Market entry strategy for exports to Germany

Germany is one of the largest markets of Europe, but also a conservative one and difficult to penetrate from abroad.

Germany is a major global economic player, renowned for its industrial output and robust economy. The country has a strong focus on manufacturing and export, especially in the automotive and machinery sectors.

Germany is home to several large cities, with Berlin being the largest, followed by Hamburg and Munich. The country also has a large number of smaller cities and towns, with a total of 82 cities having populations of more than 100,000 people.

Exports to Germany

Germany is one of the leading European markets for cross-border trade, both for consumer products as for business-to-business products and services. It has many opportunities for both commodities as high-quality goods. But selling in Germany requires a specific approach which may be different from the rest of Europe.

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.

IMPLICATIONS ON THE SALES PROCESS

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.

MATURE AND AFFLUENT CONSUMERS

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.

E-COMMERCE IN GERMANY: SELLING ONLINE TO THE GERMANS

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.

MANY BUSINESS OPPORTUNITIES IN E-COMMERCE

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.

DIGITAL POINT-OF-SALE STRATEGIES

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.

GROWING DEMAND FOR FLEXIBLE LOGISTIC SOLUTIONS

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.

E-PAYMENT SYSTEMS ON THE RISE

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.