Plamen Monovski of Renaissance Asset Managers -

"...long to reign over us"

British National Anthem

The big day is upon us and few places are more abuzz in London than Fortnum & Mason, one of the longest standing purveyors to Her Majesty and the Windsor family.

Established in 1707, Fortnum's has built an extraordinary reputation for quality and service. It is famous for inventing the Scotch egg, for stocking the first cans of that English culinary classic "baked beans", supplying the team that conquered Everest in 1922 with 60 tins of quail and foie gras and a dozen bottles of champagne, and for providing empty wine boxes to Lord Carter's Tutankhamun expedition to store the antiquities, including the famous golden bust of the boy-king himself. What better place then than Fortnum's to stock up on the essentials for the upcoming celebrations - Royal Wedding Pekoe Tea, a Royal Derby porcelain Commemorative Welsh Dragon, the mandatory Royal Wedding plate, or the world-famous Royal Wicker picnic hamper?

A Royal Warrant is a treasured brand for this nation of shopkeepers. However, that allegiance pales in comparison to the loyalty that true Brits have for their most respected brand, the monarchy - a brand that has an outstanding global reach and whose current manager, Queen Elizabeth II, has stewarded with remarkable consistency, longevity and professionalism since she became queen at the age of 25 in 1952.

It would seem, though, that the British monarchy based on the hereditary principle is an offence to the nation's obsession about fair play. It is also unclear why the holder of the job - which is mainly about "blessing chrysanthemums", to quote De Gaulle, shepherding over a bunch of related eccentrics - would be a candidate for global jubilation. Yet more than 2bn people are likely to tune into what is to be the most watched event in the world.

For the British, the monarchy embodies the history and continuity of the state to a degree impossible in an elected leadership. Politicians come and go, promise and disappoint, but the monarch reigns. To the globe, in a world of uncertainty, change and diminishing trust in institutions, it is immensely reassuring to see the personification of continuity and stability.

Like the British monarchy, some brands have demonstrated an astonishing durability. The world's most valuable brand, Coca Cola, is more than 118 years old. The majority of the world's most valuable brands have been around for more than 60 years; this compares with an average 25-year lifespan of most corporations. The value of the brand, therefore, can be a disproportionate part of the overall value of an enterprise. Interbrand, the consultancy, estimates that while on average the brand accounts for 30% of the valuation, for Coca Cola the brand is more than 50% of the total. In the case of McDonalds, the brand accounts for a whopping 70%. But the value of brands is explicitly recorded on very few corporate balance sheets.

The benefits of branding are well understood. They not only act as a signal of quality and reduce search costs, but are an indication of status affiliation - a statement about one's personality. They also provide a fallback mechanism in times of uncertainty. During the crisis, the purveyors of luxury - Cartier, Armani, Gucci, Tiffany - did remarkably well due their heritage and legendary status. The reign of brands became particularly visible in Asia where Louis Vuitton, Häagen-Dazs, Johnnie Walker and Burberry are extraordinarily popular. Who thought that the path to the inexorable rise of the new Empires of the East would be covered with Hermes handbags?

Nowhere is the relevance of brands greater than in emerging markets. The rapidly rising middle class is unashamedly aspirational and very interested in the "badge value" of brands. Whereas in the West brands tell a story and express a personality, in the buoyant emerging world brands are tasked with displaying newly found wealth and confidence. As successful individuals in developing countries desire to become members of the developed club, they gain their entry ticket by buying the most celebrated brands of the West.

Countries of the former Soviet Union have taken this trend to an extreme. The lack of access to luxury was replaced with rampant consumerism and a sense of urgency to participate in the international market. In the West, the pictures in Vogue are an ideal designed to inspire; in Moscow, they are a blueprint of what to wear for fashionable women. "We are like children who have been looking through the windows of a sweet shop for years", says a well known minigarch. "Now we are allowed to go inside, and although we know it is not good for us in the end, we can't stop eating and trying all the sweets in there".

In China, branding has another dimension. In a country of more than 1.2bn, standing out can be tough. Intense pressure to put group before self discourages setting yourself apart from the crowd. However, brands give professional Chinese the ability to express themselves even without speaking a word. They customise their mobile phones, create elaborate online alter-egos, or blend local and global fashion in a highly individual, albeit edgy manner.

In all of the countries of the BRICS brand, individuals aspire to consume brands created in the West. In one sense, this is understandable. A brand needs time to be created and established. The youth of the emerging consumer means that there are very few local brands to aspire to. Emerging markets follow two routes to brand creation. The first one is the domestic, whereby they benefit from a growing home market, oftentimes copying the business models of companies in the West, oftentimes in staples, discretionary items and finance. The second is the export model, which relates to companies with small domestic markets who are backed as champions by their governments, usually in resource extraction.

Home is where heart is

Despite their youth, emerging-market brands are winning fans domestically. According to WPP, the most respected local brand in India is Good Knight, a maker of mosquito repellent; in Turkey, the Istanbul football club Galatasaray; and in Argentina, the dairy company La Serenisima.

As the emerging economies grow wealthier and more confident, the interest in national brands has been rising steadily. Brazil is getting rid of its inferiority complex and drawing on its substantial cultural, musical and architectural heritage. While local brands were extremely unpopular in Russia during the 1990s, pre-revolutionary transport, liquor, and confectionary brands are now being resurrected with gusto. In South Africa, where the "first world" sits cheek by jowl with the third world, domestic brands rub shoulders confidently with foreign ones. In India, the brands sold in more than 7m kiosks are local to such an extent that middle-class Indians still ask their storekeeper to keep their brands and have them delivered to their door. Li Ning competes head-to-head in China with Nike and Adidas. Baidu has handsomely outmanoeuvred Google in the Middle Kingdom, while Facebook seems to have lost the battle in Russia to Mail.ru. The acquisition of the Russian Wimm-Bill-Dann by Pepsi or the South African Massmart by Walmart shows how significant this domestic value added is.

Wolff Olins, the agency behind London Olympics logo, has tipped the following emerging-market brands to attain reach well beyond their home turf: Juan Valdez Cafe of Columbia, the Saudi dairy and fruit juice company Almarai, the Lebanese chocolate chain Patchi, China's biggest wine producer ChangYu and India's largest liquor group United Spirits.

Today, emerging-market brands hold valuable lessons for the brand portfolios of many global consumer behemoths. The juice drink "Pulpy", developed in China by Minute Maid, topped $1bn in sales in only five years to become one of the fastest growing branded products in the world.

The rise of emerging markets can be also seen in the companies that make it into the top-100 global brands. In 2010, 13 of the top 100 brands came from emerging markets; five years ago, there was only one, China Mobile.

The different way that brands are perceived in developed and emerging markets is not only due to their different consumption patterns. The most obvious difference between mature and emerging markets is demographic: the median age in Japan, Germany and Italy is 43; in China it is 34, in Brazil 29, in India 25. In many emerging markets, more than 50% of the population are in their teens. It is of the utmost interest to find out how the most populous consumer force of the future responds to brands ("Teenagers and Brand Engagement in Emerging Markets", L Namiranian).

Like their peers in the West, emerging-market teenagers tend to be connected via broadband to the world. It is not only an essential communication tool, but also a way to customise the world to their needs. They browse the news they want to read, listen to the music they want to listen, visit the websites they want to visit. To them, their computer and phone simplify life and serve as a status indicator, as a means to present self to others. Vocal in their opinions, they demand brands that are easy to access, where quality can be ascertained before purchasing and where it is easy to upgrade, replace or renew. Brand experience happens on their, not the brand's, terms.

It should not surprise us then that a brand that seems to have currently achieved the ultimate in personalisation and customisation, Apple, is one of the highest capitalised companies in the world. To remain relevant - and to conquer the future global consumer pool that's the emerging-market youth - brands across the world should try to emulate Apple's example. It is the only way to achieve that coveted longevity and brand equity value.

As the naves of Westminster Abbey fill with the solemn "...long to reign over us...", the Fortnum & Mason clock will chime cheerfully on Piccadilly. As bunting flutters on the streets of London, as fairy cakes and scotch eggs get eaten aplenty, we will be reminded about the secrets of a successful brand. The royal brand is seeking an extension for the future via this most memorable Royal Wedding and we are reminded of the words of Jeff Bezos, CEO of Amazon: "A brand for a company is like a reputation for a person. You earn a reputation by trying to do hard things well".

Emerging brands of the world, cheers!

Plamen Monovski is CIO of Renaissance Asset Managers