· Samsung is the nation’s most valuable with a brand value of US$51.4 billion
· Samsung Fire & Marine, second fastest growing brand, is up 42% in value
· Hyundai looks to eco-friendly cars, a beneficial move for its brand value
· South Korea among top 10 most valuable nation brands in the world, following record growth
Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. A brand’s strength is assessed (based on factors such as marketing investment, familiarity, preference, sustainability and margins) to determine what proportion of a business’s revenue is contributed by the brand. This is projected into perpetuity and discounted to determine the brand’s value. The 50 most valuable South Korean brands are included in the Brand Finance South Korea 50 league table.
View the list of South Korea’s 50 most valuable brands here
Samsung comes out victorious as the nation’s most valuable and powerful brand. Its brand value is up 12% to US$51.4 billion – more than five times the value of the second most valuable brand. The consumer electronics giant predicted a near 50% jump in its fourth quarter operating profit in 2016. Its components business is expected to offset declines in its mobile unit as a result of the discontinuation of its Galaxy Note 7. The Korean won fell 8.73% against the dollar in the fourth quarter of 2016 and this, coupled with higher memory chip prices and increased volume due to greater demand, could see Samsung’s components business excel further, thus positively impacting the brand’s value.
Samsung Fire & Marine, the second fastest growing South Korean brand this year, is up 42% to US$2.7 billion. It had an impressive 2016; its operating profit rose 209% year-on-year to 362 billion won, sales rose 3.2% to 1.48 trillion won and net profit increased 213.3% to 284.9 billion won. Its brand value is, undoubtedly, partially a result of its incredible performance.
Hyundai’s performance has not fared as well as Samsung’s, in spite of the fact that the former is South Korea’s second most valuable brand with a value of US$8.8 billion, up 4% from the previous year. In 2016, the car manufacturer reported a 39% drop in the fourth quarter net profit to 1 trillion won (US$858 million), the lowest value in seven years. The company has attributed the loss to the July-September strike which resulted in increased production costs and cost Hyundai 95,400 vehicles worth of output. Furthermore, demand in its home and US market waned and sales levels suffered. Sales in the latter market may slip further in the future as President Trump could impose high tariffs on vehicles shipped into the US.
Despite the negativity, Hyundai has now announced that it will further expand its SUV range to include an electric version of one of its models. This is part of the brand’s ‘eco-development roadmap’ that will feature low and zero emission vehicles to 31 global models in total by 2020. As environmental awareness becomes more prominent, it is important for brands to embrace and implement an improved business strategy to reflect the shift. Hyundai’s proposed initiative is certainly a step in the right direction and may push its brand value and strength up in the future.
David Haigh, CEO of Brand Finance, commented: “The world’s eyes are currently on the situation in the Korean peninsula and it is vital that the value and resilience of home-grown South Korean brands is recognised. Their success has contributed to the record growth of South Korea’s nation brand. Following 43% increase this year to US$1.8 trillion, South Korea joined the club of the top 10 most valuable nation brands in the world. In a virtuous circle, corporate brands and the national image of South Korea are reinforcing each other and further add to the country’s attractiveness.”
Note to Editors
Brand values are reported in USD. For conversions into local currency, please consult the hover over the ‘i’ button on the web version of the table and select.
View the list of South Korea’s 50 most valuable brands here. Read more about the Brand Finance Nation Brands report here.