We have the perfect storm to reposition the Spain brand, according to Brand Finance
- The Spain brand loses 28% of its value according to the latest Country Brand Report (Nation Brands 2020) by Brand Finance.
Injection of optimism for the Spain Brand: The Pfizer and Biden vaccine could encourage national and international consumption of our products and increase the presence of our brands outside our borders.
- The Top 100 National Brands in the 2020 Brand Finance Nation Brands rankings lose € 11 trillion of brand value in 2020 as they battle the COVID-19 pandemic.
China continues to close the gap with the US leader. The Asian rival already has a brand value of 16.9 billion euros while the United States remains the most valuable country brand in the world with a value of 21.4 billion.
- The top 10 most valuable country brands reduce their value by 20% on average. Japan in third position this year, emerging relatively unscathed from the pandemic.
Emerging as a haven for manufacturing in Southeast Asia, Vietnam defies the global trend and increases its country-brand value by an impressive 16%. On the opposite side, Argentina is the national brand that loses the most value in the ranking, its brand value is already 61%.
- Data from the Brand Finance Global Soft Power Index, which looks at the soft power or influence of nations globally, has been included in the Brand Strength (BSI) ranking for the first time, meaning This year, the ranking also takes into account global perceptions about nations. With this, Germany, a nation admired for its strong and stable leadership, possesses the strongest national brand in the world, with a Brand Strength Index score of 84. 9 out of 100.
Madrid, November 12, 2020.- The country brand Spain has lost 28% of its value according to the latest Country Brand Report 2020 (Nation Brands) of Brand Finance, the leading independent intangible valuation consultancy whose rankings comply with the ISO 10668 and ISO 20671 of brand valuation and evaluation respectively and that contributes with its brand value database to create one of the indicators of the UN Global Innovation Index (GII). With a country-brand value 465 million euros less than in 2019, Spain remains at the gates of the top 10 of the most valued country-brands in the world, led by the United States with 21.4 billion euros. Everything seems to indicate that we are at a key moment. Do we have the perfect storm to be able to reposition the Spain brand?
The country brand Spain was in 2019, 80% higher than the 0.802 billion it had in 2015. The context that our country has experienced during the last year, being one of the most economically and health-impacted by COVID19, has been a key factor for the reduction of the image of our country inside and outside our borders.
Teresa de Lemus, Managing Director of Brand Finance Spain: “In a global market, the country brand is one of the most important assets of any state, and in what we need most now, it encourages internal investment, and adds value to exports. Teamwork between government and company is crucial to achieve a win win in a situation like the one we are experiencing. ”
Top 10 Country Brands + Spain
|Ranking 2020||Ranking 2019||Marca-País||Valor Marca-País 2020||Valor Marca-País 2019||% Variación|
|10||9||Corea del Sur||1.530||2.135||-28%|
* Country-brand value visible only for the first 10 positions in the ranking
The pandemic has affected Spain more than most European countries, both in human and economic terms. The great dependence of Spain on tourism, as the tractor sector of our economy, has made the country particularly affected. However, not being the only one who has had to learn by trial and error gives her the opportunity to come out stronger as well as to take advantage of a rebound and growth to increase 7.2% in 2021. With the recent announcement of a Possible vaccine, which is expected to have a high success rate, it is possible that the country could recover and achieve even faster growth.
Teresa de Lemus, Managing Director of Brand Finance Spain: “At Brand Finance we have identified several levers that we could activate so that Spain can balance its dependence on tourism and position its brand wherever it will bring more return.”
Spain remains at the gates of the top 10 in country-brand
Spain maintains its position number 11 in the ranking of the 100 most valuable country brands in the world with a value of 465 million euros lower than in 2019. Considering that only 25 countries manage to overcome the 500 billion barrier and only 12 the Of the 1,000 billion euros, maintaining the eleventh position is quite an achievement for the managers of our country brand in the current context, but it will require efforts and concrete actions to reverse the trend.
The head of the ranking undergoes considerable changes. The United States leads the ranking for another year, although the distance that separates it from the voracious China decreases since it loses -23% of its value while China only reduces it by -13%. The top ten country brands in the ranking decrease in value by 20% compared to 2019, with India and Germany being the most disadvantaged of the top 10, losing -29.
However, in the same context and period of time, there are countries that have played their cards well. Vietnam climbs 9 places in the ranking (from 42nd to 33rd) after increasing its country-brand value by 16%. Other notable increases are Uzbekigstan (8.3%), Ethiopia (7.4%) and Pakistan (4%).
In contrast, the Argentine country brand is the one that has been most affected with a resounding 61% drop, reducing its value by more than half and dropping 12 positions in the ranking. It is followed by other significant decreases such as that of Qatar (45%), Costa Rica or Chile (40%).
Biden is expected to improve trade relations with Spain and facilitate the export of our brands and products so that all together we can get out of this pandemic and economic crossroads in which we find ourselves.
While the outgoing president has opted for a more isolationist international policy and has called into question issues such as NATO’s work, international cooperation or trade relations, Biden is expected to return the United States to the international scene. On the agenda, which will start in January 2020, there are several pending issues related to Spain: trade tariffs, defense spending and the future of military bases.
Next May, the renewal of the Defense Cooperation Agreement between Spain and the United States is scheduled, which affects the Spanish bases of Rota (Cádiz) and Morón de la Frontera (Seville). Another obstacle to overcome is the dispute over the tariffs that the Trump Administration imposed on Spanish products, making them more expensive by up to 25% in price.
The Trump government announced last August that it would maintain the tariffs it imposed on the EU in 2019 for products such as wine, oranges, cheese or oil. Joe Biden’s victory gives hope to the Spanish food sector (especially olive and wine), infrastructure, pharmaceuticals and energy, especially solar energy. On the other hand, they also foresee lower military spending and greater public investment in infrastructure, in addition to carrying out the decarbonization of the US energy network.
Teresa de Lemus, Managing Director of Brand Finance Spain: “Ibex35 companies such as Iberdrola, Acciona and Siemens Gamesa will be able to benefit from the new opportunities that this change of government generates. In the same way, increases are expected for the construction companies ACS and Ferrovial, with strong presence in the US market Viscofán, Inditex and Grifols complete the list of leading Spanish companies that have, in the coming years, the opportunity to gain presence and take the Spain brand to the most influential country in the world. ”
We must make it easier for our companies to grow
In February 2020, before the pandemic began, in Spain we only had about 5,000 large companies in our business fabric. In other words, more than 99% is made up of SMEs. Teresa de Lemus, Managing Director of Brand Finance Spain: “The Spain brand benefits many entrepreneurs who are now suffering to stay afloat. It is an intangible for everyone and for everyone”
GDP is expected to decline by -12. 8% according to the IMF (October), worse than expected in April. If we look at the picture of European economies, we see that Spain is the EU country that will suffer the greatest collapse, more than Italy, whose GDP will fall by -9.9%; Portugal -9.3% and Croatia -9.6%. Teresa de Lemus, Managing Director of Brand Finance Spain: “Although we need our dose of optimism, we must not ignore that our economy is in check, our companies damaged and hundreds of thousands of jobs in the process of destruction. Every crisis comes with an opportunity, every storm is followed by calm. ”
Monumental loss of value of country brands
The world’s 100 most valuable national brands have suffered a monumental loss in their brand value due to the COVID-19 pandemic, amounting to € 11 trillion, according to the latest report by the world’s leading brand valuation consultancy Brand Finance. . 2020 has put the world’s nations to the test, from shocks to economies from COVID-19 on nations’ GDP forecasts, inflation rates, and overall economic uncertainty, to declining long-term prospects. term.
The Brand Finance Nation Brands 2020 report estimates that the total brand value of the top 100 national brands fell from € 83 trillion ($ 98 trillion) in 2019 to € 71 trillion ($ 84.9 trillion) in 2020, with a significant impact of the health crisis in almost all nations and in their respective economies.
Teresa de Lemus, Managing Director of Brand Finance Spain: “The downward trend of almost all the most valuable national brands in the world given the year we are currently experiencing is not surprising. We run the risk of an emerging and growing protectionism causing a reversal in the forward-looking globalization that has contributed to a prosperous global economy in recent years. That said, optimism has certainly prevailed, with forecasts that seem less dire than initially anticipated, and with the recent announcement that a working vaccine will begin to implemented, things are certainly looking up. ”
The United States and China play in another league
The United States and China continue to be well above the rest of the country brands in the ranking. In first and second position in this year’s rankings, they register brand values of 21.4 billion euros and 16.9 billion euros respectively. Relations between the two nations remain particularly fragile due to the trade war that has consumed both economies in recent years.
The undisputed leader is the United States. It has posted a -23% loss in brand value after another turbulent year. The nation, now home to the majority of virus cases and deaths worldwide, the world’s largest and strongest economy, continues to meet harsh criticism and is questioned on the global stage. With Biden announced as the winner of the 2020 presidential election, in one of the most controversial and polarizing races in American history, the future of the nation will undoubtedly look very different from that of the incumbent president.
Despite this political uncertainty, the dominance and success of US brands globally will always provide the nation’s economy and reputation with a strong safety net. US brands Amazon, Google, Apple, and Microsoft took four of the top five spots on the Global Brand Finance 500 for the year.
Unlike the US, China’s brand equity has managed to remain largely stable, registering just a modest 13% drop this year. The Chinese government’s rapid response to the COVID-19 outbreak, along with its targeted stimulus measures in recent months, has resulted in the nation becoming the first major economy to recover from the pandemic and is currently expected to be the the only G20 economy to grow this year.
Teresa de Lemus, Managing Director of Brand Finance Spain: “Once again, we see China increasingly close to the US in our ranking of the world’s most valuable country brands. China has demonstrated its ability to recover from a meteoric pace, providing a beacon of hope that recovery can also occur on the global stage. ”
The Top 10 nations reduce their brand value by 20% on average
With the pandemic wreaking havoc on country brand values around the world, the top 10 have seen a 20% loss in brand value on average. Japan has fared relatively better, posting a modest brand equity loss of 15% (country-brand value of € 3.8 trillion). Defying the odds of many who expected the nation to be one of the worst hit at the start of the coronavirus outbreak, due to its proximity to China, its densely populated cities, and growing elderly population, Japan has become a case of success registering the lowest numbers of infected and deaths from coronavirus and with its much healthier economy.
Ireland has weathered the negative trend this year as the only national brand in the top 20 with its brand equity intact (0% growth). This strong performance is, in large part, attributable to their forecasts looking less dramatic compared to others on the global stage, a particularly positive position given the dual threat of Brexit and COVID-19. The Irish economy has proven to be particularly resilient, supported by strong exports and continued consumer spending. If the UK reaches a Brexit deal, Ireland will be in an even stronger position as the disruption to trade with the UK is reduced.
UK, in the final stage of Brexit, retains fifth position
The United Kingdom has retained the fifth position, after a drop in brand value of -22% that leads to value its country brand at 2.9 billion euros. Despite Brexit being overshadowed by COVID-19 this year, the uncertainty surrounding the ultimate impact has persisted. The UK government is still involved in negotiations over fishing rights and competition rules, two sticking points for both parties.
Teresa de Lemus, Managing Director of Brand Finance Spain: “As the UK finalizes the Brexit negotiations, the nation is at a tipping point. Britain has a great opportunity to develop into an economy that functions in a similar way to its neighbor, Ireland, with lower taxes and a friendly ecosystem for start-ups. If the UK were to strike a good trade deal, the country-brand could certainly prosper and become the business hub off the coast of Europe, already that Singapore is in Asia. ”
What is the key to the success of the fastest growing country brand? Vietnam defies world trend by increasing its country brand by 29%
Vietnam is the national brand that has grown the most in this year’s ranking. Its brand value soared 16% to $ 288 billion. Vietnam, with staggeringly low COVID-19 cases and deaths, has become one of the top locations within the Southeast Asia region for manufacturing, becoming an increasingly attractive destination for investors, particularly from the US – trying to relocate the operations it had with China – in the aftermath of the US-China trade war. Recent trade agreements with the EU are further supporting the nation’s growth.
Cry for me Argentina
In stark contrast, Argentina has seen the biggest drop in the value of the country brand this year. A dramatic decline of 61% reduces their brand value to 158 billion euros. With COVID-19 cases surpassing the 1 million barrier, the smallest nation by population to reach this number, Argentina has been struggling to respond to the pandemic. Unrest has broken out across the country with protesters calling for a reform of the judicial system, for corruption cases to be investigated and for society on the streets complaining about the management of the pandemic. The nation’s economy, already in crisis, is receiving new and severe blows and the road to recovery will not be short.
Germany owns the strongest national brand in the world
In addition to measuring the value of the country-brand, Brand Finance also determines the relative strength of national brands through a balanced scorecard of metrics that evaluate brand investment, brand equity, and company performance. brand. For the first time this year, the country brand strength methodology includes the results of the Global Soft Power Index, the world’s most comprehensive research study on the perceptions of national brands, which has been conducted by surveying more than 55,000 people and in more than 100 countries. By these criteria, Germany is the strongest national brand in the world with a brand strength score of 84. 9 out of 100 and a AAA rating.
Teresa de Lemus, Managing Director of Brand Finance Spain: “Germany remains a reflection of where to look, in Europe and around the world. As Merkel prepares to resign as chancellor in 2021, a position she has held since 2005, Germany will hope that his history of reliable leadership in times of increasing polarization in Europe and the strength of his country-brand will help him in the year ahead as the nation works toward a post-COVID recovery. “