German Market in Demand

Dr. Joachim Arnold | 05 Sep 2018 | European Perspective

Skyline in Frankfurt, skyscrapers

Germany continues to cement its reputation as one of Europe’s focal economic hubs; dedicated to multilateral trade, and welcoming foreign investment within a strong European Union. The openness to foreign companies provides the basis for a competitive market environment, where indigenous products and services’ companies are always innovating. As a result of this, Germany is a key investment location and with a consumer base of more than 82m people, there is much opportunity for foreign companies to build on their potential.

Despite emerging markets winning in relevant importance, European intra-regional trade and investment flows are still dominant, and many SMEs, as new exporters, are looking for expansion opportunities on their doorsteps. Around three quarters of all foreign direct investment in Germany originates from EU countries. The top sectors investing in Germany include Industrial Machinery, Metals, IT Services, Food and Textiles.

As a delivery partner to UK Department for International Trade, OCO Global is working with UK businesses on international market development projects and we have seen, in particular, a surge in enquiries for support exporting to mainland Europe. For most of them, Germany is the most attractive market. The growth in overseas companies expanding their operations in Germany is evident but doing business in Germany brings with it some challenges that need to be taken into consideration to succeed in this market.

The sales cycle can be more time consuming as German businesses tend to go through a period of intense testing and detailed considerations before taking a decision to source a new product or service. A local presence through a native partner or German speaking staff, that can build trust and a close working relationship with new customers is essential.

There is also strong competition through highly innovative ‘Mittelstand’ companies (medium-sized companies in German-speaking countries) which employ the majority of the country’s workforce and continue to enjoy growth and loyalty of their staff and customers. Finding the right local partner or staff to build your team is not easy, as the competition to source talent is intense, and requires lots of attention. Dedicating resources and time in the ramp up phase is vital for a successful market entry.

OCO Global Exporting can help overcome these challenges through our local connectivity and tailored exporting services helping foreign companies to Assess – Enter – Grow in the German market.

Get in touch for a free market assessment on the opportunities for your business in Germany.