These last three years have been hard for French companies: at the end of 2018, there was first the yellow vest crisis, then in 2019 the port strikes, in Le Havre and Marseille. In 2020, it is the turn of the pandemic and the necessary containment. All companies have been affected and a large number, exsanguinated, are on the verge of bankruptcy – when this has not already occurred.
E-commerce and export: a winning duo to adapt?
Faced with these repeated crises, each one adapts as it can and many of them have decided to invest in e-commerce. It is a good strategy, which is already acquired for digital companies, or those whose products lend themselves to it, such as cosmetics that have sold well on the export market during the confinement. All these brands had to do was to postpone their physical sales online. For the others, more focused on in-store sales, this digital switchover was more difficult but allowed an acceleration of e-commerce which is now indispensable.
If e-commerce is the first necessary adaptation in times of crisis, it remains, alone, confined to the domestic market. To continue to offer an outlet for its products, it must be accompanied by a second shift, which is that of international export. Exports are a major lever of resilience when the domestic economy is disrupted or sluggish: all over the world, other economies continue to function normally and are in demand for French products.
Moreover, in times of pandemic, economies confine and deconfine themselves at different speeds. This also represents a way for a brand to adjust its production and smooth out its stock management, avoiding stockpiling or, on the contrary, stockouts.
A global reflection to reduce the risk
Exporting abroad is the assurance of not being subject to the French market alone, by having outlets elsewhere. It is therefore a first way to diversify your risk. But in a globalized economy, it is no longer possible to think only by country, because the European, Asian and African economies are intrinsically linked. The other way is to diversify your exports to reduce your risk.
Betting only on one continent presents its own geographical risks: exports to Africa are currently being hampered by the slowdown in major infrastructure or telecoms projects, as those who finance them are themselves being penalised by the pandemic. In the Middle East, political instability makes exports uncertain, and the drop in oil prices has penalized the entire local economic fabric. Conversely, Asian economies have been more resilient to the pandemic, and Taiwan and South Korea have even seen an increase in import volumes.
Stop the psychological brakes
Diversified exports are the surest way to protect against domestic risks. But many companies are still prevented from doing so by psychological barriers. Sending a tractor to Australia, for example, may seem like a risk of not getting paid. In reality, banks and insurance companies take this kind of eventuality into account. On the other hand, it is certain that opening up one’s brand for export cannot be improvised: it requires real expertise, which is that of the Chambers of Commerce and the BPI; which accompany companies in this opening up. There remains the complexity of transport and administration. But here again, digital solutions exist to automate these procedures.
Our companies are lucky to belong to the European Union, which benefits from numerous exemptions from customs duties. Above all, they are fortunate to be French, and to benefit from the national influence, even for exporting products that they do not manufacture themselves. This is an asset that we must seize.
Deploying an international development strategy requires agility, and in a context of upheaval this is not an easy thing to do. But for many retail companies, which have not had a normal season for three years, breaking free from the domestic market is a question of survival. While embarking on an export venture may seem like a real adventure, it is also a guarantee of income and learning, which is less well known: understanding what works in a foreign market teaches you a lot about how to develop in your own market.And for French companies, the main lesson of this succession of crises is the importance of diversifying their markets, through a variety of channels, and adopting strategies that are both effective and efficient.And for French companies, the main lesson of this succession of crises is the importance of diversifying in the markets, through diversified channels, and by adopting strategies such as deported stocks abroad, to supply local distributors and customers without ever experiencing a break in the chain.