For North American businesses looking to expand into international territories, the European market of today is a lucrative prospect. Whether your business has outgrown the domestic market or you simply wish to increase revenues, trading in Europe can pay off dividends.
Why is today’s European market so important for businesses thinking about going global? For starters, it’s an incredibly diverse market, with many different customer segments. Furthermore, the average European boasts considerable purchasing power. In 2022, this stood at €16,344 per capita.
Trading in Europe is far from straightforward. However, the European market offers many incentives for international businesses and foreign inventors. Beyond customer acquisition, organizations also benefit from accessing a high-skilled labor pool. This talent network will not only support your expansion efforts as you move into Europe, but it can also aid your expansion and development efforts elsewhere in the world.
Thinking about expanding into Europe? Read on for 10 things every business needs to consider before making a move on today’s European market.
1. Identify the opportunity
Before trading in Europe, you’ll need to define your market and your overall goals. Are you looking to expand into new territories because you’ve exhausted a domestic customer base? Have you recognized an appetite for products in Europe after launching an e-commerce presence on Amazon?
Any brand with a robust online presence will find it easier to penetrate today’s European markets. With a strong brand presence, you’ll establish trust, helping take the guesswork out of a customer’s buying decision.
2. Check the free movement of goods in the EU and EEA
For many businesses, the free movement of goods within the EU single market is a huge draw. With more than 500 million people living within this vast trade area, there’s a huge number of prospective customers to engage with.
The European Economic Area (EEA) Agreement adds a further three territories to the 27 EU member states. In theory, the free movement of goods results in fewer restrictions and no customs duties. However, don’t expect every country in Europe to operate under the same trade agreement or adhere to the same data protection laws. The withdrawal of the UK from the EU is just one example of where things get more complicated when trading in Europe.
3. Focus on countries that are a good fit for your business
One country in Europe may better suit a business for expansion than others based on a variety of factors, including the business’s industry, target audience, and objectives. For example, a technology company may find countries like Sweden or Finland more attractive due to their strong technology sectors and innovative cultures. Similarly, a fashion company may find countries like Italy or France more appealing due to their long-standing reputation in the industry.
Additionally, the legal and regulatory environment of a particular country can be a critical factor. Some countries may have more business-friendly regulations, while others may have strict labor laws or high tax rates that can impact a company’s bottom line. Cultural compatibility is also important, as some countries may be more open to new products or services, while others may be more traditional and resistant to change. Ultimately, businesses need to carefully consider their specific needs and objectives when choosing a country for expansion to ensure they find the best fit for their operations.
4. Why working with local partners makes sense
Setting up shop in Europe isn’t as complicated as some would have you believe. However, you can streamline your expansion efforts by using a local partner.
Experienced business advisers based in countries you’re looking to operate in can provide invaluable insights into things like regulatory issues and specific pitfalls of the market you’ll need to be wary of. What’s more, it removes the hassle involved with language barriers, country-specific employment law, recruitment of staff, onboarding, and more.
5. Embrace e-commerce platforms
Making use of established e-commerce platforms like Amazon will make international expansion efforts and trading in Europe easier. Customers are far more likely to engage with online marketplaces and platforms they’re familiar with. They also offer a complete solution for companies. Small to medium-sized businesses can benefit from a combined distribution, logistics, and fulfillment provider.
6. Tap into a rich pool of top-tier talent
There’s more to expansion than bolstering a customer base. One of the key things any business needs to think about when moving into today’s European market is talent acquisition. Europe offers a particularly rich pool of prospective employees, with a huge variety of skills represented.
If you can’t find suitable talent locally, you’re bound to find it in Europe. Furthermore, remote and hybrid working models mean that new hires can support business development strategies further afield.
7. Identify ways to reduce costs
By moving part of an operation to Europe, businesses can enjoy significant cost savings. For most companies, reduced shipping costs and expedited fulfillment are obvious perks. However, there’s also the potential to save on manufacturing and overall logistics expenditure.
Admittedly, a move to trading in Europe requires some startup investment. However, if your product or services prove popular and there’s an eager market in place, recouping these costs is easy.
8. Is expansion financially viable?
Economics should be at the heart of any expansion plans. Is your business robust enough to cope with the challenges of expansion? How well are the countries you’re looking to expand into weathering financially? Ultimately, you need to think beyond meeting the bottom line. Successful expansion hinges on growth revenue, not just covering operational costs.
9. Develop a multi-channel brand expansion strategy
Investigate which social media channels are most popular in the countries you want to expand into. These platforms will be key sales and marketing tools. Don’t assume the same marketing tactics can be used everywhere in the world with equal success. In some countries, social media leads the way when it comes to generating sales. Elsewhere, direct selling may have a better hit rate. For best results, you’ll need to adopt a multi-channel approach.
10. Appropriate localization for the European market
Never underestimate the importance of localization. Don’t assume you can simply feed brand content into a machine translation engine and use results to market your business abroad. Even the best machine translation engines can’t represent the nuances of language, rendering tailored branding and marketing messages obsolete. Along with marketing messaging, products themselves may require localization.
To make a success of your expansion efforts, you’ll need an experienced localization partner. At BLEND, we offer a wide range of translation, voice-over, and localization solutions for multimarket expansions. With thousands of expert linguists working in more than 120 languages, we can help you target new markets if you’re thinking about marketing to Europe. Want to learn more? Get in touch today.