Even though a large part of the basic demand for goods and services is already covered in mature markets, Swiss exporters are positioning themselves in profitable niches in these countries. Some three out of four Swiss export francs are earned in mature markets. These are also the main drivers of growth in foreign trade. Since the global economic crisis of 2009, two thirds of export growth has been attributable to mature markets.
The Eurozone is by far the most important trade partner for Switzerland. Exports to these countries account for almost half of the foreign trade volume. This is all the more remarkable because the Eurozone continued to find itself at a low ebb well after the global economic crisis. “Cultural and geographic proximity and privileged market access make exporting to the Euro countries attractive. They have also established themselves as good entry markets for export beginners,” comments Daniel Küng, CEO of Switzerland Global Enterprise. Measured in terms of export volume, the USA comes in second place with 16%; Japan and Canada account for 3.3% and 1.6% of total exports respectively.
Mature markets as bulwark of internationalization
However, exports to mature markets also involve challenges that exporters often underestimate due to the cultural similarities. They must observe local regulations, adapt business models to the target country and convince through their outstanding innovative strength in order to assert themselves against strong competition. In addition, there are an increasing number of trade barriers and political uncertainties such as Brexit, or the still-unclear future of Swiss relations with the EU. “Exporting to mature markets is no walk in the park. However, it often forms the commercial basis for exploiting emerging markets with higher growth rates,” says Daniel Küng.
Swiss exports to mature markets are expected to continue to grow over the next few years, above all to Germany. However, there is also great potential for growth in other countries such as Canada. Although the North American country does not currently play a major role in the statistics, the growth trend is continuing and Canada is likely to become increasingly important for Swiss exports. In the last 20 years alone, exports of goods to these countries have risen by an average of 7.5% per year.
The high standard of living in mature markets also ensures that demand for Swiss luxury goods remains high, which supports exports by the watch industry, among others. Demographic developments in Japan are also opening up new business opportunities for the chemical and pharmaceutical industries.
About the study
The Switzerland Global Enterprise study was carried out in collaboration with Credit Suisse and examines the five markets of Germany, the USA, France, Canada and Japan. It examines economic relations between Switzerland and the respective countries, the development of export business and the potential for the various sectors. These foreign trade facts are supplemented with practical tips on how Swiss SMEs can successfully exploit their target markets and expand their business locally. The study confirms and deepens the annual ranking of the top export markets, which S-GE has compiled together with the ETH Zurich’s KOF Swiss Economic Institute.
Growth in mature markets – also the topic of the Aussenwirtschaftsforum with Swiss Federal Councillor Guy Parmelin
Taking place March 26, 2019 at Messe Zurich, Switzerland Global Enterprise’s Aussenwirtschaftsforum is the rendezvous of the year for Swiss exporters. This year’s topic is: “Europe, USA and co.: growing in mature markets”. Small and middle-sized businesses will find inspiration and practical advice for their international operations here. The new Swiss Minister for Economic Affairs, Federal Councillor Guy Parmelin, will speak at the Forum about his foreign trade policies and the importance of exports.