Germany is the fourth largest economy in the world. With over 80 mlliion consumers and a GDP per capita of around USD 45.000, it is Europe’s biggest market and hence an attractive target for foreign companies.
Being successful in Germany is not an easy task. The market differs in many aspects from other larger economies, as the following examples suggest:
Price-level / product range: the price of certain consumables like food is – compared to other countries – very competitive. Additionally, German consumers do not necessarily value choice over price. Walmart experienced this recently. They were unsuccessful in entering the German market, since their entry was dominated by ideas valid for the U.S. Also, its German competitors opted for smart strategies to keep Walmart out of the market.
Industry organization: the paper industry in Germany, for example, is very unique in the way that sales channels are dominated by a few large wholesale companies. Without taking this sales structure into account, one can hardly sell to the German market.
Legal aspects: Germany’s tax law is famous for being overly complicated – and it certainly is. Germany’s corporate law and some of its administration is partly outdated. For example it is very difficult to track companies when they change their place of registration. Germany’s social legislation and its regulations on worker’s participation are unique – and allow workers a great deal of influence on the general management of the company. There are vast amounts of regulations that apply to companies with more than 10 employees.
Sales approach / consumers: German consumers’ decision making process is characterized by a lot more accumulation of information than in other countries. Product presentation needs to take this into account.
Contact us, if you are planning to enter the German market.
Your contact: Felix Küsell
T: +49 (0)30 4005 490