Hybrid Export can help develop new enterprising export growth for you
The way that we trade across the world is changing is almost beyond any recognition. The acceleration in the growth of digital marketing caused by the COVID pandemic combined with changing lifestyles and demographics means that successful exporters have to throw out the ‘way we do things around here’ and ‘I rely on my contacts from 20 years in this industry’ mentality.
Any serious exporter must now, constantly review their thinking and activities – there is simply no room for complacency.
As Bob Dylan sang all those years ago:
Cricket is growing big time in so-called ‘non-cricket playing countries’ due to immigration from major cricket playing nations.
In the USA it is estimated that there around 25 million people from India, Pakistan and other countries where cricket is almost like a religion so Cricket USA have just signed a long-term lease to convert a baseball stadium in Houston, Texas into a Major Cricket League stadium. Cricket taking over a baseball stadium!
In Germany, due to asylum seekers, primarily from Afghanistan, cricket is the fastest-growing sport. There used to be four cricket clubs in Bavaria – now there are 50+. Often cricket is played indoor in handball halls. Handball is a traditional sport in Germany which has seen a dramatic decline in participation during the last few years, so there are plenty of empty slots for cricket to move into.
What is happening around you which is impacting your business, both positively and negatively?
The days of manufacturing some confectionary, say, in Denmark and then shipping them to an overseas agent, who then uses their ‘little black contact book’ to sell this on to a retailer paying a listing fee and running a ‘3 for 2’ promotion, they are long gone.
You need to be much better aligned and engaged with the markets you are operating in and one can then discuss whether you are better off using social media and direct consumer communication to ‘listen and learn’ from your markets or you should work with a local partner who would act as a middleman and communicator? The answer is probably that it depends on your set-up, skills and culture. If you are pressed internally, you should probably work through a local partner, but long-term you will be better off developing the skills and culture to do the ‘listening’ yourself, as you will learn so much more from that approach.
We are seeing several ‘export disruptors’ who are completely ignoring the ‘rulebook’
Copenhagen Sparkling Tea is an innovative beverage category developed by the Danish award-winning sommelier Jacob Kocemba. The exclusive taste is achieved using carefully selected teas and solely organic ingredients. The tea leaves soak in both hot and cold water over and extensive period of time, to extract the perfect flavour. With its high complexity in taste, it is one of the best “high-end” non- and low-alcoholic products on the market today.
In May 2017 the first bottle of Sparkling Tea was sold in Copenhagen. Sparkling Tea has grown rapidly and is now sold in 16+ countries and served at more than 45 Michelin restaurants worldwide.
Brit moves English pub lock, stock and beer barrels to Germany to introduce the locals to a traditional English boozer
The New Crown Hotel in Bridlington, East Yorkshire was converted into flats in October 2019 year and the bar’s fixtures and fittings sold as part of a major development.
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During the Georgian House development, Paul Moss purchased all the bar equipment and fittings, including the exterior sign, with a vision to open a traditional British pub in Iserlohn, Germany.
Mr Moss says he can’t wait to see customers frequent the bar which will be serving English, Irish and German beers. “We removed all the fixtures and fittings from the New Crown in Bridlington, everything connected to the pub.
“We filled up a great big container around a year ago and got some regulars from a local pub to help load the lorry. We promised to update them once we were ready to open.
From medical student to global knitter
In 2018 Danish Mette Wendelboe Okkels was only one year from finishing her studies to become a doctor when a life long dream took hold of her. In 2016 she had started her own business, Petite Knit, where she was selling her own knitting patterns and the business was now doing so well she could make a living from it.
It was a very difficult decision but in the end, she took the jump and she has not regretted it for one second.
“The interest in Nordic knitting patterns across the world is growing and we now have retailers and webshops ascross the world. One country where we are doing really well in South Korea,” says Mette Wendelboe Okkels.
Across the world, the interest in knitting has blossomed due to lockdowns, so Petite Knit has seen a growth in the demand for beginner patterns. As she says, “knitting is no longer perceived as an activity for older people, certainly not”.
342.000 followers on Instagram One of the charming labels customers can add to their jumpers, etc.
There are four elements in the Hybrid Export model and the key to using it successfully
Digital – as you will have noticed from the case-studies above all exporting entrepreneurs see digital communication as a key strand of their exporting communication and engagement activities.
Your international social media presence must be fun, professional and consistent and above all authentic. So digital is not just about skills, but also about developing a culture where the people within your business who are in charge of your social media engagement are fully informed of what is happening at your business. They should have the freedom to respond to any developments, as and when they happen.
It is also important that you recognise the regional and national differences when it comes to which social media platforms you are using in the places where you are trading.
Place – where you are selling your goods from is becoming ever more complicated. You need to acutely aware of the retail landscape in your markets and on how they are evolving.
Pop-up shops, festivals, events, e-commerce, concessions, vending machines etc. the opportunities for places to promote and sell your products are almost endless. The balance lies, of course, between diversifying your presence and not to be too reliant on that one big supermarket with spreading yourself too thinly across (too) many places.
Japan has an increasing number of vending machines, even for selling cars. There are huge varieties of car vending machines saving both space and payroll cost. Customers can purchase a car through an online mode and select to take delivery of their car.
Car vending machines in Japan
Product – some manufacturers regard any kind of product adaptation as too much hassle (I remember an English production manager objecting to dual language packaging with the remark “why can’t the Italians read English?), whereas others are more than happy to cater for local tastes and reap the benefits.
One of those is KitKat who are more than happy to encourage local versions of KitKat, such as a kimchi version in South Koreas and a sake version in Japan. Why not?
Anther great example of adapting their product to local markets and tastes is Fleetwood, England-based Fisherman’s Friend.
Britain, they tend to view the Fisherman’s Friend – a brown lozenge made of a tongue-numbing blend of liquorice, menthol and eucalyptus oil – rather like Marmite.
It’s an old-fashioned love-it-or-loathe-it product which people of a certain age might take as a cough remedy. At seven times the strength of your average menthol chew, it is not to every taste.
But for every 100 of the feisty little lozenges pouring off the production line in Lancashire, 97 will end up abroad.
The Germans get through packs of Fisherman’s Friend in much the same way that we consume crisps or chocolate bars.
Young Germans see it as a funky pick-me-up, a sort of chewy Red Bull.
In many Far Eastern countries, the lozenges are regarded as a luxury item on a par with a box of chocolates. Thailand loves fruity Fisherman’s Friend in chewing gum form. So it goes on.
So, how can you adapt your products to suit local tastes?
that thinks pickled fish is yummy.
Price – Unfortunately, I have experienced many cases where an ad-hoc approach to pricing has caused serious problems like the rise of Amazon and other e-commerce platforms have enabled consumers to shop around and do deals in cross-border trade, often avoiding border taxes.For export prices, we suggest three things before you consider
- Know all the shipping cost, duties and insurance etc; from a range of one item up to a 40ft container. This gives you a good overview covering e-commerce platforms, overseas partners even the with grey market movements and likely cross border operators
- Work back the known retail price and deduct the supply chains margins settings if you are not selling direct. If you are selling directly then decide what is your minimum and maximum margin requirements?
- Allow for estimated promotional costs, overrides, bonuses etc. if you are selling through the major retail channels and leave room for movement in your pricing structure.
Any attempt to price your product differently in different markets is now a futile exercise and combining the four strands in the Hybrid Export model, you can now develop a hybrid export growth vision and plan.
Set up a Hybrid Export project group
To get going on developing this vision and your first steps, get your most enterprising people together and get them to think creatively about the opportunities and encourage them to ‘think wrong’ and put the four strands together in all sorts of combinations.
They should focus on your strengths, and find the areas where you are unique and you have a real purpose. Remember, this is NOT another business plan, strategy and 5-year plan – it is about your organisation’s culture and enterprise.
Good luck and if you want to have a chat about how we can help with developing your Hybrid Export do get in touch on 07540334043 or email me on hlp@optimumexport.com.