The Brand Finance Middle East 50, the definitive list of the Middle East’s top 50 most valuable brands produced by brand valuation and strategy firm Brand Finance, is now in its sixth consecutive year. Brand Finance’s results for this year show that the Middle East’s top brands have grown by an average of 38%. This brings the total value of the top 50 above US$50 billion for the first time. This year’s huge growth rate is in marked contrast to last year’s meagre 5% and is also the largest one year leap in total brand value since Brand Finance began compiling the figures in 2009.
The Brand Finance Middle East 50 has long been dominated by the UAE and Saudi Arabia. Last year, brands from the two countries accounted for 70% of total brand value. This year the power of the duopoly seems to have been strengthened, with the figure having risen to 77% of the total. This helps to explain such a strong overall performance in the face of accelerating political tension in the region, with Gulf economies seemingly insulated from the ongoing problems in the wider Middle East.
Saudis Take the Crown
Though Saudi Arabia and the UAE have always been close to parity in terms of total brand value, the UAE has always managed to stay ahead since the inception of the Middle East 50. However 2014 sees Saudi Arabia move ahead for the first time. Both countries have 16 brands in this year’s table, but while those from the UAE come in at US$19.1 billion, the Saudi brands total US$19.7 billion.
In the battle for third, Qatar continues to hold off Kuwait. In 2010, the total value of Kuwaiti brands in the table was nearly double that of those from Qatar. However the continuing dominance of KSA and the UAE, along with the assertive and particularly successful brand building of the Qataris has seen Kuwait’s percentage share of total brand value continue to fall; it now stands at 8%.
Other countries have also lost ground in the race to establish themselves as brand leaders. Last year Egyptian brands featured in the list for the first time, with four new entries. With the political situation still stabilising, two of these has fallen out of the table and Egypt’s share of the total has fallen. Orascom has been rebranded under the Vimplecom name while weaker revenue forecasts are the reason for Mobinil’s absence this year. Bahrain no longer features in the table at all as Ahli United Bank, Batelco and Al Baraka have all dropped out this year.
Emirates Flying High but Competitors Now on the Radar
One accolade that the UAE can still boast of is having the Middle East’s most valuable brand. Emirates has always held the top spot and remains far ahead of both global competitors in the airline sector and brands of any kind from the Middle East. Its 2014 brand value is US$5.5 billion, making it the first and only brand from the region to be worth in excess of US$ 5 billion.
It is not just valuable however. It is also the only brand on the list to have a AAA brand rating. The brand rating is calculated using Brand Finance’s Brand Strength Index which is a benchmark of a brand’s power, stability and future potential, similar to a credit rating. Emirates’ vast sponsorship portfolio is partly responsible for its branding success. Adding Real Madrid to an already long list of sponsored football clubs was alleged to have cost upwards of €30 million a year, but it has begun to pay off immediately, with a Champions League win guaranteeing maximum exposure and prestige. Existing deals with the likes of Arsenal, PSG and A.C. Milan make Emirates the game’s most prolific club sponsor, while the World Cup has provided another platform, with Emirates flight attendants presenting a victorious Germany with the trophy itself.
Until this year Emirates was the only airline brand to feature in Brand Finance’s list, 2014 sees two additions however, both of which appear to be following Emirates’ approach to brand building. Etihad comes in at number 14 with a brand value of just over US$1 billion. Etihad is now almost synonymous with Premier League Champions Man City and has also followed Emirates into F1 sponsorship, in particular at the Abu Dhabi Grand Prix. Qatar Airways is this year’s highest new entry; it is 7th in the list with a total brand value of US$1.8 billion. It supports stars and teams across a number of sports including cycling, tennis but also football, most notably FC Barcelona. The 2022 world cup will guarantee a significant spike in demand and boost to the brand’s profile, so it will be hoping that recent controversy over corruption dies down and the tournament goes ahead as planned.
STC – Top of the Telcos
This year’s biggest winner in terms of total brand value added is STC. The telecoms giant has added US$1.7 billion in brand value to reach a total of just under US$5 billion. Though Emirates is safe at the top for now, STC has emerged as the only serious rival for the title of the Middle East’s most valuable brand. Telcos continue to dominate the top five, with Etisalat and Mobily taking thirs and fourth place respectively. Following its well-publicised rebrand, Qtel no longer appears in Brand Finance’s list. Its successor Ooreedoo appears for the first time at 15th, with a brand value of US$958 million.
QNB and Al-Rajhi in Battle of the Banks
Banks have maintained a strong presence in this year’s table, accounting for 30% of the total top 50 brand value of the top 50. QNB is the Middle East’s most valuable bank brand, with a total value of US$1.8 billion, having added over half a billion dollars in brand value. QNB’s nearest competitor, Al-Rajhi Bank, has risen even faster however, adding US$533 million to reach a total of US$1.72 billion.
Overall brand value growth of 38% for the Middle East shows that the region is realising its potential, fast. However the average brand value to enterprise value ratio for Middle Eastern brands (which shows the proportion of a company's value attributable to brand) stands at just 10%. The global average is 16%, suggesting there is ample opportunity for further brand growth.
Strategic, high value sectors such as Telecoms and Banking (which together account for 62% of total brand value) are critical for overall economic growth and development and continued focus and attention must be paid to them. However other sectors such as chemicals, foods, retail, real estate & engineering (which account for approximately 16% of the overall brand value) could potentially benefit even more from increased brand related investments. Afai is a pioneer in this regard; its US$2.4 billion brand value is an impressive 28% of the company value, showing that it is punching above its weight relative to competitors.
As political turmoil intensifies in some parts of the Middle East and North Africa, value may continue to be consolidated in the relative safety of Saudi Arabia and the UAE. However, as the inclusion of brands from all over the region attests, this need not be the case; the Middle East’s brands are prospering more than ever.