Over the past decade and a half, Germany has gone from a stagnating economy to the powerhouse of the EU. As the German export economy has grown, the German people have grown into an increasingly lucrative market for foreign companies. For companies closing branches in the UK due to Brexit, expanding into Germany may be the natural next step.
Are you considering a move into the German market, but aren’t sure how to go about it? Check out the following six considerations that will help you transition smoothly and successfully into the German market.
1: A NEW YOUTH ECONOMY? THINK AGAIN
Germany is famous for its ageing population. Its median age is 45.9 as of 2015, and this is predicted to reach 50 by 2045. This means that half the population is over 46—and only 19.85% is under the age of 25.
This demographic reality has a massive influence on the economy: Germany has a weak digital sector and shines in construction, renewable tech, auto manufacturing, and, always popular with the elderly, healthcare.
Germany’s ageing population also influences marketing strategy. Television ads are still the most popular way to reach consumers, though digital marketing is on the rise.
These realities should guide your business strategy. If you have a youth-oriented product, you may want to steer clear of Germany—unless, that is, your competitors are thinking the same. Whatever your approach, you likely can’t ignore the massive, affluent, and greying half of the population. They play a huge role in which products become popular in Germany, which marketing strategies are likely to be successful, and what kind of “business style” is likely to succeed.
2: CREATE A PHENOMENAL DELIVERY EXPERIENCE
German consumers love to shop online. As of 2014, German shoppers were the second largest online market in the EU, only after Great Britain.
Further, Germans are very particular about how they like to online shop. A recent survey found that 83% of German online shoppers would pick one retailer over another based on a difference in delivery experience. German shoppers want fast shipping, and they want it cheap. Most shoppers want to be able to track their order, and many want to be able to control their delivery date.
As a foreign company, you should match or even exceed the shipping experience offered by domestic companies. The last thing you want is to come off as a faraway company that offers poor and slow delivery service!
Furthermore, German shoppers return items at a very high rate. You’ll want to make sure that your company is able to accept and coordinate returns in an efficient and timely manner. Make sure you can match the service and efficiency of domestic companies—and advertise that fact front and center!
3: HAVE A GERMAN LAWYER ON HAND
The German legislative process is notoriously complex. To do business in Germany, you’ll have to comply with multiple levels of legislation, from the local to the national to the international. Your obligations will include filing an Exchange of Goods report each month to the national government, covering all exports to Germany.
This legal burden is tiresome, and may seem like a good reason to avoid expanding into Germany; however, your competitors probably feel the same. These legislative walls are difficult to get past, but they also create exclusivity. Make sure your German legal team is up to snuff, and the benefits will be well worth the burden.
4: TAKE ADVANTAGE OF SEO
As those of us doing SEO are well aware, ranking in English can be near-impossible. The English market is saturated, and it takes a very special piece of content to end up anywhere near the top of Google’s first page of results.
The German SEO market is a different beast. German SEO is far less competitive, and it’s much easier to make it onto Google’s front page. In Germany, social media is less popular and less business-relevant than in the English-speaking world, so SEO is poised to become a massive draw to consumers. In the German market, a strong SEO strategy has the potential to bring in whole untapped markets.
5: HAVE A SOLID RECRUITMENT STRATEGY
Germany has an extremely low unemployment rate, now standing at 6%. There’s also a high culture of corporate loyalty—German employees tend to be loyal to employers and stick with their jobs for a long time. Furthermore, as we’ve already discussed, the youth demographic is small, and the talented youth demographic even smaller. Due to all these factors, it can be challenging for companies new to the German ecosystem to attract top talent.
To succeed in the German marketplace, you’ll need some kind of recruitment strategy: hire a talent manager, offer great benefits, or scout out colleges. Germany really is a sellers’ market as far as employees are concerned, but if you take hiring seriously, there’s no reason you can’t recruit a fantastic team.
6: ADAPT TO THE CULTURE
You don’t want to reinvent the wheel: German consumers have a particular way they like to do business, and if you deviate from it, they’ll notice.
German consumers value quality, great customer service, social/ecological consumption, loyalty programmes, and multiple payment methods. Look at what popular businesses in similar industries are doing, and make sure to provide an equal offering. Keep in mind you’re the one coming to Germany; if you want to succeed, you can’t expect the consumer to adapt to how you were doing things in the UK; you’re the one who will have to change.
BREAKING INTO THE GERMAN MARKET AND BEYOND
All in all, the German market will hold you to an exacting standard. If you rise to meet it, you’ll gain access to a wealthy, friendly, and efficient market that by all indications is likely to keep booming. Now is a great time to expand into Germany: the competitive field isn’t yet saturated and potential gains are massive. Best of luck in your international endeavours!