The total value of the world’s top luxury and premium brands has declined by 3 per cent, or approximately US$7 billion.
According to Brand Finance’s Luxury & Premium 50 2021 report, the value of the top 50 luxury brands in the world shrunk from US$227.1 billion in 2020 to US$219.5 billion this year as markets grapple with the Covid-19 pandemic.
Brand Finance defines luxury as “brands that are well known for high quality but are not widely considered or purchased due to price”. This means high brand awareness and a strong reputation for quality but low purchase conversion.
World’s Top 10 Luxury Brands
Germany’s Porsche tops the list as the most valuable brand with a value of US$34.3 billion. The brand ranks considerably ahead of Gucci (second-ranked), whose brand value went down 12 per cent to US$15.6 billion.
Synonymous with timeless class and luxury, Porsche is striving to push the boundaries and redefine the future of the sportscar. The auto giant has been undertaking the shift towards sustainability through the launch of their Taycan. Porsche celebrated strong sales with this model, totalling over 20,000 units sold last year. This impressive result means more than 10 per cent of Porsche’s sales are now from its electric vehicle models.
Fashion Brands Dominate Rankings
Clothing brands are prevalent throughout the ranking, accounting for 62 per cent of the total Top 50 value of US$219.5 billion. Performances have been impacted by the pandemic as a majority of the brands have recorded a loss this year.
Coach has recorded the biggest drop in brand value this year, falling 31 per cent to US$4.7 billion. Coach’s parent company, Tapestry, has cited that forecasts across its brands are looking more positive than anticipated thanks to the e-commerce growth in the Chinese market.
Opposing this trend, however, French brand Celine is the fastest-growing luxury brand this year. It recorded a 118 per cent brand value growth jumping 13 spots to 34th in the ranking.
Hotels Check Into Ranking For The First Time
For the first time, the Brand Finance Luxury & Premium ranking includes two hotel brands: Shangri-La and Intercontinental. Both brands stand at 29th and 35th spot respectively. The hospitality industry had come to a standstill as people cancelled holidays and work trips due to the pandemic.
Shangri-La — which owns five-star luxury properties across the Middle East, Asia, North America, and Europe — is the highest-ranking hotel brand.
Ferrari is Sector’s Strongest Brand
Brand Finance evaluates the relative strength of brands, in addition to their value. Ferrari (US$9.2 billion) is the world’s strongest luxury brand and the second brand in the world according to the Brand Finance Global 500 2021 ranking. Ferrari has a Brand Strength Index (BSI) score of 93.9 out of 100 and an elite AAA+ brand strength rating.
The next strongest luxury brand is Rolex. With a BSI of 89.6 out of 100 and an AAA+ brand strength rating. Despite the pandemic, the market for luxury watches has shown resilience.
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