19 April 2018
Jan Bailey / NZTE Trade Commissioner / Hamburg
In February, a group of major German corporations was paying close attention to a technology company based in, of all places, Christchurch.
Orbica, a location data intelligence consultancy, was among 220 start-ups from around the world, pitching ideas at the Beyond Conventions event in Essen, Germany. Orbica’s idea was simple: when it comes to tracking construction progress, use new technology to turn a traditional, labor-intensive model into an automated process. And it resonated – Orbica won both the Thyssenkrupp Drone Analytics Challenge and the People’s Choice Award. Now, Orbica is preparing to leverage that victory.
Orbica is one of a growing number of New Zealand businesses to recognise the potential business opportunities available in Germany. As Europe’s political and economic powerhouse, Germany’s appeal as a business partner is clear. It’s an enormous, stable economy, and one of the world’s largest exporters (almost €1.3trillion in 2017) and importers (more than €1trillion). Germany is New Zealand’s sixth-largest trading partner, and our bilateral trade is valued at NZ$3.26billion (year ending June 2016). Our top exports to Germany are in the food and beverage sector, but there is a broad, diverse range of companies exporting goods and services there, in fields ranging from IT to healthcare, and from renewable energy to the marine industry. Each year, more and more companies around the world discover Germany as a secure and rewarding place to do business – and New Zealanders are taking note.
Take Gentrack, an Auckland-based software developer, which in March signed a deal with Germany's largest renewable energy producer, Eon. Now, all of Eon’s UK and Romanian energy supply businesses will use Gentrack’s velocity utility billing and customer management software. On the strength of their innovative product, this New Zealand business has partnered with an enormous German multinational corporation, and Gentrack is capitalising on Eon’s international reach.
Then there’s Shot Darts, a Katikati-based darts manufacturer that identified Germany as a market where it could grow its business. Representatives from Shot Darts visited numerous times, attending industry conventions and ultimately attracting the attention of the young German darts superstar Max Hopp (also known as “The Maximiser”). With Hopp as an ambassador, Shot Darts gained credibility, and the company has entered deals with new stockiest and retailers there.
Shot Darts’ approach hit the bullseye, and other New Zealand companies considering Germany stand to gain from studying its strategy. The company took time to consider how the market worked, who the consumers were, and their purchasing behaviours. Germany has a large population of among the wealthiest consumers in the world, and getting to know these potential clients is an important first step towards doing business there.
As these case studies suggest, the German market is rife with opportunities. But success doesn’t come without its challenges. For New Zealand companies considering business in Germany, it requires a lot of time, effort, and research to ensure your strategy will work.
Competition is tough. Germany has 3.5 million companies, 99.6 percent of which are SMEs. Approximately 70,000 of those are foreign-owned businesses. A product or a service that might seem unique in New Zealand may suddenly look less distinctive in its new market. Businesses that have succeeded in Germany tend to start small, focusing on one region or one client. They learn from that experience, adapt, and grow. These companies identify a niche, a point of difference, and create a message that resonates with German consumers. They put themselves in the shoes of the German buyer and build a sharp understanding of who their target market is and what motivates them. Germany is some 18,000km from New Zealand, and this fact-finding exercise is a daunting prospect. There are many online resources to help your research, including those provided by New Zealand Trade and Enterprise and Germany Trade & Invest, but nothing compares to visiting the country, talking with people, and gathering as much first-hand understanding as you can, to ensure your business and its message cuts through.
Luckily, New Zealanders are at an advantage. We have a great reputation among Germans, who love to visit our country and are impressed by our honesty, openness, hospitality and our positive disposition. We have similar values, which makes it easier to have these conversations. Cultural differences shouldn’t be underestimated, though. Germans are exacting, and treat business very formally. New Zealanders are known for their “She’ll be right” attitude, but in Germany, it has to be “She’ll be right – on this date, at this time.”
Prime Minister Jacinda Ardern is visiting Berlin to meet with Chancellor Angela Merkel where she will also be giving an address about the New Zealand Government’s vision for growth. An important element of the visit will be to reinforce Germany’s continuing support for the early launch of FTA negotiations with the EU. Various German business groups will be at the address. Success stories are waiting to be written.