Market entry strategy for exports to Italy

If Italy 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 Italy

Italy is one of the larger economies in Europe, but also a country with very different regions, ranging from rich to poor. Italy has a rich cultural heritage, with Rome being one of the oldest continuously occupied cities in Europe. The country’s official language is Italian, but there are regions where German, French, and Slovene are primarily used.

As of 2024, Italy’s population is estimated at approximately 58.78 million. The country has been experiencing a population decline since its peak in 2017, with a negative growth rate due to a higher death rate than birth rate and negative net migration.

Italy is known for its diverse industrial sectors, ranging from fashion and luxury goods to automotive and machinery. It’s a significant player in the European and global economy.

HOW TO FIND YOUR AGENT OR DISTRIBUTOR?

The major urban centers include Rome, Milan, Naples, Turin, and Palermo. Italy is characterized by an uneven population density, with dense populations in the Po Valley and metropolitan areas of Naples and Rome.

Rome is the capital, but most of the economic activity is in the North, mainly focused around Milan. Depending on your product one of these cities (or both) should be your starting point. From there you can approach the other cities. In Italy there are a lot of medium-sized family businesses, so it can be difficult to find one distributor for the whole country.

Finding an agent or distributor requires good knowledge of the Italian language and a good understanding of the culture. Without this it will be difficult to get access to the market.

SPECIFICS OF THE ITALIAN ONLINE MARKET

The Italian online market has some unique characteristics that set it apart from other markets. Here are some of the key factors:

The Italian market is unique because it has a strong cultural and linguistic identity. This means that Italian consumers prefer to shop from websites that are tailored to their language and culture, and are more likely to trust local businesses that they know and recognize.
Italy is famous for its luxury fashion and design, and this is reflected in the online market. Italian consumers are willing to pay a premium for high-quality products and services, particularly in the fashion, beauty, and home design sectors.
While e-commerce is growing in Italy, it has been slower to take hold than in other countries. This means that there is still a significant opportunity for businesses to enter the Italian market and capture market share.
Italians are heavy users of smartphones, and the mobile phone is often the primary device for accessing the internet. This means that businesses looking to succeed in the Italian market need to have a strong mobile strategy.
The Italian market is relatively fragmented, with a large number of small and medium-sized businesses operating in different sectors. This means that there are many niche opportunities for businesses to target specific segments of the market.

In general, there are two ways if you want to sell your products online in this market:

Through an open platform like Amazon, Eprice or Zalando where you can set up your own shop
Through a (specialized) online distributor, who will buy your products and sell them on its website.

If you look at the most used third-party sales platforms, these are Italian versions of international websites and there is no incumbent party. But where other ‘foreigners’ have been able to make the step to the Italian market, with the right investments it should also be possible for you.

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 Italy 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.