For a Ukrainian company, export is a daily work that requires thorough preparation. Delo.UA has gathered advices from experts and consultants for businesses desirous of entering the EU market.
In the past few years, Ukrainian small and medium-sized businesses have been turning more and more attention to Europe in the matters of export. When the key trade partners were CIS states, working with them was much easier: whatever was made could be sold there.
In the European Union, the situation is different: one has to win over the consumer there, and has to sell the product and of the quality compliant with EU standards. Therefore, Ukrainian companies must do a thorough homework before exporting to EU states. This topic was discussed at the conference for entrepreneurs in Odesa “Business together: how to enter the European market”. Delo.UA has gathered advices for entrepreneurs from experts and consultants in international trade.
Advice 1. Study potential markets
Entrepreneurs seriously thinking about exporting must study market potential, thoroughly and in advance, Vladyslav Faleiev, an expert in international trade and the founder of the consulting company PBDS says.
One has to have the up-to-date information about where a particular product or service enjoys demand.
There are special resources for that purpose, often available free of charge for businesses from developing countries. They include, in particular, the online platforms Trade Map, Market Access Map and TARIC.
“If you know your product’s code, you can use these resources to view the entire dynamics of trade, sales volumes, leading exporting countries, leading importing countries, import quotas and tariffs. After studying this information, you could decide where to export the best,” Mr. Faleiev says.
Advice 2. Know what the consumer wants
“By analyzing market indicators (import statistics for a particular or a similar product in the country in question), you can understand whether there is a niche for it over there,” Tetiana Miskova, Head of Strategic Projects at the Office for Export Promotion notes.
The next step is to find out not only what countries supply similar products on the market where you see a potential, but to study websites of competitor companies.
“This way, you’ll have an idea in what country and with what products you could enter the market, and also, what exactly you’d need to change (product, packaging and so on) in order to win over the consumer,” Mrs. Miskova clarifies.
Advice 3. “Feel” the market
You must be present in the market you’re interested in, Vladyslav Faleiev maintains.
“You have to come over there and feel the market with your own hands and eyes. Understand it, find out about requirements to quality and packaging, pricing procedure and delivery terms, and talk to potential buyers. The best option in the beginning is to work with a local distributor or an office which will represent your company. It’s the way that would help beginner exporters avoid many mistakes,” the expert says.
Mr. Faleiev strongly recommends participating in trade fairs in other countries.
In addition, the Office for Export Promotion regularly organizes trade missions to various countries. “In the EU, we plan to visit Austria, Germany and France this year,” Mrs. Miskova clarifies.
Advice 4. Know requirements to your product in a particular market
Today, requirements to product quality and safety in Ukraine significantly differ from those in Europe. If you want to export your products, you would have to study the standards of other countries to make sure that your product is compliant with them, and receive all required documentary confirmations.
“The Ministry of Economic Development and Trade of Ukraine has the hotline for the Free Trade Area between Ukraine and the EU. Manufacturers of nonfood goods should seek consultations there. In addition, the website of the Ministry of Economic Development and Trade has the section FAQs regarding free trade between Ukraine and the EU, providing answers to the questions most frequently asked by manufacturers. If you sell foods, you should contact the Ministry of Agricultural Policy and Food of Ukraine for more detailed information,” Tetiana Miskova clarifies.
Speaking about other open sources, you can find information regarding international markets, requirements to exported goods and services, and obligatory and nonobligatory certification on ITC Trade Map online platform or on the website of the Netherlands Center for the Promotion of Imports (CBI).
Advice 5. Know whether you have export resources
“Export is, first of all, about investment of resources,” Tetiana Miskova says. And therefore, you should know whether you really want to enter a new market and why.
You have to analyze what resources your company has for export. For Ukrainian businesses often face the predicament that they have to change themselves on the inside.
They have to change the product to fit market standards, change product packaging to suit consumer preferences, modernize production process to meet high safety requirements in another country.
“Export is, first of all, about investment of your company’s resources: human, time, financial, production and other,” Tetiana Miskova says. And therefore, you should analyze whether your company has sufficient resources to enter international markets.
For Ukrainian businesses often face the situation that in order to export to EU markets, they have to change themselves on the inside. Most often, they have to change the product to fit market standards, change product packaging to suit consumer preferences, modernize production process to meet, for example, high safety requirements in another country, or change the company’s business processes.
Advice 6. Put together a team
The minimum program for a company desirous of entering the market of another country is to have a special manager for foreign economic activity who speaks English.
“Banal might it sound, but many companies do not have such people,” Vladyslav Faleiev clarifies.
A quality manager is also a must. It’s a person knowledgeable of international quality standards (ISO 2000, HACCP, Global GAP).
“Today, Europe and the whole world are ready, first of all, for products of the premium segment. But what is regarded as premium segment in Ukraine is not always so elsewhere in the world,” the expert says.
Advice 7. Find partners
For export operations, you will need partners of all sorts.
“Export, especially for small and medium-sized businesses, is also about the ability of companies to unite and look at each other not as competitors but partners”, Tetiana Miskova says. “Companies from other countries often want to buy goods in large quantities, which small businesses simply cannot deliver. So, in order to deliver the required volume, you’ll have to join efforts with similar companies in order to supply a product to a new market, for example, under a common trademark.”
To find a partner in another country, visit the online platform Enterprise Europe Network (EEN).
“The network’s geography is not limited to the European Union only. It features over 50 thousand registered companies from 65 countries,” Alina Strilets, an EEN expert at the Office for Export Promotion says.
Using this platform, you can find a distributor, investor or partner for joint research and development.
It may take several months from placing an inquiry to an agreement with a partner.
“There are two ways to find a partner. First, you can look for a partner yourself and sign up for newsletters with offers posted online. Second, you can create your company’s profile and post it on the Internet for everyone to see your offer,” Alina Strilets says, noting that the search of a partner may take some time.
Advice 8. Register a trademark
A trademark registered in Ukraine or a patent received here are legally enforceable only in our country, Viktoria Kravtsova, an international registration specialist at Grades Patent Bureau notes. Therefore, companies entering the EU market or markets in other countries should receive international registration.
“What could happen if you won’t think about protection of intellectual property in due time? It’s like starting construction of a house without buying land for it,” Mrs. Kravtsova emphasizes.
There are several ways of protecting a trademark in the European Union: filing international registration according to Madrid system (for example, if you need only some EU states), or registering a European trademark (protection in all EU member states). The price starts at 800 euros.
Advice 9. Promote your product
You have to find the ways of entering information space of target markets, Oleh Miroshnychenko, an export consultant says.
“It is important to make your company accessible from communication standpoint. If someone needs your product, he will look for it on the Internet. Therefore, it is important to make sure that you are ready for it, that people can find you,” Volodymyr Usov, the founder of Kwambio 3D printing factory says. “In our case, the search engine produced zero results in response to “kwambio” query in the past, but today, there are tens of thousands of results.”
The possibilities offered by LinkedIn are often underestimated in Ukraine, Oleh Miroshnychenko adds. “It’s a professional network where you can join specialized groups, and thence contact directly the persons making decisions at companies of buyers, distributors and strategic partners.”
Promotion of a product requires resources, sometimes time and sometimes financial, Tetiana Miskova adds. Therefore, you should thoroughly assess the budget your company has for that purpose.
Advice 10. Do not expect results “yesterday”
Ukrainian entrepreneurs must understand that successful export may not happen at first attempt. Moreover, it usually takes six months to one year from the time you start working on entering a foreign market and until you sign a contract.
“A business owner must be ready to grow and change every day,” Vladyslav Faleiev says. “For export is a daily work.”
You should apply systemic approach in the matters of export, working on your company’s export strategy of entering a new market, Tetiana Miskova adds. For that purpose, a lot of time and efforts often should be invested in preparation of a contract with a foreign partner. “But in the end, this cooperation would bring your company stable, guaranteed income in a long-term perspective,” the expert sums up.
Based on materials of the conference “Business together: how to enter the European market”
The original artice was published on Delo.ua