Expanding your American business in Germany

Known as the beating heart of Europe, Germany is widely regarded as a cultural and economic powerhouse. Due to its proximity to western European economies such as France, Italy and the Benelux countries, it is considered a primary target market.

Germany is a world leader in innovation and it is also the fourth largest economy in the world. Even the recession that has plagued Europe over the past decade failed to topple the German economy, with the country even having a growth rate of + 1.9% in 2016.

The idea of ​​expanding into the German market seems very attractive to many companies and it is not surprising why. However, there are several factors (i.e. purchasing behaviors, differences in culture, laws, etc.) that need to be considered first before you start branching out and taking your business abroad.

In this blog, I will take a closer look at the top 6 factors to consider when starting a business in Germany.

Let's dive into:

Protection of personal data

Germans don't play when it comes to protecting your personal data. If you plan to install an e-commerce website in Germany, prepare to face many barriers to online sales. Various federal laws protect personal data in the country; Remember that if you are going to require the customer information that is necessary for the sale.

Complicated regulations

One of the biggest obstacles you will face when setting up a business in Germany is the abundance of regulations. The law requires that companies that export to Germany comply with national (DIN), European (EN) and international (ISO) standards. These countless regulations explain in part why the work culture in the country seems so strict to foreigners.

Tradition and innovation

Germany is a leader in technology and innovation in different sectors, particularly manufacturing. Its economy is underpinned by a wide range of businesses including construction, automobile manufacturing, healthcare, and renewable energy technology.

Expansion of their American business in Germany But despite technological advances in the country, Germans are lagging behind in terms of digital technology. Its economy still depends heavily on the manufacturing of the Mittelstand, also known as small and medium-sized companies, sectors that still have difficulty participating in the digital transformation process.

electronic commerce

E-commerce is a growing industry in Germany, accounting for 25% of distance sales. If you hope to establish a retail business in the country, expect to have well-established rivals in a very dense distribution network. You can choose between different types of stores such as shopping malls, discount stores, general and specialized department stores, etc.

German culture

Adapting to German culture is key if you want your business to be successful. More than anyone, the Germans demand quality in everything, although they have high expectations, they also take into account the price. Research has shown that German consumers are willing to visit different e-commerce websites of physical stores just to make sure they have chosen the best price / quality ratio.

language

Finally, regardless of the service or product you want to export to Germany, be sure to translate all of your company's details, website, and content. Instead of just focusing on localized content, don't forget to transcreate all of your marketing campaigns to speak to more audiences.

Doing business in Germany has many benefits, stemming from the country's strong business sectors and economy, high skill levels of workers, and core values ​​of German business culture.

If your American company is expanding to Germany, the success of your effort will depend on a solid understanding of these important values. It will also depend on your ability to interpret your influence on business interactions, something you can learn through different initiatives and intercultural awareness courses.