Germany has always been a nation of online shoppers, but Covid-19 has seen eCommerce become even more deeply rooted in society – with 65 million people, or 80% of the German population, now purchasing online on a regular basis.
And as the country has the largest economy and consumer market in the Eurozone, Cathy O’Shea, Market Executive for Trade Development, Germany, at Enterprise Ireland says it couldn’t be more important to Irish companies.
Popularity of online shopping to continue
“Huge German digital retailers like Zalando will be familiar to fashion-forward Irish consumers, or those who work in their Dublin offices, as the multi-national mega-retailer took in profits of nearly €8 billion in 2020 alone,” she says. “But this is only the tip of the iceberg in the German eCommerce boom, as store closures due to the Covid-19 pandemic didn’t just create a new wave of online shoppers, it also activated a new wave of online shops. So while stationary retailers were forced to close their doors amid varying levels of lockdown, this has made the eTail environment more competitive than ever.”
This, she says, is reflected across the whole Eurozone, which saw record-breaking eCommerce sales of €717 billion last year – and highlights the Eurozone opportunities on our doorstep and the benefits of accessing the biggest free trading area globally with little friction.
Irish businesses successfully trading in Germany
The market expert says virtual selling and digital networking are not going anywhere fast. So if you’re missing a virtual sales capability, you have a skills gap. But there are a number of Irish companies with very successful business relationships in Germany.
“Increased competition means that eCommerce retailers need to pay critical attention to every customer touchpoint and focus on excellence behind the scenes to stand out from the crowd,” she says. “So there is a clear demand for innovative solutions which help connect online retailers to their customers.
“Over the last year, we’ve really seen eCommerce and Retail Tech innovations out of Ireland grow their business in the DACH region, one example being Luzern – a leading eCommerce platform and related services provider, specialised in delivering innovative strategies for Amazon Marketplaces.
“Nowadays, up to 70% of product searches begin on Amazon, making it the largest search engine for eCommerce. Essentially, if you are a growing brand, Amazon is a must for getting discovered by new customers and this is where Luzern comes in – they help companies to reimagine their Amazon strategy and find new ways to protect their brand, while also increasing their online revenue.”
Opportunities for innovative Irish firms
According to O’Shea, Luzern isn’t the only Irish company making its presence felt in the German market.
“ChannelSight is another great example and is one of the fastest growing Irish start-ups in 2021,” she says. “Their software is used by hundreds of brands across 65 countries, and they have experienced particularly rapid growth over the last year as the explosion of online retail has prompted brands to invest in eCommerce technology.
“In the DACH region, it works with multinational brands such as BSH, one of the global sector leaders in home appliances, and Tado, an emerging technology company and European leader in intelligent home climate management. So it is great to see German retailers embracing Irish solutions and seeing significant growth as a result – and these are just two companies of many. For any other businesses wishing to avail of eCommerce opportunities in the Eurozone region, Enterprise Ireland can support them in accessing the market.
“And in Germany, Austria, and Switzerland, there are distinct pros for Irish companies looking to export as Irish SMEs are tech savvy, and digitisation is on top of the political agenda in German-speaking markets. As well as that, Irish companies react fast, deliver on time and are quick to pivot when hardship strikes – this reactivity and reliability goes a long way when doing business in the DACH region.”
Research is vital
But despite the fact that there is an Irish advantage in the region, the market executive says that buyers have high standards and Irish companies need to be able to show their commitment to the market and come prepared if they are to win business.
“The value proposition needs to be clear, well-defined, and specific in order to make an impression,” she advises. “And as a Market Executive in Enterprise Ireland’s Düsseldorf office, my role involves supporting Irish client companies to access market opportunities in the DACH region – so market research, buyer introductions and in-market connections are all areas that we can assist with across the whole Eurozone – even in the virtual environment, securing some face time with the right decision maker can go a long way.
“This is why we built a virtual 1:1 networking into our digital Consumer-Centric eCommerce event which took place on June 10th. The event was all about the German perspective on the eCommerce market right now, looking at the trends, pain points and opportunities the future will bring in this area. It’s an exciting time to be selling online and it’s going to ignite some big conversations and we wanted to accommodate that.”