International Online Marketing Outlook: Germany
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International Online Marketing Outlook: Germany

By: Brian Thomas

Market Opportunity
The Euro, Germany’s unit of currency, remains very strong against the US dollar, creating increased demand for US goods. Germany is one of the most lucrative and appealing markets in Europe, with the largest population in the European Union, at 82.4 million, and the largest economy in the entire region. Additionally, a recent press release from prnewswire.co.uk finds that Germany is Europe’s largest consumer market, whose national purchasing power accounts for about 20% of all of Europe. The average disposable income in Germany is about $29,000, only slightly lower than the $30,000 mean disposable income in the US. And this figure is expected to increase in the coming years. According to a survey by the GFK Group, German consumers will have an average of $1,000 more income to spend in 2008 than the previous year as incomes tend upwards on average.
Despite the impressive promise of the German market to a perspective exporter, there remain challenges. Similar to many countries in continental Europe, unemployment remains high in Germany (consistently above 9%). Also, the size of the middle class in Germany has begun to shrink slightly, with the Macroeconomic Policy Institute in Germany (IMK) declaring its size to have decreased by about 5 million since 1992. Like other EU countries, the current German administration to addressing these issues in an effort to continue increasing the overall growth of the economy.

Best Industry Segments
While the German economy thrives on its ability to export abroad, there is much opportunity to enter several profitable import markets. Germany’s primary worldwide imports include petroleum products, manufactured goods, electrical products, and apparel. A US firm seeking to break into the German market may find it promising that the US is Germany’s second largest trading partner, with exports expected at about $71 billion in 2008. Electrical equipment, aircraft, telecommunications products, data processing, and motor vehicles and parts rank among the most prominent US exports to Germany.

Regulation and Tariff Climate
According to The US Department of Commerce Germany’s regulations and bureaucratic procedures may prove to be a challenge for some companies wishing to enter the market, and thus require close attention from US exporters. Regulatory measures such as safety standards and CE marks are required for many manufactured products, and firms should discover which standards apply and how to obtain timely testing and certification to meet them.
The European Union is already one of the most open to trade in the world, with an average level of customs duty protection at around 4% on industrial goods. And things seem to be improving further in this arena, as the US and the EU, under the leadership of German Chancellor Merkel, have been working on a proposal for a Transatlantic Economic Council designed to further knock down regulatory barriers and tariffs between the US and the European Union.

Online Marketing Opportunities
Beyond the general promise of the German market, the prospects for marketing products online in Germany through emarketing and ecommerce are even more impressive. According to internetworldstats.com, Germany already has 53.2 million internet users (13 million more than the UK, the next EU state) at a penetration rate of 65%, and accounts for 20% of total internet use in all of Europe. Despite a slightly smaller internet use growth rate, at 122% since 2000, Germany should continue to have the largest European internet community for years to come. These figures become even more important for potential business to business (B2B) marketers, as close to 99% of all German businesses are now online.
Ecommerce has also taken off in Germany, and research institute Horizont expects that ecommerce levels will triple in the State in the next two years. Germany is home to the most online consumers in Europe, and by 2011 it is predicted that some 43 million Germans will buy online, about half the entire population. However, despite the large number of potential internet buyers, Germany still lags behind the UK with respect to total retail value of online purchases. German buyers spend less online than net shoppers in the rest of Europe, due to their price-sensitive nature and historical disillusion with credit cards and borrowing in general.

Search Engine Profile
The search engine market share in Germany mirrors that of much of the world, with the regional version of Google, google.de, the leading SE cornering just under 90% of the entire search market. Yahoo.de follows with 3.4% of the market. Smaller local search engines such as Abacho, Fixx, and Fireball, among others, also get play in the German market. Even though English is widely spoke in Germany, 99% of Germans still conduct initial searches in their native language, so having content in German is key to reaching German consumers.

Summary
With the largest online population in Europe, the highest purchasing power in the European Union, improving regulatory and tariff trends, and favorable exchange rates, despite its challenges, Germany provides an excellent opportunity for online marketing. For these reasons, GLOBALeMARKETER.com gives Germany a Tier 1 rating for global online marketing.

Article Source: http://articlenexus.com

Brian Thomas is the principal and founder of Global eMarketer (GeM). GeM is an international business development and marketing consulting firm that helps businesses expand globally through global online campaign management. For more information contact information[at]globalemarketer[dot]com, or visit the website at www.globalemarketer.com.

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