Reaching the consumers

Marketing opportunities

Consumer behavior

Every month, the GFK market research Institute publishes information about consumption in Germany.

Consumer profile and purchasing power

Germany is ranked 10th in Europe, with an average annual income of 17 087 EUR per inhabitant. German households are saving more and more: 151 billion euros in 2003, an increase of 16.4% in 10 years.

The German consumer shows a strong propensity to compare prices and patronize "discount" stores. He is very aware of special offers, and readily goes to different shops in order to get better prices. He has very strict criteria when making a choice, according to the type of goods he wants to buy. For consumer durables, the criteria are in order safety and quality, prestige, comfort and convenience and price. For everyday goods, the only determining factor is price. For professional capital goods, the obsession with safety leads to buying criteria based on quality, reliability, the supplier's follow up and after sales service. Price is not one of the dominant criteria for this type of product. On the other hand, for minor equipment or industrial supplies, the price factor predominates.

Consumers associations

Federation of German Consumer Organizations (VZBV)
Product test foundation (TEST)
Consumer Initiative

Main advertising agencies

Carat media agency
OMD media agency
Mind Share media agency
Bader Media agency
Initiative media agency
Gesamtverband Kommunikationsagenturen GWA e.V

Distributing a product

Evolution of the sector

With more than 82 million inhabitants, the German market is the largest in Europe; it is very competitive and segmented, with many sectors and products being saturated; the quality and services offered are essential. The main economic areas are North Rhine-Westphalia, Baden Wurtenberg, Bavaria, Hamburg, Berlin and Hanover, plus Leipzig for former East Germany.

Market shares

Germany's distribution structure is characterized by:
- the large number of small independent shops;
- the sector's low level of concentration, compared with the main European markets (France, United Kingdom, Belgium);
- the predominance of distribution in city centers and urban areas;
- very few "hypermarket" style stores;
- the domination of "hard discount" stores and the importance of distance selling (mail order, e-commerce, teleshopping).

German distribution is divided between the following distribution channels: Traditional retail trade (24.8%); Specialized hypermarkets (22%); Nonfood chain stores (13%); DIY hypermarkets (11.7%); Discounters (11%); Supermarkets (7.9%); Distance selling (5.8%); Department stores (3.8%). Sources : Ifo-Institut & destatis

The three leading German distribution groups are Metro, Rewe and Edeka/Ava. « Hard discount » is the leading type of food distribution, registering growth of about 10% and generating 40% of total food sales. The rise of discounters such as Lidl or Aldi has forced distributors to wage a price war: so, insufficient margins may slow down the modernization of sales outlets and the development of new distribution concepts. Relations between distributors and their suppliers, said to be very difficult, have become even more strained. A trend towards concentration has appeared and groups such as Karstadt-Quelle, Edeka-Tengelmann, and discounters like the American Wal-Mart are now competing hard, bringing down suppliers' margins.

Organizations in the retail sector

German Retail Business Federation (German only)

Market access procedures

International Conventions

Member of World Trade Organisation
Member of OECD
Party to the Kyoto protocol
Party to the Washington convention on International trade in endangered species of wild fauna and flora
Party to the Basel convention on the Control of Transboudary Movements of Hazardous Wastes and their disposal
Party to the Montreal protocol on Substances that deplete the Ozone Layer
Wassenaar arrangement on export controls for conventional arms and dual-use goods and technologies
Party of the International coffee agreement 2001

Main International economic cooperation

Member of the European Union
Member of the European Economic Area which since 1 January 1993 guarantees the free movement of most goods between European countries.
Multilateral agreements and bilateral agreements with many countries.

Non tariff barriers

As it is a member of the European Union, Germany applies the Community regulations which are valid throughout the Union.

If the EU has quite a liberal foreign trade policy, there are a certain number of restrictions, especially at the level of agricultural products, ensuing from the implementation of the CAP (Common Agricultural Policy): applying compensations when importing and exporting agricultural products to favor the development of agriculture within the EU implies a certain number of systems to control and regulate goods entering EU territory.
Moreover, for sanitary reasons, as regards the presence of Genetically Modified Organisms, if they are allowed in Europe, their presence must, for example, be systematically specified on packaging. Importing beef fed on hormones is also prohibited. The BSE crisis (called "mad cow disease") has encouraged the European authorities to reinforce phytosanitary measures to ensure the quality of meat entering and circulating in EU countries. The principle of precaution is now more widely favored: in case of doubt, import is prohibited until the non- noxiousness of the goods is proved.

Some other goods remain prohibited or subject to specific formalities. For example, medicines for human use, waste, plants or live animals.

Customs duties and taxes on imports

Trade, inside the EU, in goods originating from one of the 25 Member States is totally free of Customs Duty. This trade consists of delivery and purchases inside the Community and not of exports and imports.
Duties for countries outside Europe are not very high, especially for industrial products (4.2% on average for the general tariff).

Customs classification

Practically speaking, it is the TARIC code (made up of 10 digits) which enables Customs duty rates to be defined as well as the Community regulations applicable when a product is imported from a country which does not belong to the European Union.To find out the Customs duty on a product based on its country of origin, you should consult the TARIC database.

Import procedures

When goods from within the Community enter Germany, the exporter must obligatorily fill out, at the end of the month, a DEB (declaration of exchange of goods) or an Intrastat Declaration.

Importing samples

For the import, export and re-export of commercial samples the ATA (Temporary Admission) carnet can be used. It must be written on the product that it is a free sample and that it may not be sold.

For further information

German Customs
Bundesministerium der Finanzen

Organizing goods transport

Main useful means

Road transport is the main means used for goods. 268 million tonnes of goods were transported by sea in 2004 in Germany against 2767 million tonnes by road transport.

On motorways, a tax on industrial vehicles with a gross weight over 12 tonnes has been in force since 1995. The tariffs are set per day, week, month or year and consist of a subscription which entitles the driver to a certificate which he must present.

Ports

Port of Hamburg
Port of Bremen
Port of Rostock
Port of Lübeck
Port of Kiel
Port of Wilhelmshaven

Airports

Berlin Airport

Sea transport organizations

Ministry of Transport

Air transport organizations

German Civil Aviation

Road transport organizations

DEGES (German only)

Rail transport organizations

Federal Railway Authority

Identifying a supplier

Type of production

Aerospace, Automotive, Chemical, Contact Center, Electronics, Food and Beverage, Healthcare, Communications Technology, Logistique, Machinery and equipment industry, Nanotechnology, Renewable energies and ressources industry, Tourism and leisure industry.

Business directories

White and Yellow Pages
Yellow Pages
White pages
Europages

Manufacturers associations of the main industries

Chemical Industry Federation
Association for Electrical, Electronic and Information Technologies
The German Aerospace Industries Association
The German Automotive Industry Association
German Association of Research-Based Pharmaceutical Companies
The Federation of German Food and Drink Industries
VDMA Associations

Trade Agencies and their representations abroad

American Chamber of Commerce in Germany
The German Chambers of Industry and Commerce

Enterprises federation

Bundesverband der Deutschen Industrie e.V., BDI - Federation of German Industries