Exporting: a gamble worth taking
Good news: despite the COVID-19 crisis, almost all executives surveyed (97%) remain confident in their company's future.
Furthermore, 41% of the companies surveyed are already exporters, with international business accounting for an average of 12% of their revenue. Among non-exporting companies, 85% have not attempted to venture abroad.
Among heads of exporting companies, more than half (55%) believe that the COVID-19 crisis has affected international development. The primary consequence has been the postponement of projects over the short to long term.
Whether or not they are already exporting, company leaders have mixed views of international markets, with as many positive as negative perceptions. For 68%, an export strategy is motivating, profitable, and unifying. Whereas for 63%, the undertaking appears complex, risky, and costly.
Among the top three factors facilitating a company’s international development, interviewees cite the management team's commitment (96%), command of foreign languages and cultural norms (95%), and proficiency in digital tools (94%). Closely behind are technical skills and the offering (product or service quality/differentiation), as well as the experience of dedicated export teams.
International expansion is a key strategic pillar in the short and medium term for companies already operating abroad: 60% aim to strengthen their position, while 39% intend to maintain their current level. The objective is to spread risk and identify new growth drivers.
What strategies do exporting companies favor?
Europe is the preferred geographical region for 63% of respondents, with a marked preference for Western Europe (45%). Far behind are Asia (10%), the Americas (9%, including 5% for North America), and Africa (9%, including 6% for North Africa). Countries often perceived as growth 'El Dorados' are not viewed as such by the SME and mid-cap executives surveyed: 40% do not wish to expand into Asia, 28% do not wish to expand into Africa, and 13% do not wish to expand into the Americas.
Exporting companies overwhelmingly favor (63%) the use of a distributor, reseller, or agent. One in four respondents envisioned establishing a commercial office or subsidiary, which requires significant capital. Only 16% of those interviewed contemplated acquiring foreign companies, which they perceived as riskier.
How to overcome obstacles to exporting?
The main difficulty for exporting executives relates to payment risks or delays from foreign clients (50%), followed by the identification of foreign clients or business partners (49%), customs barriers (48%), an offering that is not competitive or innovative enough (43%), logistics costs (42%), language problems (36%), and intercultural understanding (34%).
There is clearly a tangible need for support. Half of the executives surveyed believe that a company cannot develop internationally without the help of experts (48%) or local contacts in the target countries (53%). Moreover, four out of ten have already engaged, or might engage, export professionals.
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