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Key in your market entry strategy is some market research. Of course there are reports on market size and market growth, but often these are general. Specific knowledge on how your product is perceived and what your competitions is, is harder to get but more valuable.
Our local consultant can advise you on the best way to enter the market, based on market and competition research.
Germany is one of the largest markets of Europe, but also a conservative one and difficult to penetrate from abroad.
Up to the 20th century Germany consisted of various independent kingdoms, duchies and city states. As these were relatively small and heavily dependent on each other, this has created a culture in which modesty and the pursuit of agreement are important values. The protestant beliefs, mainly practised in the north, have only added to this.
This means also that the sales process can be longer than normal, with more contact points, and personal sales is still valued very much. It also means that once they have chosen for a specific brand, Germans won’t switch so easily, although this will be less with the younger generations.
A website providing extensive information, a well trained call-center and a good guarantee policy is important. Also pay attention to online reviews and -if applicable in your sector- articles written by journalists about your products.
The group that has the highest purchasing power in Germany is the 55 years and above category. Though the younger generation always appears to be more online savvy, it is the older group that is is catching the eye of local retail players. Even the 65 plus age group is fast catching up to adopt online shopping habits in Germany. German consumers are using their mobile phones to compare prices even when shopping in a store.
Germany is also one of the leading European markets for e-commerce cross-border trade, and their already established delivery infrastructure is another huge benefit to retailers looking to reach the country’s 58 million online shoppers.
The fact that over 50% of these shoppers are already purchasing from international sites, again reiterates the opportunity Germany provides. Click and collect stations are becoming more popular due to customer service convenience but the click and collect concept is yet to be adopted by German shoppers.
As of 2014, twenty-eight German companies have made it to the Top 100 European E-Commerce Companies. Zalando is one of the successful local brands, that launched a mobile first strategy in 2015 and has captured 15 international markets across the globe, owing to its prowess in the areas of Technology, Marketing, Fashion and Logistics.
Consumers are becoming increasingly demanding. They are exercising a stronger will in purchase decisions regarding purchase points, shopping behaviour and frequency. Thus, it is very important to combine different sales and marketing channels to be able to cater to a wider clientele. This variety is however lacking in the German market place.
“Click and Collect” combines offline and online shopping. This approach in shopping has entered the in home furnishing markets. Click and collect stations are becoming more popular due to customer service convenience but the click and collect concept is yet to be adopted by German shoppers.
Parcel service providers are now facing a challenge in order to meet the changing demands of the German consumer. Hence, they have begun offering free deliveries, same-day deliveries, pre-booked delivery time frames and eco-friendly delivery models. This industry presents business opportunities due to its competitiveness.
The inclination to pay online is a growing one in Germany though they are traditionally known as being averse at taking risks. However, online payments for expensive commodities will only gain popularity once return and refund methods are introduced into the German market.
The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.
Where it comes to hotels, research shows that if you check these platforms, in 80% of the cases you have the lowest room rates.
If you have a consumer product that you can’t sell directly from your home country to your end customer, you need at least one step in between. This can be a distributor (who also acts as wholesaler or importer), a big retailer directly, or it can be a large web shop. Let’s look at the pro’s and con’s of each option.
For a B2B product that is not a commodity or for customized solutions the story is different. Here sales needs to be done in alignment with the department that actually delivers the service or that determines the price case by case. Also then you have three different options.
As counts for any country: you first have to define the target group that you want to sell to. If these are businesses, then you can reach out directly through emails and targeted advertisements, e.g. on LinkedIn. If this arouses interest and gives a sufficient response rate, then you may have found an easy way to get the market’s attention.
If your target group is more diffuse, or is a consumer group, then you have to rely more on advertising such as on Facebook or Instagram.
With the tooling of our partner Instantly.ai you can define your target group, whether it’s 50 or 50.000 people. Send them a sequence of emails, directly in their inbox, for typically under 10 dollarcents per persoon.
First determine who are the end-users of your product or service. And where do they buy it now? The best way to determine the right entry strategy is to approach these parties. Would they consider your product or service as an alternative? Do they agree with the positioning that you have in mind? And what competitors are they buying from now? These data will help you determine the right strategy.
