Emirates a soaraway success but Middle East brands struggle in global rankings

Only four Middle Eastern brands have made it to the top 500 brands ranking by Brand Finance. Should this mean regional firms are failures? Experts disagree, since they are now a match with major global names.

Emirates’ brand was valued at an astonishing US$7.7 billion – a 17 per cent increase on last year. Kamran Jebreili / AP Photo

Four Middle Eastern companies have been named among the world's top 500 brands: Dubai's Emirates, telecoms giants STC and Etisalat, and Qatar Airways.

That’s one more than last year. But it is still relatively few in the global ranking, compiled by the UK consultancy Brand Finance, in which more than half the brands listed are from the US, China or Japan.

So should the fact that there is one more name on the list be celebrated – or should the performance of Middle East companies be branded a failure?

Experts say this is still a “challenger” market, with its brands developing fast. But growth here is still being outpaced by giant companies in China, despite the superpower’s economic woes.

Emirates is undeniably the soaraway success story of all the Middle East’s “megabrands”.

In Brand Finance's top 500 ranking, published today, the airline's brand was valued at an astonishing US$7.7 billion – a 17 per cent increase on last year. The Qatar Airways brand value rose by 26 per cent to $3.49bn, while Etisalat registered a more moderate 4 per cent uptick. Abu Dhabi's Etihad did not make the cut, but its valuation is also believed to have increased this year.

Andrew Campbell, the managing director of Brand Finance Middle East, based in Abu Dhabi, said that Emirates had a “hugely impressive” performance in maintaining its position as both the top Arab brand, and most valuable name in global aviation.

“It’s around the whole package – it’s the advertising campaign, the sponsorship globally that they engage in, together with the quality of the service. It’s all of these things together which drive the strength of the [Emirates] brand,” he said.

But he said that one big challenge to local brands in the Middle East is that they are now competing against the strongest brands globally – thanks, partly, to the digital revolution.

"These brands that are rising – like Apple, Google, Facebook – are all global brands which are relatively easily adapted and able to get presence in the region. And that is going to be a continuing challenge for local brands," said Mr Campbell. "Because of the digital era – with so much in the cloud and online – you don't need to have much of a physical presence anywhere to be a really dominating brand."

Robert Haigh, the marketing and communications director at Brand Finance in London, said that the fact that just four Middle Eastern brands made its top 500 ranking is not necessarily a bad sign.

“The Middle East is still developing as a source of brand creation,” he said. The fact that Qatar Airways is new to the top 500 ranking this year shows things are moving “in a positive direction”.

The branding expert John Brash, the founder and chief executive of Brash Brands, which has an office in Dubai, said brands in the Middle East region are growing rapidly.

“This is still a nascent, ‘challenger’ market. In terms of branding, Europe and the [United] States have decades of heritage on us. So in that sense, for Emirates to be so high up is an amazing achievement. And I firmly believe that other Middle East brands are coming up fast behind,” he said.

Emirates is on course for that holy grail of branding: to actually transcend the product and services that it offers, added Mr Brash.

“That’s why Apple is No 1 – it represents something more,” he said. “Emirates is on that path, towards being a lifestyle brand: one that says something about travel, possibility and globalisation.”

Despite the success of Emirates, the Arab world’s low population levels – relative, at least, to massive economies like China and India – is limiting other regional brands, Mr Haigh said.

“One problem that the Middle East has is that the domestic population is very low,” he said. “It’s almost only until the [local brands] become a mass international success that they can even register within this list.”

Globally, technology companies fared well in Brand Finance’s ranking, with Facebook’s brand valuation rising 41 per cent to over $34bn. But the crash in oil prices has clearly hit energy firms, with Russia’s Gazprom suffering a massive 31 per cent decline in its valuation. And the value of the German car brand, Volkswagen, fell by $12bn following the emissions scandal, dropping from 17th to 57th place, Brand Finance said.

Seven of the world’s 10 fastest-growing brands are from China, despite the economic jitters in the country. The internet giant Alibaba, for example, racked up a 58 per cent increase in value to $17.9bn. Other not­able names include Huawei, up 70 per cent, and WeChat, up 83 per cent.

“The reason that Chinese brands are doing so well is not just because China is a massive market. Even though the economy is a bit jittery, it’s still growing at a much faster rate than western economies,” said Mr Haigh.

“It’s also because the [Chinese public] seem to interact with brands in a slightly different way. In the West – although there are brands that are very well loved – people are a bit more sceptical, they’re potentially less loyal, and there’s a greater variety of brands. Whereas in China people have a very strong attachment to brands.”

Follow The National's Business section on Twitter