There are many installation points for businesses in the German retail industry. The German market is brimming with opportunities especially on the segment of retail. Country data states that Germany represents 20% of the purchasing power in Europe. Despite the extreme competition within the retail industry of Germany, massive opportunities materialise as well.
Trends, threats and opportunities
Entering the German retail market requires preparation and long-term strategies for your business to prosper.
Here are some of Germany’s retail industry’s opportunities and threats:
- To battle the ageing rate in Germany, the country is open to welcoming more immigrants. This provides increased chances for international businesses to penetrate their market. This demographic transition opens wide varieties in retail markets, but competition could prove to be gruelling.
- Urbanisation is growing at a rapid rate, which pulls high consumer density flow in urbanised areas. If you plan to be a reseller, the demand for new products is high, but be prepared to compete with other resellers and retailers in the market.
- Market consolidation offers an opportunity for resellers and retailers to capture take large market shares.
- According to surveys, the fastest growing sales in retail with a 17% growth rate is in e-commerce.
Establishing your business
Before implementing a particular marketing strategy in Germany, you must evaluate the market by analysing country data. In this way, you can decide on a long-term plan that best fits your business needs.
Here are some ways to establish your business and their drawbacks:
- Employing locals will allow you to keep a keen eye on sales while being actively involved in the businesses. Though hiring local staff in Germany can be expensive.
- A joint venture with a distributor will be time-efficient, but you are left with little control on the sales of your products.
- Hiring agents is cost-effective and smart since agents know the market and the locals. In spite of the advantages, it would be hard to evaluate an agent and you still require a distributor to do jobs that an agent couldn’t handle.
- Selling from your home country does not require any investment in funds and it gives you full control on your products. However, German contacts will shy away from your company because of the lacking presence of your company in the German market.
Obtaining a strong foothold in the German retail market is a huge investment. Conducting prior research and analysing country data will ensure safe entry and successful retail penetration.