Germany is the largest country in Europe in terms of both population and economy. With a GDP of US$ 4.59 billion, it is the largest economy in Europe and the third largest one in the world.
Germany is one of the world’s largest exporters and at the same time a major importer. In 2023 Germany’s imports totaled US$ 1.46 billion and the top ten countries from which Germany imported goods include China, the Netherlands, USA, Poland, Italy, France, Czech Republic, Switzerland, Austria and Belgium. The top imports include electronics, industrial machinery, vehicles, fuels, pharmaceuticals and plastics.
If you are going to sell in Germany, don’t forget that you are not the only one offering your product, especially in some sectors (e.g. agribusiness) where it is often difficult to identify and communicate the USP (unique selling point).
Here are some important aspects to consider when exporting and selling in Germany:
Cultural differences to take into attention
If you are going to sell in Germany, keep the following points in mind:
- Surprises of any kind are not liked here: if a product is ordered in Germany, they want to receive namely it and not something else, even if it is the best modification over the previous one.
- Germans do not tolerate delays in shipment: often each stage of the procurement process is structured within a larger process in which reorganization of deadlines is not possible and each delay can bring serious losses to the company.
- Communication is crucial: every delay or unforeseen event must be reported immediately, even if it is a single day or a small problem.
- Value effectiveness: establishing a personal relationship with the customer may be a plus, but it is not the key to maintaining a business relationship.
Accuracy, efficiency and punctuality are keywords to keep in mind if you want to start exporting to Germany.
Language and geographical proximity are not enough to win the German market. Other parameters need to be considered:
1. Does my product bring value?
Before you decide to expand, you need to analyze the country thoroughly. Like most European markets, the German market is saturated in most sectors. Competition is fierce. A new product or service can only make its way into the market if it is able to push out another one. It is therefore even more important that the product has real added value.
The success case of the Swedish concern IKEA into the German market testifies to this. Although the start was not entirely successful, as a result of the shift in strategy from simply offering goods to promoting innovative solutions for home and household at an affordable price, Germans have become ‘hooked’ on IKEA stores and are happy to visit them. Today, IKEA Germany is one of the top ten most recognizable brands in Germany.
2. Understanding the regulatory framework
To export goods to Germany, you must first check the customs regulations that will apply, particularly customs duties. Common goods such as lampshades or light switches may fall into risky categories.
Some products, such as food supplements or foodstuffs, are strictly regulated. A sugar tax is currently under active discussion in Germany. This could lead to higher prices for products with a high sugar content. It is therefore necessary to be clear about the regulations to avoid unpleasant surprises.
3. Certification and brand registration
Some products require certification for admission to the German market, such as electrical appliances, individual protective equipment, measuring devices and medical equipment.
If you want to sell your products in Germany, it is also worth registering your brand name. Registration protects your brand from being copied, which increases the credibility of your company.
How to embark on a project to export to Germany
Do a little business reconnaissance as you may enter the market with unsuitable products or formats. You need to look at how the final product you want to introduce to the market is consumed, as it may be in a different category than the one it is usually assigned. For example, olive oil in Germany is not a common product and is categorized as a delicacy, so it is never sold in supermarkets in five-liter plastic bottles, but at most in half-liter glass bottles.
You have to sell what is in demand, you can’t change decades-old habits on a whim – you must adapt yourself.
Failure to understand local realities can lead to failure – as happened with the American retailer Walmart, which opened 85 discount stores in Germany in 1997 and left the German market in 2006, having spent about US$1 billion on a failed expansion. The reason for the failure was a lack of understanding of the business culture in German companies and labor laws, as well as a misperception of customer expectations.
Success in the German market: the art of adapting to local realities
Germany, with its strong economy and demanding population, is fertile ground for companies looking to expand their horizons. However, success in this market means more than just taking your offerings into new territory. You need to capture the essence of German consumers’ preferences and requirements to make sure your products or services resonate with them. Adaptation is king, and it can mean the difference between a resounding failure and a thriving success in the German market.
The McDonald’s chain is hugely popular in Germany. But it hasn’t always been so. Present on the German market since 1971 and having become the largest European segment, McDonald’s Germany began to lose ground between 2011 and 2014. The reason was the growing interest of Germans in organic products. Having studied the situation, the company management decided to focus on healthier food to attract the attention of the health-conscious audience. Organic positions such as the organic McB burger were introduced to the menu, and the famous red-yellow logo was changed to green-yellow. Packaging used the ‘bio segel’ (‘organic label’) and employees wore aprons with phrases like ‘ich arbeite im Bioladen’ (‘I work in an organic establishment’). Today, McDonald’s brand awareness stands at 98% and 62% of Germans confirm that they like to visit the brand’s restaurants on a regular basis.
Optimizing your offerings according to local preferences
As it was mentioned before, if you want to succeed in Germany, you need to adapt your products and services to local preferences. Here are a few steps you should take:
- Competitive analysis: determine what local and international competitors are doing to meet the expectations of German consumers.
- Market research: conduct in-depth market research to understand the specific needs and preferences of local consumers.
- Gather consumer feedback: use consumer feedback to tailor your offers and increase satisfaction.
Use proven solutions to improve your marketing and lead generation in Germany by applying modern digital tools such as EasyBusiness and Sales Accelerator by Kompass populated with more than 1,9 million of German companies and 800 thousand contacts to find new customers easily or showcasing your products in de.kompass.com with 300 thousand B2B German buyers searching for new suppliers monthly.
Targeted communication: the key to success in the German market
Effective communication is crucial to connecting with the German consumer. Here are some ways to adapt:
- SEO and digital advertising: adapt SEO strategies and advertising campaigns to the search trends and preferences of German consumers.
- Social media and influencer marketing: choose the right platforms and influencers that resonate with the German public for better engagement.
- Targeted communication adapted to the cultural nuances and expectations of German consumers is vital to building a strong and lasting presence in this market.
Local cooperation and partnerships
Local collaboration and partnerships and leveraging multicultural marketing expertise can accelerate your success in Germany. Here are some options to explore:
- International marketing agencies: Contacting international marketing agencies that offer 360° communication can be a wise strategy to effectively access the German market and capitalize on multicultural experiences.
- Strategic partnerships: Many companies have found success by partnering with German counterparts, sharing expertise and resources.
To summarize
Entering the German market is a promising venture for a company looking to expand its horizons. Success in Germany depends largely on the ability to understand and align with the expectations and demands of local consumers. Adaptation is not just a strategy, but an imperative if you want to create a strong and lasting presence in this promising German market.
Every step – from optimizing products and services to targeted communication and establishing local cooperation and partnerships – is crucial, and Kompass is here to help you every step of the way.
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