The world’s biggest companies are set to lose up to US$1tn in brand value as a result of the Coronavirus outbreak, with the aviation sector being the most affected, according to the latest analysis by Brand Finance, the world’s leading independent brand valuation consultancy.
Brand Finance has assessed the impact of the COVID-19 outbreak based on the effect of the outbreak on enterprise value, as at 18 March 2020, compared to what it was on 1st January 2020. Based on this impact on enterprise value, Brand Finance estimated the likely impact on brand value for each sector. Each sector has been classified into 3 categories based on the severity of enterprise value loss observed for the sector in the period between 1st January 2020 and 18th March 2020.
David Haigh, CEO of Brand Finance, commented:
"The COVID-19 pandemic and its impact on global markets is very real. Worldwide, brands across every sector are braced for the Coronavirus to massively affect their business activities, supply chain and revenues in a way that eclipses the 2003 SARS outbreak.
Now is the ideal moment for Qatar’s brands to remain ever present in their stakeholders’ minds, engage across digital channels and show resilience and adaptability in these unprecedented times.”
Qatari banking brands dominate
Brand Finance today released the Middle East 50 report on the Middle East’s top 50 most valuable and strongest brands, which features 9 Qatari brands, of which 5 are banks.
As the biggest lender in the region, QNB (up 20% to US$6 billion) has expanded its portfolio to pursue new markets, with a notable strategic focus on South East Asia. The Group’s strong financial performance and growing international footprint extends to more than 31 countries, where it provides a comprehensive range of advanced products and services. Beyond the financial sector, QNB plays a key role in sporting sponsorships, such as the 2022 FIFA World Cup. The Bank also supports Qatar on its path to self-sufficiency, across areas such as tourism, logistics and manufacturing.
3 notable new entrants this year are Commercial Bank (US$463 million), Masraf Al Rayan (US$450 million) and Doha Bank (US$443 million) – a testament to the growth of Qatar’s banking sector.
David Haigh, CEO of Brand Finance said:
“The harsh reality is that many Qatari brands may not make their 2020 targets due to the challenges presented by the Coronavirus outbreak. This is why having a strong brand is now more crucial than ever, as it is this resilience which will truly help to weather the storm and bounce back from this crisis.”
Qatar Airways braced for COVID-19 challenges ahead
Assessed as the hardest hit sector under COVID-19 are airlines, leisure and tourism, aviation, aerospace and defence. While a large number of major airlines have grounded most of their fleets, Qatar Airways (up 10% to US$2.3 billion) has increased capacity by adding extra seats from its hub in Doha to operate repatriation flights to Paris, Perth and Dublin. It is using its A380 fleet for flights to Frankfurt, London Heathrow and Perth while adding charter service to Europe from the US and Asia.
As he prepares to confront a crisis unlike anything ever seen before in the airline industry, Qatar Airways CEO Akbar Al may need to turn to Qatar’s government for support. Given this strong government support, its strong brand, combined with its active airline shareholdings, Qatar Airways is well poised to bounce back from the COVID-19 turmoil.
QNB is strongest brand in Qatar
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, QNB is Qatar’s strongest brand with a Brand Strength Index (BSI) score of 81.7 out of 100 and corresponding AAA- Brand Rating.
Ooredoo in midst of successful transformation
Telecoms brand Ooredoo, active in more than 9 countries such as Indonesia, Kuwait, Myanmar, Maldives, Algeria, Tunisia, has this year achieved a brand value of US$3.6 billion, down 6% compared to last year. The business is successfully transforming itself from the traditional voice focus to digital revenue streams with data now accounting for 50% of group revenues. The brand has also invested heavily in new technologies such as 5G in line with Vision 2030 and the current behavioural shift of consumers to work remotely is expected to have a positive impact on the brand in the short to medium term.
The Ooredoo brand is active in more than 9 countries Indonesia, Kuwait, Myanmar, Maldives, Algeria, Tunisia, this year has achieved a brand value of US $3,557, down 5.9% versus last year.
There is an opportunity for the brand to capitalise on this increased usage of data to increase the relevance of the brand amongst consumers, for example by offering an enhanced offering of its digital services. The brand is very strong with a Brand Strength Index (BSI) score of 77 out of 100; its global partnerships with Lionel Messi and PSG playing a key role in building brand strength across its varied markets.
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.
Brand Finance has assessed the impact of the COVID-19 outbreak based on the effect of the outbreak on Enterprise Value, as at 18/03/2020 compared to what it was on 1st January 2020. Based on this impact on Business Value, Brand Finance estimated the likely impact on Brand Value for each sector. Each sector has been classified into 3 categories based on the severity of Business Value loss observed for the sector in the period between 1st Jan 2020 and 18th March 2020.