A Guide to Doing Business in Germany
Germany is a member of the European Union (EU) and boasts Europe’s largest economy and second largest population. Right now, they have the fourth largest economy in the world. Germany’s main export partners are France, the United Kingdom and the United States. The German labor force is highly skilled. They are a leading exporter of vehicles, machinery, chemicals, and household equipment. All of these factors make Germany an attractive market for companies looking for a new audience for goods and services. But whether you’re looking to partner with an existing business in Germany or simply looking to reach German customers using a website here are few important considerations for understanding and targeting a German audience.
Languages German is the official language of Germany, spoken by 95 percent of the country. Most Germans learn English as a foreign language in schools. Due to Germany’s membership in the EU, German is one of the 21 official languages. For most businesses looking to attract German -based customers the first language for translating content should be German. German is a Germanic language, like English. Therefore, a lot of English and German words are pronounced similarly. German language is known for their long compound words. Rather than invent a new word for a concept, the language takes a description of the concept and turns it into one word. Keep this in mind when creating brochures and marketing collateral for a German-based audience. You will need to leave a lot of white space to allow for text expansion during translation. This may also be a factor for software localization, mobile app localization, or website localization. A tightly-designed user interface (UI) may present problems down the road. Design a flexible UI that can expand or contract. Currency Germany is a member of the European Union. Therefore, the currency of Germany has been the Euro since 2002. In 2017, exchange rate from the United States Dollar to the Euro has averaged about 1 EUR – 1.125 USD. The Euro is the second most traded currency in the exchange market after the US Dollar. If you are looking to fully localize your website’s global eCommerce experience, then you will need to convert currency to Euros. Currency will need to be converted properly. German language uses commas in place of decimal points. German consumers prefer to pay in cash, according to research from eMarketer. Therefore, many consumers still use open invoice transactions. However, digital payment sites such as PayPal have gained traction along with traditional methods such as credit cards. Where are Consumers Spending their Money? German consumers are swayed by price and quality, according to research from Santander. Price is important for everyday goods. Germans shop around frequently, comparing prices and looking for the best deals. They place safety and quality very high for consumer durables and professional capital goods. Evaluate your products and where they fall in line with the German consumer profile. Overall, Germany is a highly connected population, with over 80 percent of their total population online. They rank ninth in the world in terms of Internet users. Therefore, a website that embraces German language and culture (color choices, image choices, etc.) will appeal to German consumers. Such initiatives will allow you to effectively reach 65 million Internet users. German consumers tend to purchase via catalog. Therefore, translating your catalog into German could lead to more purchases. When compared to the rest of larger markets in Europe, German consumers are historically less trusting of eCommerce and digital purchases. This trend seems to be shifting. In 2017, according to eMarketer, eCommerce will rise over $7 billion in Germany. This is a small fraction of total retail sales, meaning there is a lot of growth potential. When marketing to a German audience, avoid creating campaigns that can over exaggerate the benefits or abilities of a product or service. Hyperbole will not help build trust for your brand in Germany. In addition, pay close attention to your use of comparative advertising. Such a practice cannot be misleading or falsified. For example, “our product is the best at ________,” or “our product is better than ________’s product.” For guidance, take a look at the European Union’s Directive on Misleading and Comparative Advertising. Business Culture German business culture is characterized by a few major attributes – direct, ordered, precise, structured, and thorough. Remember these qualities as you look to do business in Germany. Hierarchy is important in Germany. Everyone has a role in a hierarchy and you should address people using their titles unless you are told otherwise. Dress is conservative for both men and women. Personal life is not brought up in business. Besides a firm handshake at the beginning and end of every meeting, Germans value personal space. When scheduling a meeting plan ahead, and make sure you are on time. Being late to a meeting makes a terrible first impression. At the meeting itself, know that Germans are direct. Present facts if you are the presenter, and be prepared for facts and charts if you are the being presented to. If you’re looking to do more business in Germany, the first step is to present your content in their language with respect to their values and needs. For more help in connecting with the German market, get in touch with LinguaLinx.