Bric brands bulk up

By bne IntelliNews May 25, 2010

Tim Gosling in Moscow -

Russia's two biggest telecommunications companies are head and shoulders above their compatriots when it comes to brand value.

Millward Brown Optimor's 2010 BrandZ Top 100, a ranking released in April that identifies the world's most valuable brands measured by their dollar value, contains only two Russian companies - Mobile TeleSystems (MTS) and VimpelCom - both of which are in the telecom sector.

Despite adding 6% to its brand value to bring it to $9.7bn, MTS slipped one place in the overall ranking to number 72. VimpelCom's Beeline, on the other hand, saw its brand value shed 8% to finish at $8.2bn overall, dropping 20 places to 92nd spot. The irony is that Beeline had been neck-and-neck with MTS for the title of Russia's top brand throughout recent years, time during which VimpelCom was virtually paralysed by arguments between its shareholders. Since they reached a provisional deal toward the end of 2009, the brand has slipped dramatically. With Vodafone occupying 10th spot on the list, Russian oligarch Mikhail Fridman has a long way to go before his VimpelCom becomes the "Vodafone of the east."

Elsewhere, it's notable that Gazprom (brand value $6.35bn), although rated the most profitable company in the world in April, doesn't make the top-100 list. That omission is presumably down to the poor image of the Russian state in the West, with Gazprom often providing the country's commercial face to the world. That said, a lack of downstream operations likely also plays some part. At the same time, according to Russian daily Vedomosti, concerns over technology, innovation, safety and investor attractiveness weighed on the Gazprom brand as well - factors that hurt Russia's largest oil firm Lukoil ($3bn) similarly. Gazprom does, however, make it to eighth spot in the Oil & Gas Top 10, with impressive "brand momentum" pushing it up the table.

The state energy companies of other Bric nations did far better, with PetroChina debuting at number 51 and Brazil's Petrobras in at 73 with a brand value of $9.7bn. Indeed, just as similar global rankings lists have shown in the wake of the crisis, although the upper echelons remain dominated by western companies (Google is runaway leader at $114bn), the list also illustrates the growing role that the Bric consumer is playing in the world's economy. "In each of the 17 categories surveyed," the introduction of the report notes, "brands struggled with cautious spending in developed markets while enjoying a more enthusiastic reception in emerging markets."

Thirteen emerging market representatives make the list in 2010, compared with just one - China Mobile - in 2006. Sitting as high as eighth, that company leads seven compatriots in the top 100, with Bradesco bank forming a Brazilian duo with Petrobras to complement the Russian mobiles. India makes its debut with the ICICI banking group.

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