As the world’s largest economy with 500 million consumers, the European Union offers exciting opportunities for New Zealand exporters.
Not only does the EU provides access to consumers with high disposable income who are prepared to pay premium prices, but its size and level of sophistication makes it possible to sell successfully to niche groups.
China looks at Europe to identify emerging trends. So having a presence in Europe can potentially attract the attention of Chinese buyers, as well as European consumers.
For those looking at setting up a physical presence offshore, the EU offers a skilled workforce, a broad network of New Zealand companies already doing business, and a generally high quality of life making it easier to attract talent.
And the EU’s transparent systems and single regulatory framework makes it easier to do business across multiple countries.
Marine, food and beverage, and technology including agricultural technology are some areas offering growth opportunities for New Zealand companies. New Zealand excels in all of these sectors.
At the high end of the market is the superyacht industry. The Mediterranean is a key hub for superyachts and a playground for high net worth individuals. New Zealand offers complete new builds and refits, and components for the European marine value chain such as navigation systems and sails.
Aside from possibly refitting their boats with New Zealand technology, these individuals may also be interested in other high-value New Zealand products – wine, planes and helicopters, and investment into New Zealand business.
But it’s not all plain sailing. Competition in the European market is aggressive in most sectors. Growth rates are slow, creating entry costs and barriers for new players. Each EU market requires a different strategy and focus. And the implications of Brexit are still to be understood.
Seven things to know about entering the European market:
1. Target
• Don’t select a country simply because it can be seen as a hub for Europe; instead focus on the market that provides the best access to your customers.
2. Consider regions
• Ideally, you should be based as close to your customers as you can. It often means selecting large cities as a base.
• However, companies planning to set up production and create local jobs should also consider if any regional incentives or public-private-partnership schemes are available.
3. Know regulations
• Regulatory requirements, especially in the pharma and food & beverage sector, privacy are far more complex than in NZ.
• Full traceability of the products is compulsory in the EU.
4. Protect IP
• IP needs to be registered at a European level, including regular renewal, and this can be quite expensive.
• IP legislation and enforcement still differs on a country by country basis.
5. Obtain work permits
• Obtaining a working permit for a New Zealander with no EU passport is quite complicated all around Europe, apart from the UK.
6. Plan ahead
• Estimate costs and timeframes required to set up and operate.
• Closing down a business is more complex and takes more time than in New Zealand, especially if it involves laying off people.
Watch New Zealand companies at the 2017 Superyacht Cup in Palma here: https://www.youtube.com/watch?v=mvnwgjWwkuo
To help New Zealand businesses weigh up the pros and cons of the EU, NZTE has published Entering the European Market – to help you understand if the EU is the right market, how to pick the right countries within the EU, and what to be aware of. View and download the guide here.
