Making the French Connection
Just how easy is it for Kiwi Exporters to sell into the French market?
When my husband Alex and I visited France in April and May this year, our feet had barely touched French soil, when we fell across evidence of New Zealand in the market place.
After checking in to our Paris hotel, we stretched our legs in the elegant St. Germaine des Prés area. Strolling amongst the designer boutiques and shops, we couldn’t miss floor to ceiling glass windows with the words ‘Design Nouvelle Zélande – David Trubridge, Dilana Rugs, Jeremy Cole, emblazoned in bright green. The ‘Sentou’ designer gallery was lit up with David Trubridge’s vibrant, hanging lights, in natural wood lacquered inside in yellow, orange, turquoise or pink, inspired by the flowers and seas of the Pacific.
This was only the beginning. We saw little bottles of H20 NZ water on the shelves in the gourmet food hall of Paris’s oldest department store, the local foodies’ favourite, Au Bon Marché.
While in Lyon, because all fresh food items must display the country of origin , in the Marché Presqu’ile mini-market across from our hotel, we discovered NZ red onions, which were also for sale in the town’s ancient covered market, along with our kiwifruit.
In Arles, Provence, a blackboard in a little restaurant where we had lunch, listed ‘Jarret Agneau’, lamb shanks from NZ.
It was not only products. Our visits to well-known monuments included the Pompidou Centre, where NZ architect, Brendan Macfarlane, in a Swiss partnership (Jakob+Macfarlane), has used his talents to redesign the sleek Chez George restaurant linked to an open-air café looking out across the roofs of Paris.
With such an interesting mix, there was plenty to discuss with the Trade Commissioner to France Ariane Gonzalez, when we met up in her Paris office.
Gonzalez says France is a very good market for everything that is new, innovative and features good design - one where high value products with high margins can work, offering niche opportunities.
“France is an interesting market and there are a lot of opportunities. It is a sophisticated, mature market, led by consumer demand. Despite some economic problems affecting Europe at the moment, the consumption level in France is still quite high”.
“We have seen this with some companies recently establishing an office in France. In the payments industry (ATM & EFTPOS), for example, a company in the technology area has opened an office and is now a distributive partner”.
Gonzalez also believes there are further openings in healthcare, especially in the field of natural products linked to ‘wellness’.
“France is a market with an ageing population, so people are more and more concerned about their health and are taking more and more natural remedies.
“The leisure industry is another one to consider. We have a thirty-five hour week here, which means people spend a lot of time renovating their houses and indulging in leisure time activities”.
So, how do we go about it?
According to Gonzalez, commitment is the key and the message to NZ exporters is that it can take a long time and cost money, hence it is essential to do your homework. France is a long way from NZ and arriving unprepared is a waste of time and money.
It can take a year before anything happens, because for Europeans, French people in particular, relationships are very important. This means you have to spend time with the people involved.
Again, because NZ is so far away, it is essential to maintain an ongoing link, which means identifying a good partner in France. Sometimes establishing a presence in the market, to be close to your client base, can be a good move as well. Exporters need to find the right people to understand the bureaucracy. NZ is an easy country to do business with. France is not.
“Doing your homework and building a relationship with your partner can mean very good sales, maybe not in volume, but in terms of value. Very often, I think exporters don’t understand they don’t have to decrease their price when they come here. Distributors take 30% to 40% minimum and the best way to reach your sale price is to work backwards”.
Gonzalez has some recommendations for would-be exporters.
Contracts should be looked at carefully, she advises. When you sign a distribution agreement be careful of ‘exclusivity’ which can bring with it indemnities and payments if the contract is broken. Secondly, even if you ask the distributor to be exclusive in France, as members of the EU, if someone in Italy for instance asks for the product, normally the distributor can’t say no. Beware of regulations, too. Usually France follows EU regulations, but there are some exceptions, especially in the construction sector. Under French law, even in cosmetics, everything has to be translated into French, labeled in French and in the case of the latter, the formulation held by local pharmacists.
When it comes to making an appointment, don’t phone the CEO of a big company at the last minute. It doesn’t work. Give them at least three weeks notice. Dress formally when you start, that means a tie, so no t-shirts and smart dress for women. Of course, be on time and prepared. You can bring a gift, but this isn’t necessary on your first visit. If you have a distributor in France, an All Black t-shirt or bottle of NZ wine is always well received.
“The French are often very surprised by the quality of NZ wine and you can now find it on retail shelves of specialised stores in France like ‘Lavinia’, an outlet selling wines from around the world”, Gonzalez says. “It’s still niche, but it is increasing and is quite a good reference market for luxury or design goods in general.
“This means, you may sell to France, maybe not big volume but high value and being here means you will be seen by international buyers. “When NZ looks at the market, it usually sees Europe and the UK, but the UK is part of Europe. For some companies it is a very smart move to start with the UK, because it is a natural market, but for others, it can be smarter to start with another European market, like France. This happened with an ICT company, which found the right partner in France, after trying unsuccessfully in England for four years”.
For Wellington based natural skin and haircare company Trilogy, things happened in reverse. Communications Manager Catherine de Groot who agrees that the correct distribution partner is the most crucial step to making the market, explained their entry to the French market came with an enquiry from Printemps Department store, a forward thinking top retailer which showcases the best in European goods.
“We took the opportunity to make an agreement with Printemps and had an easy entrée into the market”. Yet, de Groot says, it is one thing to get yourselves on the shelves and another to get yourselves off the shelves into customers’ hands once you are there. “That is the hard part. You need continued support to make those sales”.
France has been a great place to showcase their products and a launch pad to further distribution enquiries from other markets.
When considering selling goods in France, contacts like Ariane Gonzalez, John Gore, Director Eurofair Ltd, specialising in Trade Fairs worldwide, says success lies in relationships and the building and maintaining of them. He has heard French exhibitors described as aloof and never very effusive about their product. “You have to ask, show genuine interest and ‘buy into the story’ before they engage”.
When Alex and I were exporting some years ago, we also traded in France, selling fresh onions. It was a niche market and it wasn’t easy, but attitude and effort had a lot to do with our success. On this trip once again, we found the French react with warmth and a great desire to help when asked, if approached with a smile accompanied by an effort to speak the language to the best of your ability, even if it is just the pleasantries.
Ariane Gonzalaz agrees Kiwis do find it hard because of different attitudes.
“I am told by Kiwis that they are scared, but I tell them not to be scared, because we are not scary people. The French have open markets and open minds, much more so than before. Today half the population can hold a conversation in English. It really has changed”. Today, France sees NZ as a beautiful country that is clean, green and exotic. Not only as an excellent provider of food and beverage, but also increasingly as an innovative country in areas like technology.
This does present openings for our exporters, and importantly, it could provide that entrance into England and other European markets. Good things take time.
Published in NZ Business July 2008
Linda Donald reports from Paris