Prepare well. Export successfully.
Economic crises, protectionism, competition from the emerging markets, and digitalization are changing the world of export. With the right strategy, however, Swiss SMEs can cultivate new markets, take their place in the global market, and succeed in the export sector.
Swiss foreign trade was strong in 2019
Last year, according to foreign trade statistics from the Swiss Federal Customs Administration, Swiss companies exported goods in the amount of CHF 312 billion, a CHF 8 billion year-on-year increase. Most exports were sent to Germany, accounting for CHF 48 billion in 2019.
The second most important export country is the US, where goods in the amount of more than CHF 44 billion were delivered. China is catching up. With an export volume of some CHF 21 billion, the Chinese market takes fourth place in the foreign trade statistics, behind the United Kingdom.
The export business is challenging
This year, export volume will be lower due to the outbreak of the coronavirus pandemic, but the market will remain difficult even after COVID-19 vanishes. "In terms of business, the world will be completely different than the one we knew before the crisis," according to Simone Wyss Fedele, CEO of Switzerland Global Enterprise (S-GE), in an interview. Companies must prepare: "They need to consider which markets they want to do business in, which partners they want to work with, which competitors they might have, and how they can adapt their own business models to the new client needs."
But challenges such as these are no match for Swiss export enterprises. The same view is taken by the SME Study from Credit Suisse. It looked at trade barriers before COVID-19, which had risen significantly since the financial crisis and are likely to increase once again due to the coronavirus pandemic. "As a family-owned business, we have to adapt to the environment in which we operate, because we cannot change it," noted Adrian Steiner, CEO of coffee maker manufacturer Thermoplan, in the study.
Good preparation is key for exporting from Switzerland
For Swiss SMEs, however, there is a world of difference among export customers in Germany, the US, and China. Cultural specificities, customs regulations, sales platforms, marketing tools, and data protection and privacy laws are very different.
Good preparation is crucial. "Time and again, we notice that some companies enter a new market without having studied the country's conditions in detail," says Stefan Gerig, Head of Export Finance at Credit Suisse. He advises companies regarding financial products and loans. Tapping into a new export country can be a long process in some cases.
The right export strategy
Key factors in the world of export include innovation skills, a clear USP, and solid knowledge about client needs in the destination country. In addition, the "Swiss Made" label can provide an advantage over the international competition.
However, the right export strategy depends on the export country and the company. For instance, Geistlich Pharma AG relies on subsidiaries, while the Götti glasses brand has started one in the US only but exports directly from Switzerland or via Germany for other countries.