The 50 most valuable South Korean brands have been analysed and revealed in the Brand Finance South Korea 50 league table.
Brand Finance, one of the leading valuation and strategy consultancies, values the brands of thousands of the world’s biggest companies every year. A brand’s strength, which is assessed based on factors such as marketing investment, familiarity, preference, sustainability and margins, determines 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.
According to the analysis of Brand Finance, Samsung Electronics 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 electronics and IT 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.
Hyundai Motor’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 Motor has now announced that it will further expand its SUV range to include an electric version of one of its models, according to the Brand Finance. 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. Hyundai’s eco-friendly initiative is certainly a step in the right direction and may push its brand value and strength up in the future, analyzed Brand Finance.
David Haigh, CEO of Brand Finance, said, “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.”