1. Define yourself and your offer before searching for buyers
The more precise you are about what you can offer, the better you can target the right buyers. Therefore, before searching for buyers define the product(s) you are offering. Include a product description, quality and quantity that you can offer, price category and certificates. After that, find out your Unique Selling Point (USP): what differentiates your product from its competitors? This can be excelling in the quality of the product, offer attractive prices or an innovative product that competitors do not offer.
Once you have defined your product and USP you already know what type of buyers to look for. This will save you time when creating a list of potential buyers. If, for instance, you target a niche market like organic sustainable home textiles, you already can skip buyers that only sell low-cost mainstream textiles.
2. Do market research to find out which segment offers you the best opportunities
After having defined yourself and your offer, the next step in finding European buyers will be doing market research. Find out how the European market works, and which markets or segments have the best potential for your offer. Be aware that the largest or closest markets are not always the best choice. Look at different European countries and their characteristics in the HDHT market. There is a lot of useful market information on the internet
3. Target the right buyers and know your buyers before contacting them
The next step is to target the right buyers. What are their needs and wishes and how should you communicate with them? There are different ways to search for buyers; browse on the internet, go visit trade fairs and talk with buyers to find out what is important to them.
The traditional patterns through which HDHT products are put on the market is via the following channels: import takes place via importers/wholesalers that supply to retailers. Larger retail chains often bypass the importers/wholesalers and import themselves. Online platforms become increasingly prominent. In some cases, buying agents play a role. Below, the main type of buyers in the HDHT market are highlighted:
- Wholesalers / importers are the main channel between exporters in developing countries and European retailers. They sell products to retailers in their own country or region, or re-export to the broader European continent and take care of the import procedures. They are interesting if you want to develop a long-term relationship and they usually have good knowledge of the European market. They can provide you with valuable information and guidance on market preferences.
- As the market is becoming more and more competitive, large retailers are increasingly importing directly from their suppliers in developing countries. In this way, they can cut out the margins of the wholesaler and reduce delivery time to the market. Because of this trend, the self-importing retailers might be harder in the negotiation process. There is a tendency for consolidation in European retail, with large retail brands becoming more spread out over Europe.
- Online sales are an increasingly prominent channel through which HDHT products are sold in Europe. Web shops are well established and quite diversified. For developing country exporters, it is practically impossible to supply their product online to the European consumers directly due to the short delivery times that have become the norm in Europe and the resulting need for stocking in-market.
- An alternative distribution channel you could use is buying agents. They do not import but represent European buyers in the sourcing countries. Agents can work individually or as part of purchasing companies. They mostly act on the base of commission. However, this entry channel is less common.
On the basis of distribution channels to reach the consumer, the European market is segmented into specialty or gift shops, small retailers, department or home decor stores, mass merchandise retailers (like discount stores and drugstore chains), direct sales and internet. In general, mass merchandise retailers account for the largest share of the HDHT market, followed by department or home decor stores. However, this may differ depending on the type of product you offer. Below the different channels are described:
- Specialty shops and gift shops are smaller stores which focus specifically on one niche. In this case, specialty shops are interesting for products with a gift element or specific products such as candles.
- Small retailers: smaller, independent European retailers continue to purchase mainly from domestic wholesalers/importers. Independent retailers in home decoration are struggling to compete with retail chains. They need to differentiate on value-added service, as well as specialised offers and authenticity. These buyers typically prefer orders for small quantities of each item, small total order volumes and delivery to their doorstep, with a limited likelihood of repeat orders.
- Department stores or Home Décor stores. Department stores are large retail establishments that offer a wide variety of items such as clothes, electronics, toys, furniture and home decorations.
- Mass merchandise retailers are companies that affordably sell large quantities of goods that appeal to a wide variety of consumers. They are not necessarily known for selling durable, high-quality products, but they do meet the consumers’ needs at reasonable prices.
- Direct Sales: large retailers are increasingly importing for themselves instead of through European wholesale importers. The advantages are cutting out the margins of the wholesaler and reducing delivery time to the market. The trend of direct sourcing is expected to continue in future and may create more opportunities for you.
- Online: e-commerce in the HDHT sector is increasing. It can help you reach a broader range of customers. Retailers often combine online and offline channels. Consumers research and purchase products online. They shop around and compare prices on home decoration items.
In targeting new buyers, marketing mix and business to business factors can guide you on your way:
Marketing Mix factors
- Product: does your product offer match or complement that of the buyer? Compare the product category they are in and the product groups they have or seem to miss. An importer in Dining may be in need of the cutlery, teapots or coasters that you are offering. In addition, are they in the hand-made or industrial segment, or a mix of both? How does that give you an opportunity?
- Price/value: in which value segment (high, mid, low – see above) are they? Does that match your design value, export capacity, and price? Place: what is their place in the distribution chain: wholesaler, single retailer, multiple retailers, are they off- or online, are they using agents or importing directly. In addition, cross-check if they are actually importing from outside of Europe (some are EU manufacturers or partly so; others are producing in or importing from Europe.
- Promotion: what values do they communicate: for example, sustainable values, value for money, or ‘design’.
Business to business factors: what are the service requirements needed by the buyer:
- Large volume/low price, fast or slow turnaround, timeless design or trend?
- Logistical demands: where is the buyer situated, how will he import, how can you provide convenience and low cost? If buyers are already sourcing from your country or region, your chances are higher, as this would allow them to consolidate orders and save cost.
- What are the buyer’s terms of trading (and terms of payment)? Will you be able to find a way to negotiate a win-win deal?
- Is this a country with a preferential import duty arrangement or will the buyer pay full duty importing from you?
Vietnam has become dominant in the product group of garden pottery due to their operational excellence: they can offer mass, at good prices, through innovative design and product techniques. Peruvian styles are strongly ethnic and decorative and cater for niches based on a need for ‘Latin American’ accessories. Indonesian basketry follows trend. Philippines homewares do not follow trend but come from the designer’s heart.
4. Attend trade fairs and industry events where you can find buyers
Buyers participate in the well-known trade fairs; it is their main showroom for introducing new collections to customers. This makes trade fairs a great place to meet potential buyers face-to-face. As exhibiting is usually expensive, it is advisable to go to a trade fair as a visitor first. The advantage is that you can get a feel for the event, spend time talking with buyers and exhibitors without the stress of running your own stand and you can find out which halls are most suitable for you.
5. Visit the websites of European and national sector associations
Sector associations play an important role in the representation and promotion of the sector. Each association targets a specific market in the HDHT industry. They can provide you with important information on the requirements and developments in a specific market. Moreover, associations have an extensive network and, as such, can be a good source to find potential buyers.
Start with visiting websites of the associations that cover your product / market at the international and European level. European associations may have a list of members on their website and often consist of national associations and large manufacturers in the industry. In turn, national associations have information on their members and these can be a good source for finding potential buyers. Focus on the associations in those countries where there is most demand for your product.
6. Use online advertising
It is important that buyers looking for new offers can find you online. You can start with building your own website or if you already have one, making sure it is up to date. On the website your unique selling point accompanied with a strong message should be clearly presented. Make it visual by adding images and videos. Determine how you can attract potential buyers to your website – what is important to buyers? – and implement it on your website.
After you have finished your website, you should make sure potential buyers can easily find you on the internet. Search engines are often used to discover content on websites. Buyers might also make use of search engines to find you. Hence, you should be visible in search engines. You can maximise the number of visitors with the use of Search Engine Optimisation (SEO). This tool ensures that your site appears high on the list of search engines.
In addition to your website, social networks are a good tool to promote your company successfully, locally. They enable persons or companies to create and share content and to connect with one another (hereby increasing your social network). The most common social platforms in Europe include Facebook, Instagram, Youtube, Twitter, and LinkedIn. In comparison to the other social platforms, LinkedIn is somewhat different in that it is only for the purpose of professional networking.
7. Make use of databases and matchmaking services
You can make use of company databases to create a list of potential customers to target. Via the chambers of commerce of a specific country (like Netherlands Chamber of Commerce) you can search for potential buyers. In addition, there are several business directories that are helpful. However, be aware not to buy standard databases. These may contain a lot of addresses, but in many cases a high percentage of these addresses are irrelevant.
If you need help with finding potential buyers, there are matchmaking service organisations. They will link you to relevant potential buyers and prevent an overload of irrelevant addresses. They usually work for a fee or on commission basis, providing you with distributor contacts or contacting distributers on your behalf.
Matchmaking service organisations are not associated, so you will have to actively seek them out. This can be done online or via local non-governmental organisations (NGOs) or sector experts. Large trade fairs also may have matchmaking facilities. A typical example of a matchmaker is Germany’s CDH.
8. Look for (non-) governmental organisations that can provide support
In your country or your target market there are often (non-) governmental organisations that support international business activities and can help you with your export. Get into contact with embassies of your country in the target market, chambers of commerce or export promotion agencies to get started with your export activities.
In addition, Business Support Organisations (BSO’s) fund export-related activities such as market research, matchmaking and trade fairs. Look for BSO’s that can provide you with the information on the specific market you are looking for.
9. Search the webshops of online retailers
Online sales are an increasingly prominent channel through which HDHT products are sold in Europe. Webshops are well established and quite diversified and large retailers and department stores all have webshops as part of their sales strategy. These webshops display all the products on offer. Here, also suppliers or brands are mentioned and hence could be a manner to find your target group.