Market entry strategy for exports to Morocco

If Morocco is a relatively unknown market for you, you need a clear market entry strategy. This may be different from the strategies you have used so far, as the market structure and the competition is different.

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.

Oppportunities for international business in Morocco

Morocco is one of the further developed African countries, with an estimated population of around 37 million people, reflecting a blend of Arab, Berber, and African influences.

The Moroccan economy, with an absolute GDP per capita of approximately $3,400 USD as of 2023, is diverse and growing. The main economic drivers include agriculture, tourism, and manufacturing. Agriculture, particularly the cultivation of cereals, olives, and citrus fruits, plays a significant role in the rural economy. Tourism is also crucial, with Morocco’s historic cities, Mediterranean and Atlantic beaches, and mountain ranges attracting millions of visitors annually. Moreover, the manufacturing sector, especially textiles, automotive, and aerospace, is expanding rapidly, driven by foreign investment and government initiatives.

Morocco is increasingly becoming an important industrial player in the EMEA region due to its location as it serves as a stepping stone to Africa and the Middle East.

Having experienced an average growth of 4.4% in its GDP over the last 15 years, there are strong indications that its economic growth in Morocco will continue to improve. Being the third largest recipient of foreign investment in 2014, the nation is favorable for its financial services and telecommunication sectors.

Top exports to Morocco

Trade agreements have eased the state of imports as well as exports to and from other countries. Morocco has trade agreements with the EU, US, Turkey, and the Arab nations.

As per country data, top exports in 2019 were:

Machinery– 18.1%
Vehicles– 13%
Fertilizers–10%

Morocco has also shown progress in the following areas:

It is rated as the 3rd most friendly country in the world
74% of all Moroccans have access to the internet
Duty free access is provided to one billion consumers

Measures to strengthen the macroeconomic base have resulted in decrease in budget and current account deficits. Morocco has maintained its macroeconomic stability and shown positive growth. Morocco has maintained an average GDP growth between 5% and 10% from 2000 to 2014. It has kept inflation below 5% during this phase as well as reduced the public debt from 63% in 2015 to 66% in 2019.

Foreign Direct Investment in Morocco

Morocco is the leader in FDI in North Africa. Historic ties and close proximity to Western Europe, a proactive FDI policy and having more skilled workers available as compared to most developed markets have benefited Morocco. It is increasingly considered as a favorable gateway for investors from US and Europe to invest in the fast growing African continent. This is due to its stable business environment and support services, combined with good air links to many other African countries.

Investment opportunities in Morocco

The most promising sectors in Morocco are as follows:

ICT
Cancer care
Transports
Renewable energy
Finance
Automotive
Aeronautics

Five ways into a market

Your entry model decides your cost, your speed and how much control you keep: sell directly from home, work with an agent, appoint a distributor or importer, sell online, or open a local office.

Control and investment move together. Direct and online selling are cheap to start and easy to stop. A local office gives full control, but needs staff, registration and often a local company.

Most companies start light, prove that there is demand, and only then invest.

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Entering the market in Morocco in three steps

Step 1

Validate the demand

Check market size, competitors and price levels, then speak with five to ten potential buyers. Their reaction tells you more than a general market report.

Step 2

Choose channel and price

Pick the entry model that fits your margin and your capacity, and calculate your landed cost: transport, duties, VAT and the margin the channel will take.

Step 3

Pilot, then scale

Start in one region or with one partner, agree what success looks like after six to twelve months, and expand the country plan only on those results.