Economic downturn wipes out $708b

Brand Finance reveals the impact of recession on the 500 leading global brands in its comprehensive Global 500 report.

The drop in brand value across the Global 500 for the year is US$707.8 bn or 24 percent, declining from US$2,996 bn to US$2,289 bn. Since January all sectors have been hit by commodity prices rises, the credit crunch, rising unemployment and tumbling share prices. The effective valuation date for the study, December 31, 2008, affords insight into which brands weathered the storm and which sunk.

The world's most valuable brand is Walmart with a brand value of US$40.6 bn, rose three places to replace Coca-Cola. Unsurprisingly, the US, the world's branding powerhouse, contributed 44 percent of the Global 500's total value, 29 of the Top 50 brands and the world's six most valuable brands.

However, the credit crisis is levelling the playing field and the West's position is being eroded by emerging market brands. This year there are 13 more brands domiciled in Asia in the Global 500, six fewer European brands and 17 fewer North American. The US contributed 58 percent or US$411 bn of the US$707.8 bn overall decline in brand value across the Global 500.

After an apocalyptic year for financial services, Banking is superseded by Telecommunications as the most valuable sector Top 10. While the Banking Top 10 dropped 33% in total value, the sector still provides the most brands in Global 500 with 77, followed by Retail with 57 and Telecoms with 49. CEO of Brand Finance plc David Haigh said: "This year's Global 500 shows that strong branding is the key to negotiating the downturn since customers revert to brands they trust. Walmart, McDonalds and HSBC have repositioned themselves in tough markets and are reaping the rewards.

Marketing departments must make the case to their Finance Directors to win the cash needed to keep their brand alive; cutting costs may not just be a blinkered short-term solution, it may be fatal in the long-term."

Brand Finance Lanka will shortly be releasing the Sri Lankan equivalent of the most valuable brands in Media Service's new publication 'Brands Annual' which will be out by April 25.