If you need to decide on which country to export to, two aspects are highly important:
- Population size: for every country you may have to adjust your product or labelling, you have to figure out import regulations and to set up distribution. The more people in the country, the more you can sell with the same groundwork.
- Spending power: the richer people are in general, the more they will buy imported products or services. A good proxy for the average spending power is the GDP PPP per capita. This is the added value within the country, divided over the population, and corrected for the price level in the country. That last thing is what PPP stands for, Purchasing Power Parity.
The best big countries to export to
Let's first have a look at the biggest economies in the world:
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What we see is that China and India stand out in terms of population, but that spending power in India certainly is still low. Please note that spending power in China has gone up from around 10,000 USD to 17,000 USD in the last 5 years, surpassing Brazil. In Europe and the US spending power has also gone up, but less in percentages, and this is without correction for inflation.
What these data don't show is income distribution. For example in Delhi you may find many millionaires, and in Shanghai the spending power is on average also much higher than in the rest of China. But especially when you sell a product through stores, and with a better quality than the bare minimum, you may want to stick to economies with higher spending power.
If you're based in Germany, China or India may not be the first markets you think of. So let's have a look per region as well.
The best countries to export to in Europe
Europe harbours a number of the biggest economies in the world, all with a lot of spending power.
In (Western) Europe we see that Germany is the biggest economy, followed by France and the UK. Spending power doesn't differ so much, Switzerland and Norway are richer, Portugal is lagging behind in this selection.
What about Eastern Europe? Except for Poland, which is big and relatively affluent, these countries wouldn't appear in the top selection for Europe as a whole. But the following graph gives more insight:
A good number two in Eastern Europe would be Romania, of, if you go for higher spending power, the Czech Republic and its surrounding countries. Please note that practically all countries have different languages, so you will have to adjust your product each time.
The best countries to export to in the Middle East
What about the Middle East? Here we see that Turkey and Iran are the biggest countries in terms of population.
If you look for more spending power, Saudi Arabia and the United Arab Emirates are better. As everybody speaks Arab there, you can then also include Bahrein, Kuwait and Oman.
The best countries to export to in Africa
Africa has 54 countries, and most of them are stable democracies. We have taken the 12 with the highest GDP PPP overall.
Please note the scale of the vertical axis: the big countries in the Middle East that have relative low spending power, Iran and Turkey, are still more affluent than Algeria. The growth in Africa still has to come.
The best countries to export to in Asia
If you want to look further than the two giants, India and China, there are certainly more countries in Asia that are worth while exploring.
Singapore stands out, this city state has attracted a lot of millionaires from other countries and also has a large banking and trading sector. Spending power in Japan and South Korea is comparable to Western Europe, and in Southeast Asia Malaysia is certainly coming up.
Please note Indonesia: it stands out by its large population, but also spending power is growing. The current 12,000 USD is an average: in the cities like Jakarta, Surabaja, Bandung and Medan spending power is certainly higher, and each of these cities have more people than Singapore.
We conclude our trip around the world with an overview of Latin America. Also here we see various stages of development, with Brazil standing out in population, and Chile in spending power.
There is always more to take into account...
Population size and spending power are one, but many more factors and selections should be taken into account if you search for the right export country for your specific product or service. The ease of doing business in a country may be important as well, or the relative ageing, if you sell products for the elderly.
Alliance experts can help you to find out which country is the most promising for your offering. Just contact one of our specialists, who can also consult with their colleagues in over 20 countries around the world.
If you want to know this for your specific product...
Alliance experts offers a unique service for analysing the main trading streams and price levels for your specific product, identified by the HS Code. We use the 6-digit version of it, which drills down to a specific product catagory, such as stuffed pasta (190220), stainless steel wire (722300) or parts for railway locomotives (860791).
In collaboration with a specialised team of data scientist and experts working in the field of analytics research innovation we can offer you a concise report for your specific product range, that specifies for example:
- Which countries are the biggest exporters and importers of the product?
- Are volumes increasing or decreasing?
- Where are prices higher and where lower?
- What is the performance of other exporting countries?
- What are barriers to enter the market?
The report contains many graphical presentations that rank the various countries, based on the aspects that you find important: such as market growth, market size, geographical proximity or price levels.