17.10.2018

German market – strike while the iron is hot

Tiina Kivikas, Export Adviser of Enterprise Estonia in Germany

During a recent discussion about the Germans’ interest in Estonia, I commented that when it comes to exporting to Germany one should strike while the iron is hot. In the long-term perspective, the German market is one of the most reliable export markets for Estonian enterprises, as the value of Euro is getting stronger, the German economy is stable and built on robust foundations. The German Ministry of Economy forecasts a 1.7% increase in GDP and unemployment in Germany is lower than it has been in the past 25 years. Estonian export to Germany has increased continuously and sustainably during the past five years.

Estonian export volumes to Germany (trade, millions of euros):

   
2013 563 410 870
2014 582 136 325
2015 606 046 215
2016 696 397 556
2017 932 683 714

Source: Statistics Estonia

Export volumes of the first half of 2018 indicate clearly that this year, we will cross the billion euro line when it comes to export volumes targeted at Germany. No significant obstacles can currently be seen on the road to that goal. Estonian entrepreneurs are very interested in the German market and Germans in turn are significantly more aware of the “closeness” of Estonia, both in the geographic sense and in terms of business culture. In the framework of my daily work in Bavaria, during the past five year, I have noticed a rapidly increasing interest in Estonia. For example, the number of German delegations visiting the e-Estonia Showroom has grown multi-fold – previously we hosted visitors from Germany about once a month, whereas these days, it is not rare that we introduce e-Estonia to Germans 2–3 times a day or host German business delegations several times a week. Baden-Württemberg and Nordrhein-Westfalen tend to be especially interested in Estonia; a delegation from the cities of Nordrhein-Westfalen visited Tallinn in July and two of the cities were eager to test out electronic solutions designed for citizens of Estonia in order to benefit the inhabitants of their constituent state right away.

Our digital image has made a mark

The core work that I do consists of advising Estonian enterprises who wish to enter the German market, as well as exporters who already cooperate with German partners, in order to clarify market-specific topics, find new partners and clients. However, about a tenth of my time is spent on seeking out answers to questions of German entrepreneurs – they are mostly interested in blockchain solutions, the Estonian education system and, for example, the system of digital medical history meant for use by patients. I can confirm that the digital image of Estonia has been well-received in Germany and that it functions as a great tool for networking with German enterprises. This also means that the German interest in Estonia is focused on start-up companies, as proven by the increasingly frequent invites sent to Estonian entrepreneurs to speak at conferences and apply for awards. As an export adviser of Enterprise Estonia, I am always happy to aid with establishing contacts and to help in any way to the extent of my skills and knowledge.

Trade fairs and networking events

Face-to-face communication plays a vital role in communicating with Germans. Enterprise Estonia contributes to establishing and developing contacts by way of various trade fairs and trade missions. I have been asked whether trade fairs are losing their importance and whether the principles of conducting business in Germany are changing. As I explained a few years ago, I am still convinced that Germans find attending trade fairs and conferences very important; there are no signs to expect that this will change with the next few generations. As an adviser, I see the great value in the fact that Enterprise Estonia is supporting entrepreneurs by organising six joint stands at the largest German trade fairs this year. In the fall, this includes Electronica (a trade fair of electronic systems and solutions) and Medica (an international trade fair of the medical sector). Next year, Enterprise Estonia will support Estonian entrepreneurs’ attendance at Bau 2019 in Munich, the boat trade fair BOOT 2019 in Düsseldorf, the international interior trade fair IMM Cologne in Cologne and the ecological food trade fair BioFach in Nuremberg.
Enterprise Estonia’s new measure, the individual foreign trade fair grant helps even more enterprises participate networking events that are important to their field on their own. There are about 150 international trade fairs organised in Germany and Estonians are welcome to attend those without a joint stand as well. Coming in the fall, is the international IT & Security trade fair held in Nuremberg, which Estonian enterprises have yet to discover, and which, in my opinion, would be especially beneficial for small and medium-sized IT companies from Estonia. In addition to a multitude of German companies, the trade fair will also be attended by a considerable number of enterprises from the United Kingdom, Netherlands, United States, etc. The Nuremberg IT fair may not be as well-known as the CeBIT held in Hannover; however, as a more compact trade fair, the Nuremberg IT fair likely has better chances for establishing first contacts and organising lengthier face-to-face meetings.
My experience as an export adviser for Enterprise Estonia has confirmed that in such a large country, every company interested in the German market can find a trade fair, conference, forum or networking event that is just right for their needs. Direct communication with German entrepreneurs is the key to successful export and it is definitely wise to use the current interest that Germans have in Estonia. Germany is sufficiently close to us, so that this economic motor of Europe can be visited a couple of times a year, be it by attending field-specific events or visiting new and potential clients. Therefore, this is just the time to strike iron.

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Kaarel Väer, Estonian Woodhouse Association, Chairman of the Board

In terms of finding success in Germany, direct communication – in the form of trade fair participation and visiting local enterprises – played a huge role. Under the auspices of the Estonian Woodhouse Association, we have organised joint visits to various conferences and trade fairs, and if possible, scheduled business meetings and visits to local producers to supplement participation at fairs. I find that this is what brings the best results – combining those activities helps create a comprehensive understanding of the market situation and to minimize risks that tend to arise during export.

Roomer Tarajev, Advanced Sports Installations Europe AS, Head of Public Relations

Knowledge and understanding of the local business culture is very important when entering the German market. It is definitely necessary to establish reliable contacts with Germans; organise in-person meetings, invite them to Estonia and win their trust by way of joint projects. Even if everything goes smoothly, it can take months from contact to the first transaction. Estonians may find Germany a bit too bureaucratic at first, nevertheless, it is vital to understand and comply with the minute details that are prerequisites for starting economic activity in Germany. Be it acquiring membership in trade unions, certificates or other requirements of the state, which might seem odd to us. It is important to take up on all the chances for attending joint events and map joint interest with other Estonian enterprises, so that we can take part in various events together. The export advisers of Enterprise Estonia are very competent at what they do and know the ins and outs of their local market. We trusted the recommendations and background info provided by the export adviser; without Tiina’s help we would have wasted a lot of useful time.

Urmo Sisask, Hyrles OÜ, Executive Director

Going to Germany is very important in order to see and hear for yourself of how the Industrie 4.0 concept is applied in one of the world’s leading industrial countries. The large industries of Germany have come a long way in developing the industrial revolution of the next generation; however, even small and medium-sized companies with more reserved financial means have a lot to learn from the experiences of German enterprises. At least we have always returned from Germany with a lot of new ideas on how to improve the work at our company and manage things in a more efficient manner. In addition to interesting speeches heard at events, we have also established contacts with local entrepreneurs – German SME-s are not all that different from similar companies in Estonia, the problems and challenges we face tend to be similar as well. Sharing information with your colleagues is as important as learning from the experiences of others, this is why I have always invited entrepreneurs we have met during out travels to come and visit our enterprise and Estonia in general. By visiting us on site, foreign partners can verify that we could be excellent advisors and cooperation partners to them. Continuous learning and development requires engagement and active interest towards the wide world, which in turn helps create a wider contact network and prerequisites for entering a new market.

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