Germany Your Next Market
In recent years, Germany has become a very attractive market for numerous foreign mailers representing many industries (mail order, publishing, financial services, charities, etc.) and this is reflected by the high number of new entrants, particularly from the United States. These include Lands' End, Peruvian Connection, ELG European Lottery Guild, HCI Direct and Vartec Telecom.
So, What Makes Germany so Attractive?
Market size: With more than 38 million households and 82 million inhabitants, Germany is the largest country within Europe and has the largest market of potential buyers.
Standard of living: Without a doubt, Germans enjoy one of the highest standards of living in Europe. The average GDP per capita in 2001 was $26,200.
Direct marketing activity: Germany has a well-developed direct marketing industry. In 2001, total direct marketing expenditures reached EUR 21.2 billion (US$22.7 billion) and the largest share—EUR 7.1 billion (US$7.6 billion)—was spent on personalized direct mail.
Mailings per household: German households receive an average of two pieces of direct mail per week—a significant volume outside the United States. This number increases to three pieces for active mail-order households, and heavy users of direct mail may receive as many as five mailings or catalogs per week.
Organizations that are serious about developing Germany as a "stand-alone" market, will have the greatest chance of success if they tailor all their activities to suit the specific market situation. When planning an expansion to Germany, the following areas are worth careful consideration.
Although credit card membership has boomed in the last five years, this method of payment has yet to establish itself in many situations, including mail order. The preferred method of paying for goods and services (95 percent of all transactions) remains bank transfer (Überweisung), usually within 14 days of delivery. This method of accepting payment may be considered risky by U.S. mailers, but it is a commonly used payment option in Germany and does not generate high levels of bad debt. Credit card payment is increasingly offered, but currently only serves as an additional payment alternative.