29.05.2024

The German market, what to know before expanding westward

Key information:

  • German trade is characterized by high spending on research and development, which promotes innovation and competitiveness.
  • Before entering the German market, Polish companies must know and comply with specific laws and regulations, including VAT requirements and local standards.
  • When starting a business in Germany, consider setting up a local GmbH, which can increase confidence among German customers and partners.
  • Knowledge of business culture, customer preferences and business conditions is essential for successful expansion.
  • Successful marketing in Germany requires a locally tailored SEO strategy to build brand recognition.
  • An analysis of the successes and failures of companies such as Orlen and Jeronimo Martis shows the importance of adapting strategies to local market conditions.

Details below!

Why can the German market be crucial for the development of Polish SMEs?

Entering the German market are relevant to Polish SMEs because of the size of the German economy. Its size is growing steadily, as evidenced by the fact that it is the largest in the European Union i Fourth in the world in terms of GDP. Polish companies can see growth opportunities through trade with the German economy primarily through online commerce. What's more, the sophisticated insurance market provides solid protection against a variety of business risks, which is crucial for stability and business growth in such a competitive market.

Germany leads the EU in research and development spending, which translates into a innovation i competitiveness of goods from Germany. Expansion into this market can be beneficial for Polish SMEs, especially if their products are innovative or technologically advanced.

Poland-Germany trade exchange offers Polish SMEs access to a large and affluent consumer market, as well as the opportunity to work with business partners from abroad. Food products in the German market, trade in Germany and e-commerce are the areas where Polish SMEs most often find their markets.

In addition, Germany has favorable balance of trade and are an important export direction for Poland, which can make it easier for SMEs to gain market share and enter into relationships with German trading partners. It is worth noting that Germany ranks high in the Doing Business report. This indicates that there is a friendly business environment in German companies.

Analysis of the German market - key trends and opportunities

Expansion into the German online market offers tremendous opportunities for business growth, however, there are a few key aspects to keep in mind. One of them is translation of the offer, making it possible to reach German customers. According to data from the German Retail Institute EHI, there are as many as half a million online stores in a country with a population of 83 million. In order to conquer the market, it is necessary to meet high expectations of German customers, which is important to build lasting relationships with customers.

An important aspect for German trade is the methods of payment i delivery of goods to Germany. First-time customers accessing the website will also pay attention to the environmental protection i corporate social responsibility. Suppliers of German goods should pay attention to this, because even frugal people are willing to spend more money on a product if it has environmentally friendly packaging or if the delivery of goods is made by a shorter shipping route.

When conquering a new market, a Polish exporter should focus on innovative solutions i digitization in the purchasing industry. Online sales can increase by registering with e-Procurement systems or platforms such as SupplyOn that allow you to counterparty verification. German trading partners value not only the price, but also the reliability and quality of the products, which is an advantage of Polish goods.

Automotive, engineering and chemical industries are key to the German economy, attracting investors due to their rapid growth and their importance in industry and exports. According to report PKO The most important export commodities are motor vehicles and medicines.

It should be noted that insurance market in Germany is the second largest market in the world, as it attracts numerous international corporations and investments. This fosters its innovation and competitiveness, leading to the development of more diverse and customized insurance products.

Laws and regulations. What do you need to know before entering the market?

Before entering the German market, Polish entrepreneurs should pay attention to meeting a number of formal requirements, EU regulations and regulations specific to the country. The basic element is sales execution as part of an intra-Community supply of goods (WDT). This requires entrepreneurs to register as EU VAT taxpayers and meet the conditions for benefiting from the preferential VAT rate 0%. It is important to have a valid buyer identification number and proper sales documentation. In addition, goods exported to Germany must meet local standards and regulations, and their proper labeling is guaranteed by the German Institute for Quality Assurance and Labeling. It is also necessary to product registration in Germany's central packaging register, which involves additional fees and the search for packaging recycling business partners. Failure to register goods can result in a severe fine of up to €200,000.

How to successfully start a business in Germany?

First of all, it is worth noting that Polish entrepreneurs can conduct online trading in Germany, using company registered in Poland. This is facilitated by voluntary registration in the OSS VAT system, designed for companies with annual sales exceeding €10,000.

It is worth considering the establishment of german GmbH, the equivalent of a limited liability company. This can bring additional benefits related to, among other things increase confidence among German consumers. The process of establishing a GmbH involves several steps starting with the creation of the Articles of Incorporation, a visit to a notary public, payment of share capital and registration with the relevant authorities, such as: Handelsregister (Commercial Register), Gewerbeamt (Office of Economic Activity), Finanzamt (Tax Office) and IHK (Chamber of Commerce and Industry). Be aware of the need to comply with various legal requirements, which include notification of company identification data and obtaining the appropriate permits and certificates These include filing with the Commercial Registry, filing a business registration with the Business Activity Office, obtaining a VAT number with the Tax Office, and becoming a member of the Chamber of Commerce and Industry. For entrepreneurs from other countries who wish to be self-employed, it may be necessary to obtain a visas for self-employment.

Business culture and practices are key to success

German business culture is based on professionalism and discretion. German trade partners value avoiding getting too emotionally involved in business conversations and maintaining an appropriate balance between the personal and professional spheres. In German trade, it is very valuable to punctuality, which is an integral part of German business culture. Being on time is a form of respect towards business partners and significantly affects the perception of the company.

On the other hand, when it comes to the aspect of offering, it is important, as in the Polish market, to tailor the offer to the specific needs and preferences of the customer. Offer personalization can help build customer trust and loyalty. Transparent communication with the customer and clear presentation of the offer can increase the chances of successful negotiations and deal completion. Understanding and applying these practices can be the key to winning the market and succeeding in Germany's competitive business market.

Marketing and brand positioning

A company entering the German market should focus on SEO investments, which brings many benefits. The most important of these is increased visibility of the site, which leads to increased traffic and potentially more sales. SEO optimization also improves the user experience, which can help increase the length of a site visit. In addition, building brand awareness and trust is key to creating long-lasting customer relationships especially when selling online.

According to an e-commerce report, SEO in the German market is a task that requires solid SEO strategies and accurate macro analysis of the company's environment. Without the right content marketing it is difficult to achieve the expected results. Before starting the positioning process, special attention should be paid to keywords that are different from those used when positioning a Polish website. Content created to attract new consumers, should not just be translated from Polish. It is necessary to carefully develop the German version of the company's website, taking into account the characteristics of the environment and the target group.

In the process of positioning websites in the German market, the following are also important digital marketing and URL structure. According to an e-commerce report by dziennikwschodni.pl, in order to attract new consumers, an address with a .de suffix, which allows SEO-friendly links, may be key.

Successes and pitfalls in the German market

Speaking of Polish-German trade, it is worth mentioning Orlen's successful expansion. According to DW report The company initially had difficulties with the decision to sell under its own brand logo, but after a short time the company has aligned its strategy with the expectations of German consumers. Changing the logo to the well-known STAR brand in Germany brought spectacular results. Orlen GmbH then recorded its historically best results ever.

Sometimes a company fails to successfully enter a market, and a good example of this is Jeronimo Martis. Despite attempts to enter the market by opening stores under the "Kaufhall" brand, the expansion into the German market was not successful for several important reasons. These were inadequate product fit, strong competition and lack of brand recognition. An additional aspect was management and strategy problems, which led to the end of the venture and the company's withdrawal from this market. The case of Jeronimo Martis has become a warning to other companies regarding the need to thoroughly understand and adapt to the specifics of the target market During overseas expansion.

Key to success for SMEs in the German market

Expansion into the German market is attractive prospect for Polish SMEs given the size of the German market and the dynamic growth of trade in Germany. Expanding into this market offers the opportunity to deliver goods to German consumers, allowing Polish companies to attract new customers and business partners. Successful expansion requires understanding of local regulations and consumer preferencesas well as Investment in innovative solutions and digitization of commercial processes. In conclusion, adapting the offer to the requirements of the German market can bring Polish entrepreneurs the opportunity to grow and expand their business in one of the largest markets in Europe.

With ConQuest Consulting, the German market is closer than you think

Prepare your company for successful westward expansion. Contact us, to shape the future of your business today!

Anna Slusarczyk

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