February These publications are available on the Brand South Africa website at

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1 Research Update Brand South Africa International Investor Perceptions Research and the Nation Brand Views from 16 Markets February 2017 Brand South Africa s mandate requires the organisation to clearly understand the reputation, competitiveness, and perceptions of South Africa in key international markets. As part of its approach towards achieving this mandate, Brand South Africa draws insights from its international investor perceptions research as well as the Nation Brands Index, an independent research survey conducted annually by Anholt-GfK Roper. Brand South Africa has prepared Research Notes summarising key findings from the following 16 markets: Ø Ghana, Kenya, Senegal, Nigeria, Democratic Republic of the Congo (DRC), and the United Arab Emirates (UAE) Ø China, India, Russia, and Singapore Ø Germany, France and the United Kingdom Ø United States of America (US) and Brazil These publications are available on the Brand South Africa website at 1. Background The International Investor Perceptions study is geared towards understanding investor perceptions of South Africa as a country with which to do business. Brand South Africa appointed IPSOS, a recognised market research company, to implement the study. Research was carried out in 16 markets, including a number of African markets as well as our BRICS partners. The study covers the following markets: Ø Africa & Middle East: Ghana, Kenya, Senegal, Nigeria, Democratic Republic of the Congo (DRC), and the United Arab Emirates (UAE) Ø Asia: China, India, Russia, and Singapore Ø Europe: Germany, France and the United Kingdom Ø Americas: United States of America (US) and Brazil Interviews were conducted with individuals with decision-making power or influence within their companies when it came to exploring international business opportunities. The Anholt-GfK Roper Nation Brands Index is an annual survey that measures the image of 50 nations according to six dimensions: Governance; Exports; Tourism; People; Culture; and Investment & Immigration. The 2016 NBI survey has been conducted in 20 major developed and developing countries, with at least 1,000 interviews per country. The sample included adults aged 18 or over, and it was weighted to be representative of online populations according to age, gender and education. In the U.S., the UK, South Africa, India and Brazil, race/ethnicity was also included for sample balancing. Both projects present Brand South Africa with valuable insight on key issues that impact positively and negatively on South Africa s reputation in select markets. 1

2 Brand South Africa has prepared Research Notes summarising key findings from all 16 markets. These publications are available on the Brand South Africa website at Below follows a snapshot of some findings presented in the Research Notes. 2. Country Brand Health Funnel A key component of Brand South Africa s Investor Perceptions survey is the Country Brand Health Funnel, which measures the country s reputation according to levels of awareness, familiarity, favourability, trust and advocacy. Figure 1 below illustrates the logic behind measuring these attributes and the way in which they contribute to overall reputation: Figure 1: The Country Brand Health Funnel Each Research Note provides an illustration of perceptions of investors from that country around each of these attributes and the extent to which they would endorse South Africa as a country, particularly as one with which to do business. 3. Findings on Familiarity, Favourability,Trust and Advocacy In the case of China, for example, levels of familiarity and favourability are relatively low, as illustrated by figures 2 and 3 below. Figure 2: Level of Familiarity with South Africa among Chinese respondents 2

3 When asked how well they knew South Africa, 6% of the Chinese respondents said they knew South Africa extremely well, and just above a third (34%) said they knew the country fairly well, while 60% reported that they knew the country a little. (See Figure 2) When asked to take into account all the information they had heard or come across about South Africa, almost half (48%) of the respondents had a favourable impression of the country. Only 4% had an extremely favourable impression and many respondents were ambivalent: 46% had a neither favourable nor unfavourable impression of South Africa with only 2% having an unfavourable impression of South Africa. (See Figure 3) Figure 3: Overall Impression of South Africa among Chinese respondents The survey shows that overall, Chinese investors have a neutral impression of South Africa and are not that familiar with the country. In contrast, India, another BRICS member, had more positive perceptions of South Africa as a country in which to do business. In fact, favourability levels were higher than familiarity levels, with 68% of respondents stating having a favourable or extremely favourable perception of South Africa. The survey also gauged levels of trust and advocacy among respondents, asking them to state how likely they are to express certain sentiments about South Africa. Questions asked included how likely they were to visit the country for business, how likely they were to admire South Africa, or how likely they were to recommend South Africa as a country to invest in. Figure 4 below illustrates the high levels of advocacy among Indian investors, particularly in terms of speaking positively about South Africa (top two box score of 90%); respect South Africa ; and visit South Africa for business. Figure 4: Trust and Advocacy levels 3

4 4. Key Industries associated with South Africa Respondents were also asked which industries they associated with South Africa. Overall, the top-of-mind association for international investors was the mining and quarrying industry. However, a closer look at individual countries showed a more nuanced knowledge of the market in some instances, particularly from the African markets surveyed. Figure 5 below shows the industries with which South Africa is associated according to the regions covered. For more detail on the individual markets, please visit the Knowledge Hub. 1 Figure 5: Industries associated with South Africa 5. Key (Un)Attractiveness Features of South Africa among International Investors In order to manage country reputation, it is essential that one understands what makes a country appealing to potential investors, as well as what concerns them. Such perceptions matter be they based on experience or hearsay as they influence decisions on whether or not to conduct business in any given setting. For this reason, the survey asked respondents what would prevent them from doing business in South Africa in particular. Conversely, knowing what makes a country an attractive investment destination allows the leveraging of strengths that can be banked on to enhance country reputation and promote investment. 1 Brand South Africa s Knowledge Hub provides stakeholders, and the general public in both the domestic and international environments with access to more detailed internal analysis documents. After free registration, stakeholders can utilise the information available in the Knowledge Hub for their planning, stakeholder engagements, communications and marketing strategies and briefings to international delegations. Fore more details, visit, 4

5 Figure 6 below illustrates the top deterrents for investments according to region. Again, as with the associations, a closer look at individual countries will reveal more nuanced perspectives. Figure 6: Concerns deterring international investors from conducting business in South Africa On the flipside, Figure 7 shows the top traits that make South Africa an attractive destination to invest in per region. Figure 7: Top characteristics that make South Africa attractive to invest in 5

6 6. Investor Communication As the country s official marketing agency, one of Brand South Africa s primary responsibilities is to develop and implement proactive and coordinated marketing, communication and reputation management strategies for South Africa. An understanding of the sources stakeholders rely on when seeking information about a country as an investment destination or trade partner is key to developing an effective communications strategy, as is knowing the formats stakeholders prefer to receive information in. This assists Brand South Africa in tailoring its messaging and packaging information about the Nation Brand in formats most appropriate for the targeted market. Furthermore, these insights can also serve other entities, such as the Department of Trade and Investment Industry or the Department of International Relations and Cooperation, by providing recommendations on the most appropriate channels to use when communicating with their stakeholders Sources of information Figure 8 and 9 below illustrate the variance among investors in terms of where they seek information about South Africa as an investment destination or trade partner. While US investors rely primarily on colleagues or business associates with experience in South Africa, for example, investors from Ghanaian investors appear to rely more on trade shows & exhibitions when seeking information about South Africa as an investment destination. Figure 8: Top 5 Sources of information for US investors Figure 9: Top 5 Sources of information for Ghanaian investors 6

7 6.2. Preferred means of receiving information Another important objective of the research was to understand how best to communicate with stakeholders in a targeted market. Here Brand South Africa sought to understand which of the three key platforms it currently uses to communicate with its stakeholders are the most appropriate when relaying information to potential investors about South Africa as an investment destination or trade partner. While some markets had a clear preference for written formats (e.g. Russia, Brazil, Kenya), others favoured the more personal one-on-one meetings (e.g. Germany, Senegal). 7. The Nation Brands Index: Comparing Perceptions from Select Panel Countries Nine of the 16 markets surveyed for Brand South Africa s International Investor Perceptions study also formed part of the group of panel countries selected for the Anholt- GfK Roper annual Nation Brands Index. These are: 1) Brazil, 2) China, 3) France, 4) Germany, 5) India, 6) Japan, 7) Russia, 8) United Kingdom and 9) United States. This therefore presented an opportunity to compare findings from Brand South Africa s inhouse research with results from the NBI and provide further lessons on leverageable strengths and potential pitfalls when managing country reputation. The table below shows how citizens from these nine overlapping countries score South Africa on two of the six dimensions of the Nation Brand, including the sub-indicators. South African citizens ranking of their own country is also included for comparison. Table: South Africa s Ranking on Tourism & Immigration/Investment by Select Panel Countries Total Brazil China France Germany India Japan Russia South Africa United Kingdom United States Nation Brands Exports Ex-Science&Technology Ex-Buy products Ex-Creative Place Culture Cul-Sports Cul-Cultural Heritage Cul- Contemporary Culture Note: The cells are coloured using Excel conditional formatting. Dark green shows the most positive rankings and dark red the most negative rankings. Source: Anholt-GfK Roper NBI 2016 Report, December

8 Each of the 16 Research Notes concludes with some lessons from and for investors drawn from the international investor perceptions study, and where applicable, from the Nation Brands Index. The development of a promising strategy to manage country reputation requires deeper knowledge, not only about the perceptions of potential foreign investors, traders and visitors, but also about the broad set of factors that contribute towards reputational capital. This unique empirical research contributes to that body of knowledge, and hopefully provides not only food for thought, but cause for action. Brand South Africa s Research Notes, Research Reports and Research Updates communicate findings from Brand South Africa research, related panel discussions and analyses of global performance indices. The publications are intended to elicit comments, contribute to debate, and inform stakeholders about trends and issues that impact on South Africa s reputation and overall competitiveness. Views expressed in Research Notes, Reports and Analyses are those of the author(s) and do not necessarily represent those of Brand South Africa, or the Government of the Republic of South Africa. Every precaution is taken to ensure the accuracy of information. However, Brand South Africa shall not be liable to any person for inaccurate information or opinions contained herein. Contacts Dr Petrus de Kock General Manager Research - petrusd@brandsouthafrica.com Dr Judy Smith-Höhn- Research Manager judys@brandsouthafrica.com Ms Leigh-Gail Petersen Researcher leigh@brandsouthafrica.com Mr. Thabelo Mbedzi Research Intern thabelom@brandsouthafrica.com 8