France is an attractive market for businesses that seek to expand. With a gross domestic product (GDP) of $2.583 trillion annually, it is the world's seventh largest economy. It is a high-income country that ranked 19th on the list of countries according to GDP per capita in 2018. France has a highly developed, free-market economy complemented by a very high Human Development Index.
You have to look beyond the statistics, however, if you are trying to penetrate the French market. Aside from doing the usual market research, feasibility studies, competitor analysis and business plan, there are essential factors you have to take into account. It greatly helps if you emphasize on how potential customers think and typically behave.
1. Buyers love the old and familiar, but they can be receptive to new and innovative products.
The French commercial environment is good for exporters or foreign companies that plan to expand to foreign markets. American companies, in particular, can expect a favorable market for the sale of their goods and services in France. However, it's important to prepare for the tendency of French customers to patronize known brands, especially the local ones. They prefer familiar companies that have already proven their worth in delivering good product quality and customer service. Nevertheless, they can also be receptive to new products, especially those that offer something different.
For this, you need to prepare for intensive marketing efforts. Invest in high-quality marketing campaigns designed to dynamically respond to what competitors are doing. You need to double your efforts to convince local consumers to try what you are offering. The French are not averse to foreign and unfamiliar products or brands. You need to make sure they become aware of your product, including its advantages or innovative features.
Fortunately, it wouldn't be difficult to find companies that will serve as local partners in the French market. These companies can help in areas such as distribution and networking with local suppliers. They can also be of great assistance when it comes to dealing with regulations and other government-related matters.
2. Communicating in French is a must.
The French language is vital in reaching out to potential customers in France. It's not only because the French appreciate it when you try to talk to them in their language but, more importantly, because of regulations. French is a necessity in product offers and presentations, user manuals, terms of service, and all other designations of a product or service. Invoices and receipts, likewise, need to be in French.
All of these requirements are under the Toubon Law and the French Code of Consumption, which set regulations on the use of the French language. Accordingly, French should be used not only in product packaging and marketing materials, but also in trade and labor relations, contracts (regardless of their form and purpose), job offers, and other documents pertaining to the social relations of a company.
If your company does not have someone with adequate fluency in French, you'll have to hire competent language services. It's not enough to simply translate texts or interpret verbal messages to French, though; the regulations demand legibility, audibility and intelligibility.
3. The use of agents must be in accordance with European Union and French laws.
The use of agents, distributors or franchisees in distributing products to the French market must meet the legal requirements set by France and the EU. It can't be an informal arrangement.
There are many legal and technical details in this regard, and this post is not enough to discuss all of them. Businesses that seek to enter the French market are advised to consult relevant business organizations, including the American Chamber of Commerce in France, Business France, the European American Chamber of Commerce in France, and the French-American Chamber of Commerce in the United States. You should also hire a legal translation agency to make sure all the documents are properly translated.
4. E-commerce is a good starting point.
France is one of the world's largest e-commerce markets. In 2019, it ranked as the sixth biggest e-commerce market in the world valued at $43 billion. It's not as big as the Chinese ($672 billion) or U.S. ($340 billion) e-commerce market, but it's a significant market for online sellers to exploit. E-commerce is a good starting point for penetrating the French market.
If you are having second thoughts about expanding your brand to France, consider marketing your products to French buyers online first. You don't have to set up a base of operations in France itself yet. As you explore the possibility of gaining French customers, you can use the online route temporarily. It's a good way to test the myths of French consumer behavior. If you are able to sell your non-French and little-known brand to customers in France online, there's a good chance you will succeed with your expansion plans as you decide go all out, with intensive marketing campaigns and a full-fledged branch in a major French city.
5. Buying decisions are based on quality, price and after-sales service.
There's nothing surprising here. Just like most other consumers, the French value quality and good customer service. They don't ignore price, but they will pay for something expensive if the price corresponds to the quality of the product or service. They will not actively hunt for the lowest prices, so offer something that will pique buyer interest, make sure it is of excellent quality, and price it accordingly.
You can't just offer something with a 1,000% markup, believing that French customers won't mind the high price. They are savvy shoppers who can find good alternatives if they think something is overpriced.
On the other hand, it's important to offer outstanding after-sales service. Leave a good impression for every sale made. Dissatisfied customers are inevitable, but you need to try your best to minimize the number of complaints or unflattering comments about your products. If there are problems, address them promptly and satisfactorily. Word of mouth is still a big deal in French commerce. Customer rants on social media or bad reviews and ratings on online stores or marketplaces can significantly affect your business in adverse ways.
Bonus tip: Many French consumers are fond of social media and online interactions. According to Alexa and SimilarWeb, the top sites in the country include YouTube, Facebook, Instagram, Twitter, VK, and other sites that allow people to connect with each other and leave or respond to comments. This means that online marketing is not just an option but a must for anyone seeking a share of the French market.
France is an attractive and viable market for business expansions, but you shouldn't decide to introduce your products or services in this country on a whim. You need to come up with a market study and business plan. You should conduct a competition analysis. Additionally, you have to evaluate consumer behavior, identity opportunities and risks, and acquaint yourself with market regulations.