History of the European Market

Published by Sander Donker on Oct 29, 2019 in Global Reports
1 European law 


The EU, as you see worldwide, more or less, has a government that is careful with products they don’t know. Customs often caused delays and extra costs. Health inspections were executing law but were not informed about how to prevent fines and confiscations. Evolving laws and health inspections with questionable motives made the word “EU compliant” an illusion.

2 Cashflow


As distribution companies were fairly new and growing, you always had a challenge with cashflow. Help from banks was tough since the business was new and had a bad name. Often athletes were caught on doping and blamed ‘bad’ supplements. 

The products were very expensive through high margins compared to European standards. The average net income was, and is, much lower than in the US and Canada. The international business was booming for US and Canadian supplement companies and because of the high demand, they could ask for the higher margins. 

3 Cultural differences between US/Canada and Europe


The difference in culture on “how to do business”, often caused delays and therefore stock issues. 

4 Differences per EU country


Europe is a collection of many countries, all with different laws and cultures. Yes, most countries are (still) a part of the EU but to unite will be a process of many decades. We are ‘old’, we have various beautiful cultures. Which is great for sightseeing, tourists, etc. But it separates us, and therefore makes it slower in becoming united.


Next to that, we saw a different development per area. The US was leading in innovation when it came to formulation, but also marketing. To identify the differences in development, and with that, the approach on sales per area, we identified the UK, Western and Eastern Europe. Of course, the UK had the advantage of speaking the same language, but also development-wise, it was the closest to the US and Canada. Then came Western Europe, where English is part of the education in most countries. The most ‘behind’ was, and is, Eastern Europe, where English was hardly spoken. During the cold war, there was West and East. West was supported by English speaking nations and the East was supported by Russia. 
New brands, or products, were easier to pitch in the UK, than the West and than the East. The demand for ‘old’, and therefore, trusted names (Universal, Muscletech, etc) was higher in the East than the new and hot brands. There is a Dutch saying: “A farmer won’t eat what he doesn’t know”.
While being in this phase, we knew that in the future we would move on to a different position. By growing our companies and increasing our orders, we would be in a position that we could actually make some demands and begin the journey towards a changing economy and a developing market.

 

Sander Donker

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