the businesses that own them. The findings suggest that highly branded businesses and those with strong brands can outperform the market.

Between 2007 and 2015, the average return across the S&P was 49%. However by using its data, investors could have generated returns of up to 97%, Brand Finance said. Investing in companies with a brand value to enterprise value (BV/EV) ratio of greater than 30% would have generated returns of 94%. Investing exclusively in the 10 companies with the highest BV/EV ratios would have resulted in a 97% return.

More than a hundred (115) of the top 500 brands in the 2016 list fall into the same category, Brand Finance notes. The selection includes luxury goods businesses that one might expect to be highly branded such as Burberry, Gucci and Ralph Lauren, well-known consumer brands such as Audi, Land Rover, Dove, Ikea and Nestle, but also financial and B2B brands such as Korea's Shinhan bank and Fujitsu.


View the Brand Finance Global 500 2016

Read the WorkSmart Asia blog posts on Wanda's hotel launches in Inner Mongolia and Chengdu, China

Read the WorkSmart Asia blog posts on Emirates' expansion of flights to Istanbul, Turkey and Ningxia as well as Henan in China

Read the TechTrade Asia blog post on Netease and its vision for gaming

*Based on factors such familiarity, loyalty, promotion, marketing investment, staff satisfaction and corporate reputation. Read about the methodology