LatAm Country Analysis
The BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013 reveals an interesting shift as far?as each country contribution is concerned: Mexico overtakes Brazil in value terms with a 29% share, and is now the main contributor. Brazil fell to second position, dropping from 34% to 28% of the total contribution.
Latin American Brand Value % Contribution By Country
Petrobras’ dramatic devaluation in the capital markets and resulting drop in brand value (by 45%) was a significant factor in Brazil’s lower ranking in the BrandZ Latam Top 50, but so too was the crisis in the country’s financial segment. In order to stimulate consumption and companies’ investments, the government lowered the basic interest rate and pressured public and private banks to reduce the cost of loans and consequently their spread (the difference between what financial institutions receive in interest compared to what is given back to investors). All banks had to adhere to this policy in order to maintain competitiveness, and the scenario led to lower incomes.
Mexican brands grew from 24% to 29% in their overall contribution to the value of the BrandZ Latam Top 50. Despite the decline of Telcel the increase in value was led by the beer brands, and banking and retail sectors also performed positively. The decrease in the brand values in the communications segment can predominantly be explained by a drop in some companies’ market value, leaving investors insecure.
Argentina still shows signs of uncertainty. The combined value of its brands dropped considerably and now the country makes up only 1% of the value of the BrandZ Latam Top 50 (from a more representative 3% the previous year). The poor performance in the oil industry (the Argentinean main driver of value) is responsible for most of this decline.
Chile and Colombia in effect maintained their contributions to the total BrandZ Latam Top 50. It’s worth noting that, despite having a much smaller economy compared to Colombia and Argentina, Chile holds third place in total contribution, which clearly shows the power of some of its well-positioned brands (such as Falabella), helped by the fact that Chile is now considered the most globalized country in the region, having established visa agreements with the United States and trade agreements with over 50 other countries.