Jack Ma, the founder of the Alibaba group, once said “in other countries, ecommerce is a way of shopping. In China, it’s a way of life”. In this interview Nenad Cetkovic, the Chief Operating Officer at Lengow, shares his expert insights on the changes in ecommerce technologies and tools, and tips on how European businesses should approach the Chinese market to seize its incredible potential.
Paulina, E-commerce Berlin: Lengow is a SaaS solution for managing and optimising the profitability of ecommerce sites. You help brands and distributors improve their performance, automate their business processes, and grow internationally. What are the roots of Lengow’s success and international growth?
Nenad Cetkovic, Lengow: In 2009, there were only a few tools for online retailers looking to distribute their products on various different channels. So, our CEO Mickael Froger founded Lengow, a solution to optimise the visibility and profitability of ecommerce sites. We are entering an era of coherence and centralisation: there are many tools and services that retailers use on a daily basis, but to simplify their work and to boost their productivity, they need a solution that gathers all their services together in one place, to get the best of each one in a single solution. From there, it was only natural to expand internationally, so that retailers from all over the globe could benefit from our multichannel platform.
Today we are taking the solution to the next level. With revamped and more intuitive features and an interface that’s easier to use, the platform provides a new level of automation capability for online retailers. It reduces the bulk of time-consuming product data management and automates processes, analytics, and campaigns. In the new, updated ecommerce automation platform, Lengow have also added an app store that integrates major ecommerce tools, allowing customers to centrally manage and automate all ecommerce processes within a single platform. The Lengow platform integrates tools, services, and partners, including product listing translation, delivery and/or payment management interface, and analytics services within a few clicks. All in all, Lengow is a true all-in-one platform for online retailers.
As the Chief Operating Officer at Lengow, you are in charge of developing Lengow's presence and client portfolio in more than 40 countries in Europe, Latin America, and Asia.
How large is your team? How do you and your team work to support clients from so many countries – and so diverse regions of the world?
Our team is made up of 120 people of 20 different nationalities, so having native speakers is a definite bonus. We’re able to offer clients assistance in their native language, and we can adapt and optimise product catalogues to the different requirements and regulations of channels in different countries. The whole idea behind the Lengow product is adaptation – it’s what we do best!
You are also a Strategic Advisor and Board Member for startups in ecommerce businesses. Based on these experiences, how would you describe the contemporary startup scene? What is most striking for you about startups in ecommerce nowadays?
One of the most prominent trends is the very fast division of the market. Nowadays, there seems to be more and more SaaS software solutions emerging every day to address the needs of online retailers. There are no more “generalist” approach startups. Everybody’s focusing on a very specific issue to solve. This, at the same time, creates another issue for retailers: how do I handle, manage and/or organise all the applications that I need to use to have a state-of-the-art organisation? And at the same time, it’s beginning to be more and more complex for a decision-maker in the ecommerce industry to stay updated and aware about all technologies that can boost their business and its sales. And as these technologies are everywhere, the issue is spreading far and wide both in online and offline commerce.
Every year, new ecommerce startups and companies appear. “Success stories” are easy to spot, but it is hard to find the negative examples. Based on your observations, what are the biggest sins – and most frequent mistakes – made by startups? What is it that kills new companies in ecommerce?
As mentioned in my previous answer, the main mistake made by startups is forgetting to actually listen to the clients. You may have a perfect technology which may address lots of clients’ needs, but you mustn’t forget the world doesn’t revolve around your business. Your client and your product will need to work together to fit in with and respect the client's business model, based on their needs and those of third party apps. Irrespective of how efficient it may be, your solution will never be set as a standard if it’s not open enough. If your prospective clients need to change all their habits or behaviours to embrace your solution, then you’re facing a potentially fatal sales problem.
On 2nd February 2017 you will appear at the E-commerce Berlin Expo with a talk titled “Cross Border Ecommerce: Making the Most of China’s Potential”. This event is one of the biggest gatherings of ecommerce professionals from different countries and companies of different size – both big international players and SMBs. What have been your motivations behind the choice of this specific topic for this specific event?
I think China is becoming an increasingly popular topic in the European ecommerce, especially with events like Single’s Day that continually achieve such incredible results. This year, Single’s Day revenue reached over $14 billion, in just one day. European retailers are starting to see how lucrative the Chinese market is, so now we just need to focus on how to break the borders, and start selling in China, as it’s very different to selling in Europe or Latin America. Hopefully, my presentation will give European businesses an insight into the market, and help companies looking to expand there to take the first steps on this adventure!
It’s estimated that, by 2018, the Chinese ecommerce market will be worth 871 billion Euros, representing 40% of the global ecommerce market. By 2020, the Chinese e-commerce market is expected to be larger than ecommerce markets in the USA, Japan, Germany, Britain and France combined. What makes this development so fast?
Aside from the fact that China has such a huge population, with approximately 1,382,323,332 people, China has always been a fast-developing market. The fact is, people simply love to shop online in China. Jack Ma, the founder of the Alibaba group, once said “in other countries, ecommerce is a way of shopping. In China, it’s a way of life”. China has always been one step ahead in technological developments, and with a boom in m-commerce, online shopping is just getting easier and easier to do. 69% of Chinese consumers have purchased a product or service through their smartphone, and this is only set to increase as technology develops to make online shopping faster and easier.
How can European retailers appeal to the Chinese customers?
The best way for European retailers to appeal to Chinese shoppers would be to sell products that are authentically European. For example, German retailers would do well to sell products that are authentically German - the phrase ‘Made in Germany’ is associated with efficiency, creativity, and order by Chinese consumers, and it gives the impression of high quality products from the core of Western Europe. In general, European retailers would also do well to offer discounts on their products, no matter how small. A lot of Chinese consumers love to feel as if they are getting a bargain, especially amongst older generations.
As an expert in cross border ecommerce, what would you recommend to any retailer planning to sell to China? What steps should be taken as first?
The first step to selling in China would be to establish a relationship with a local partner. For example, selling on a Chinese marketplace is the ideal way to enter the market with minimal risks, as your products will be shown on sites with a pre-established audience. Other things to do first would be to make sure you have a native speaker to translate your product catalogue, and work out your delivery and logistics, as Chinese consumers are used to fast delivery, with some marketplaces offering same day delivery in some of the larger Chinese cities.
What type of products or services from Europe are most likely to succeed on the Chinese market?
Luxury goods are one of the most popular foreign imports in China as a lot of consumers like to show off their wealth by buying foreign brands. Certain designers such as Dior and Mulberry have picked up on this, launching campaigns on the no.1 social media platform in China, WeChat. There are a lot of counterfeit products in China, and as such, 61% of Chinese consumers are willing to pay more for designer goods that are imported from their origin country. A lot of pregnant women in China also like to buy milk powder and vitamins online, so ecommerce sites in the pharmaceutical industry would also do well to distribute their products in China.
And finally, new year means new challenges – and new opportunities. In your opinion, what will 2017 mean for ecommerce?
2017 will continue to see a lot of trends we already saw rising in the last quarter of 2016. First of all, emerging marketplaces are a strong trend. Many are emerging from France as a lot of worldwide leaders in these technologies are French, but more and more international companies have told us during clients meetings that they’re looking to go more in that direction: their objective is to better monetise their audience. This rise will also mean more cross-border ecommerce opportunities making it easier and easier for retailers to sell internationally.
At the same time, we’ll also see a lot of technological moves in the GAFA band, where companies like Facebook and Google are really hunting after Amazon trying to catch up with them to become THE shopping destination. New features, like marketplace features, buy buttons, and more and more advertising formats means there are a lot of new things to come. We also shouldn’t forget companies like AOL and Microsoft with Bing Shopping, who may present us with some great opportunities in 2017 to increase sales. Last but not least – looking a little further ahead – innovations like chatbots and VR are something retailers should actively follow, as these technologies are being developed even further, with major advancement in AI and its features.
We have had a great and exciting year in 2016, full of tech news which influenced the whole e-commerce world. In this article we recap some of the more important and influential innovations that were predicted for last year and are further shaping the future and evolution of e-commerce.
We take a look at six of the hottest trends that go hand with one another. Given that the total value of retail ecommerce sales worldwide is projected to reach 2,48 trillion USD in 2018, the question you need to be asking is: what share is your business going to be?
If you understand the upcoming development of e-commerce you’ll understand where and how to improve and upgrade all spheres of your business - sales, delivery, payment, marketing, and data analytics. But don’t worry, there are plenty of guides on how to succeed in this exciting industry.
Check following trends and get ready for your big success!
1. Mobile Commerce
The word ‘mobile’ comes up again and again, and for good reason. Indeed, the M-Commerce trend has been on a non-stop rise since 2014 and shows no signs of slowing. The dominant growth in European online sales has been the source of significant sales via mobiles (+88%) compared to laptops (+6%). Much of this has to do with Google’s development of a new indexing algorithm for mobile searches which was launched November last year. Given these facts it only emphasizes the need for e-commerce companies to focus on achieving a high ranking for their store on devices and search engines tailored toward mobile use.
It’s no longer about responsivity and optimization, but a shift toward mobile friendly apps and service is an absolute must, especially for up and coming businesses. To highlight its importance, marketers even have their own term for it: mobile engagement strategy. It’s about making mobile customer experiences as positive as possible, and as we enter into 2017 this point will become even more relevant as a decrease in desktop activity accompanies an increase in the usage of mobile devices.
To make things easier, try incorporating these 5 tips on how to improve customer mobile experience.
2. Artificial Intelligence
Chat bots & Personal Assistants
As the American tech giants opened up the use of their APIs to developers in 2015, so too was 2016 historically marked as the year chatbots came onto the scene. Founded on basic principles of artificial intelligence, chatbots were launched to help customers shop, provide help, and to engage them with a brand. It’s interactive messaging takes place via social media such Facebook, Twitter, WhatsApp and Google Allo, all with the purpose of putting a customer at ease by making them feel as if they’re talking with a real person. The more customers interact with the bots, the smarter they become, enhancing their ability to provide useful services - most bot programs incorporate an extraordinarily steep learning curve, letting them learn and adapt to human users quickly and efficiently. And, in an otherwise cold and impersonal world of computerized commerce, they also provide an element of humanness.
In an era when people are using messenger apps more than social networks, chatbots are great business opportunity for the upcoming year! If you don’t yet have one, there are already a number of platforms that allow you to create your own chatbot.
Something you can expect to hear a lot in 2017 is: “websites are replaced by apps, and apps are replaced by bots.” This, naturally, has led to the production and design of personal assistants - and you’ve probably had exposure to some of these yourself.
The first thing that might come to mind is Apple’s Siri, Microsoft’s Cortana, Amazon’s Alexa, or the movie Her. I think the last one is the best representation of what the near future holds in store, and by association, the future of e-commerce. Additionally, mobile personal assistants have also spawned the phenomenon of talk-to-machines which can interact with users, and will be a huge trend in 2017.
But how can you actually apply this technology to your business? Personal assistants can recognize speech and act as browsers, just to start. As a result, search optimization is often the first and easiest factor to take into consideration - specifically, optimization of your product attributes so that the PA can easily find the product the consumer is looking for.
3. Mobile Ordering & Payments
What’s more valuable than convenience? In a word, time. Especially for busy people who live fast and work hard, finding extra minutes in the day that they can spend on recreation or fun has become a huge issue in the dog-eat-dog world of e-commerce. Does that sound like you or your customers? These days time management is drilled into us - we just want to grab a cup of coffee on our way to work and not have to waste any extra time waiting in a queue. The third trend in our list offers a solution to this problem - order-and-pay apps.
The first one to use this system was Starbucks and it has sky-rocketed in popularity. The next biggest follower of this trend is McDonalds which plans to launch their long-awaited order-and-pay app in 2017.
“Every month of Q2, Starbucks has processed 8 million Mobile Order and Pay transactions, up from 6 million a month the previous quarter” - Adam Brotman, Starbucks’ chief digital officer.
Implementing these kinds of tools into your business model doesn’t come cheap, and involves professional development, but being a “first-mover” definitely pays off in the long run.
4. Loyalty Programs and Personalization
2016 taught us how important personalization is. Consumers are overwhelmed by all the content around them, so they become rather selective and discriminating in their tastes. Only those products or companies who can make an impression and stay in the customer's mind will able to flourish. And that’s a challenge for 2017. One of the keys to success is personalization and if the customer feels that he or she is valued it will be harder for them to leave you.
According to DMNews, “53 % of consumers feel that it’s important for retailers to recognize them as the same person across all channels, and 78% are willing to allow retailers to use information from their in-store purchases to provide a more personalized experience.”
The issue is, how can you manage a personal approach towards hundreds of customers at once? Your data analytics can go a long way towards catering to individual tastes and experiences, but depending on the size and complexity of your company it can be difficult to get a comprehensive picture about your customers. Luckily, a number of technologies are slated for 2017 which will offer comprehensive solutions across a number of useful tools and services. The goal of e-commerce companies then is to find the best apps for analytics, customer behaviour tracking, and loyalty programs, and to set a proper marketing strategy. The sooner you start, the more successful you’ll be.
Customers want to be engaged with the brands they love so as long as the benefits flow both ways. This is where your marketing department comes into play significantly. Next to email and social media marketing, search marketing and ad display marketing will be indispensable in 2017. Read some advice how to split your marketing budget in 2017.
5. Social selling
As many people are familiar with social networks, they consider it a browser, a place where they can check products and brands. The goal for any entrepreneur then is straightforward: once a potential customer visits your page, make it impossible for them to not want to buy your product. Another hint for optimizing your Facebook product page and upgrading product attributes on other social sites you use is to implement buyable buttons.
While social selling in 2016 was provided in a way that was inherently intuitive, projections for 2017 indicate that a more strategically oriented approach will prove more effective in the future. Social selling aims to translate into real sales and marketing channels by putting an emphasis on KPIs such as leads generated and revenue.
Additionally, social selling is tightly connected to messenger bots, as mentioned above. Being available 24/7 to address customer concerns or questions is a must, especially if you want to sell your products globally, and the use of automated apps and software makes this a reality.
6. Same-Day Delivery
The technology of shipping and payment has also experienced expansive growth. As a rule, in a world that is so interconnected in real-time delivery speed has becomes the key factor in whether or not customers choose to buy your products. Delivery automation is a significant trend in this area. What do we mean by this?
Delivering products to the customers costs money, both when dealing with carriers and when international clients or customers are involved. Dealing with the “human factor” and face-to-face transactions, however, always presents some issues such as traffic jams, damaged products, time lost while drivers need to rest, limited amount of vans or vehicles, etc. Of course, many carrier services adhere to a high degree of quality and punctuality, but using them generates costs that you have to count into your product price. Offering free shipping is something taken for granted these days by customers, which may be another factor in determining whether or not you become their “one and only choice”.
Looking ahead, an automation of delivery is your best choice, sooner or later. The pioneer of this idea was none other than Google Express, followed soon after by Amazon Prime Air. With drone usage comes legislation issues, however, as it’s not legal to fly a drone without a special permission from the Federal Aviation Administration in the U.S., and other countries have their own legalities as well.
At first glance, it may seem like something out of science fiction to have mid-sized businesses providing delivery via drones. And yet, over the time, it will only become more affordable for carriers to replace trucks with drones or for companies to purchase their own drones as the technology improves and becomes more accessible. For all you tech lovers, 2017 will be a year of unmitigated progress. Be sure to keep your eye on this trend!
Thank you for reading this article to the end - I know it’s rather extensive but hopefully it’s given you an informative and exciting glance at what’s to come. Being successful in e-commerce isn’t easy but it’s applications are numerous. Now that you know some of the more interesting trends for 2017 and some tips on how to follow them, be sure to keep learning, start trying new things, and don’t forget to look back on your data to evaluate your progress. Good luck and have fun!
Choosing the best eCommerce platform is as subjective and tricky as trying to find the most beautiful woman in the world. eCommerce solutions comparison shows that each of existing platforms has its own advantages and strong points suitable for some clients but totally improper for others.
All e-commerce platforms may be divided into 2 big categories according to code and data access:
- Open source solutions
- Hosted solutions.
‘To host or not to host?’ - this is an eternal question, since it’s a choice between the complicated freedom and limited simplicity. If you prefer an Open source platform, you are not obliged to host it and you can delegate hosting responsibilities to the company that has developed the platform, meaning Enterprise versions of Open Source products that provide full customisation freedom and take care of store hosting. Hosted solutions like Shopify or Bigcommerce offer a narrower range of customisation opportunities, but since most if the hosted out-of-the-box solutions have pretty standard functions to offer, a hosted eCommerce platform can become the best choice for you.
For those of you who are not looking for an easy way, we have compared TOP 5 Open Source eCommerce Platforms:
Magento is a well-known enterprise-level player and it is a great fit for large-scale retailers with high sales load.
This platform has already gained recognition of the world’s leading brands and it is capable of handling massive amounts of data and traffic, which is considered to be one of the most important requirements for big enterprises. However, such success is quite predictable stores built on Magento can easily handle up to 4M page requests and 50K orders PER HOUR! Such high performance is a proven advantage over other platforms, and magento keeps its position as one the most robust eCommerce platforms.
Furthermore, it has a very high security level and in case any detects or vulnerability issues occur, the security team immediately reacts to them and launches security patches. Due to these regular updates Magento stores can be protected from malware attacks.
Magento is fully customizable and scalable, which might seem to be a strange advantage over other open source platforms which claim to be flexible as well; but keep in mind that all of them have some restrictions while Magento is absolutely tailor-makeable. This customization freedom is another side of the medal though, since the cost of adjustments may be quite high. Professional Magento development with its $60-120 hourly rate is considered to be relatively expensive in comparison with other platforms’ development which can cost 2-3 times cheaper. But such investments in Magento base store will pay off with increasing sales rate, time and money saved due to lack of unnecessary operations and automated processes.
OpenCart is a lightweight system and it requires less resources than Magento, but it can also serve a limited amount of users and it has certain restrictions in the number of products being handled and your store’s bandwidth is not promising a very high performance.
In general, OpenCart looks like a great solution for startups and small companies that are going for independent web store development. The tremendous advantage of this platform is its clarity and user-friendliness, and the fact that it’s suitable for less experienced users. Also, it can save your a ton of money, since its development costs about $10/hr. Its another obvious advantages for novices is that its management is clear and intuitive due to convenient Admin panel.
WooCommerce is the most highly used tool in the eCommerce category worldwide. Its community includes a lot of professional developers who can release vast array of options and customizations for your web store and both of them are equally flexible with the wide range of ready solutions, so if you couldn’t find the required feature installed by default, it’s highly likely someone has already developed such extension and it is available at the system marketplace. And this huge community can easily help you to resolve your issues. WooCommerce allows to uploading and managing an infinite number of products, run a blog, perform SEO and marketing activities.
WooCommerce is a leading eCommerce platform in the entire web due to its big target audience of WordPress users and small companies that are familiar with this CMS. All you need to do is install a shopping cart plugin, run and customize it to your requirements and you are ready to create products. Manage orders, coupons, reports, inventory, linked products, shipping, settings, add-ons, add tags and categories to all of your products effortlessly.
Woocommerce security mainly depends on the hosting company.
If you’re new to eCommerce environment or you targeting on a marketing niche in general or have a slim range of products, it may be reasonable totry out WooCommerce.
Prestashop numbers about 250.000 customers, 30.000 Community and 850.000 forum members. Despite the fact that it extends to more than 200 countries and has been translated to 65 languages, Prestashop community forum is only available in English and French.
Hire a PrestaShop developer will cost you less than hiring the one for Magento, but you’ll have to pay those extra money for quite expensive modules for this platform.
PrestaShop is pretty easy to set up if the hosting company supports one-click installation, but in order to install it manually, you must have technical knowledge.
There are about 11 306 web stores built via Shopware. From the first glance it may seem like an unfair competition with other platforms, such as Magento or WooCommerce, but what if we stopped comparing platforms globally and scaled this research down to a specific country? If we take a closer look, it becomes clear that this competition has a distinct local character on the German eCommerce market, since there are 13 463 live Magento stores and 7 848 active Shopware stores in Germany. And these numbers are impressive, especially if you pay attention to the fact a big part of new Shopware adherents actually switched from the Magento platform. Shopware mainly targets on German market where it owns 3.76% share.
Shopware developes its community and its events are quite similar to those held by the Magento. Shopware community is mostly German speaking, so it’s quite challenging to find information and user reviews of this solution, especially in English.
This platform still looks like a mysterious eCommerce platform and you might have heard its name before but it has always been complicated to describe its key features. Keep in mind that for bigger projects you will need to use paid editions, so if you’re going to build a multi-store system, be ready to go to an expense of a license that significantly raises the initial costs. Also, despite the Shopware’s flexibility and prominent design opportunities its usage is limited geographically to german-speaking countries.
Average Shopware developer hourly rate is around $35-70.
Less than a month left to the E-commerce Berlin Expo: on 2nd February, Station Berlin will be the venue for the second edition of the e-commerce trade fair that gathers the biggest
e-commerce companies in one place.
This year, the organizers expect 3,000 visitors and 90 exhibitors. These include the representatives of Deutsche Post, Rakuten Deutschland, Idealo, Semrush, Freshdesk, PrestaShop and Handlerbund eV.
The visitors will also have the opportunity to participate in presentations covering the current e-commerce trends. Leading industry experts will give their talks and share their expertise on as many as four stages.
One stage will be dedicated to selling on different markets. Hugo Smoter, CCO at Spreadshirt, will talk about the influence of cultural differences on sales. For these purposes, he will compare the German and the American sales strategies.
There will also be a dedicated panel session on international expansion, moderated by Oliver Prothmann, President at BVOH. The speakers invited include Karl Wehner (Alibaba Group), Roman Decker (Schneider Group), Dominik Johnson (Yandex) and Nenad Cetkovic (Lengow), who will focus mostly on China and Russia.
Other experts such as Annegret Mayer from Handlerbund AG and Nadine Litchfield from Germany Trade & Invest will focus on the German e-commerce market. There will also be a joint talk of Konstantin Guratzsch and Christian Schlueter (Xing), and Laurence Kozera (Foucault) from Google who will deal with AMP, i.e. Accelerated Mobile Pages.
The experts will also present the most up-to-date strategies for e-commerce companies. Bjorn Espenes (FINCH) will talk about programmatic advertising, Karsten Koehler (HubSpot) will elaborate on the topic of personalized ads, while Fernando Angulo (SEMrush) will discuss the importance of SEO in e-commerce. Philipp Hädrich (Home 24 AG) and Emanuel Koechert (Smartly) will in turn focus on how to scale advertising in the social media.
A detailed agenda and the list of speakers and exhibitors are available on the official website of the event: ecommerceberlin.com
Anyone interested in participating in the event should also register here. Participation in the event is free of any charge, but the number of tickets available is limited, so it is best to hurry up and register as soon as possible.
To stay up to date with the event, follow E-Commerce Berlin Expo on Facebook and Twitter.
The strategic partners of the event include: BEVH, Meet Magento Association, Bundesverband Onlinehandel, SIBB and Handlerbund eV. The event takes place on Thursday, 2nd February 2017, from 9 to 5 at Station Berlin in Berlin, Germany.
So you still cannot decide whether to start your business in Germany or not? Turkish, Chinese, Japanese, Indian and American companies are already here – and succeeding. In this interview with Nadine Litchfield from Germany Trade & Invest you will learn how to get free support when starting up in Germany and how to best attract the German customers.
Paulina, E-commerce Berlin: I’ll start in a provocative way: compared to other European countries, why is it worth running a business in Germany, especially in e-commerce?
Nadine Litchfield, Senior Manager, Germany Trade & Invest: With 68 million people (84% of the German population) online on a regular basis, Germany boasts not only the most internet users in Europe, but also the greatest e-commerce customer potential. Germany is also responsible for around one quarter of all European B2C e-commerce revenue. The A.T. Kearney Global Retail E-Commerce Index 2015 identified Germany as Europe’s second largest online market behind the UK – but with almost triple the UK’s current growth potential. Germany has the highest total purchasing power and is the biggest market in Europe with 82.2 million potential customers.
There are strategic considerations too. Germany is located in the center of mainland Europe, which offers a number of practical advantages for companies to expand into and deliver to the rest of Europe. In today’s e-commerce world, where shipment time is crucial for customers, setting up a warehouse or a logistical facility in Germany is beneficial.
Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. What do you do? How do you attract business to Germany?
In our experience, most retailers (online as well as offline) are experts in their market but need support in the individual local customs, for example tax and legal frameworks or visa regulations for employees, or even ways to get into the local market.
We function as the ‘man on the ground’ to foreign investors, the local contact who knows the market and market conditions, speaks the local language and has the local connections, for example to trade associations, that make the difference and facilitate market entry for a potential investor. Our services range from first market information for an interested investor to the final location selection for the project. We see ourselves as a “one-stop agency” that supports the investor closely in every stage of the decision-making process. We help attract business to Germany by informing potential investors about the advantages of an investment here at trade shows and conferences all over the world.
What are your responsibilities as the Senior Manager Consumer Markets & E-Commerce at Germany Trade & Invest? What does your everyday job entail? What do you like in it?
I work with companies from all over the world which are active in consumer products both online and offline and which would like to learn more about the German market in order to decide where in Germany to set up their business. The work entails keeping up to date with current trends and developments in Germany in order to be able to inform clients accordingly, as well as listening to their needs and matching them with the right information. I visit conferences and trade shows to connect with foreign companies who intend to set up a subsidiary in Germany. Sometimes, the investing company knows exactly where it would like to set up their business but sometimes that’s a longer process. What I like about my job is that I get to meet so many diverse companies and people from different countries and cultures. I get to learn about their story, product and business model, their motivation and their objective of setting up a business in Germany. Every day and every project is different: I work with small companies, with young designers and start-ups but also with big international players, some of them family-owned. It makes me very proud when I see their first facility open, or their first advertisement on TV, or their website translated into German. Knowing that I have been a tiny part of this development and seeing the companies succeed in the German market is a good feeling.
What are the statistics for new businesses in Germany? What countries most often seek growth opportunities on the German (e-commerce) market? What’s the share of big players – and SMEs?
According to data from the federal states, Germany recorded 1,912 greenfield investment, expansion or relocation projects in 2015 (that’s a 60% increase on 2014). Additionally, there were 413 mergers & acquisitions. The most important region for greenfield and expansion investment in Germany is the EU-28 zone, while China and the USA remain the most important individual investor countries. Foreign investors tend to prefer investing in corporate and financial services, with the ICT and communications sector a close second. Third place is consumer goods (incl. Food & Bev.).
E-commerce is not a separate sector as it plays a role across other sectors, for example both ICT and consumer goods. Therefore there is no reliable data available on how many e-commerce companies have settled in Germany. I have recently worked mostly with companies coming from Europe, Turkey, China and Japan. Indian and American companies have also sought my support in recent years.
During the E-commerce Berlin Expo on 2nd February 2017 you will give a talk titled “The German E-Commerce Market: How the Consumer challenges the entire industry”. Can you reveal some more details? Why the focus on the consumers? And how do German shoppers differ from other European consumers?
After presenting background data on the overall German e-commerce market, the main focus will be on typical German consumers: who they are, what they are, their different habits. Every retail company which has conducted business here before will agree that the German consumer is different than consumers from other countries. Without giving away too much (as I’d like you all to come to the presentation!), the German consumer is more demanding than average when it comes to aspects such as website loading times, payment methods, delivery/return options and costs involved. German consumers are perceived to be ‘return champions’ by companies from abroad. I will discuss this in some depth in my talk as it is important to know the consumer specifics before doing business here.
What resources would you recommend to a non-German speaking person who would like to learn more about the German e-commerce market environment? Where can he or she check trends and look for niches?
Trade shows and conferences, such as E-Commerce Berlin Expo, are great ways to gather information and talk to market players in order to receive inside information. Beyond that, I would recommend getting in contact with domestic e-commerce associations, as they generate crucial market data as well as organize regular events for their members to interact and exchange ideas. There are several excellent newsletters with up-to-date information (although mostly in the German language only). When it comes to entering the German market by setting up a subsidiary here, such as a sales office, call center or warehouse, we at Germany Trade & Invest are the right agency to contact. As we are funded by the German government, our support is objective, confidential and free of charge.
Based on your expertise, which segments of the German e-commerce market are easy to conquer? By this I mean: are there any specific products or services from abroad that are more likely to sell well to the German shoppers?
This is a very difficult question. As you know, the German market is the biggest consumer market in Europe with the highest total purchasing power. This means that it is a very attractive market for companies from all over the world. Together with all the innovative companies that we already have here in Germany, it is also a very competitive market. As a result, I would not say that any market segment is easy to conquer. Success for any company in Germany – local or foreign – depends upon a shrewd strategic approach which finds a niche in the busy German market, either in terms of product or service or both. We have also noticed recently that companies which retain their own identity tend to be more successful, for example a Swedish company which retains its Swedish identity and culture and only adapts as much as absolutely necessary in order to serve the German market, will have more success than a Swedish company which sacrifices its identity and culture in order to operate in Germany. The idea/product/service needs to be authentic and if it is, the company will find its niche more easily.
What are your e-commerce market forecasts for 2017?
I believe that this year will be dominated by analysis of the customer journey with the help of big data, culminating in increased offering of personalized product choices with flexible delivery options and dynamic and individual pricing to consumers. Safety will also play a major role this year, especially in further developments of mobile payment options.