US DM Trade Mission to Sweden Hopes to Open Baltic Trade
Bruce Harsh, the DOC official in charge of global direct marketing, noted that US companies were pulling back from Asia and to some extent from Latin America in the wake of economic crises and are looking for new opportunities.
The mission is designed to help Americans find them. It is going to Sweden and to Germany, both potentially rich markets for US direct marketing goods and services, and both part of the Baltic basin.
Harsh defines the region as containing ten countries with a combined population of 83 million. It includes the four Scandinavian countries, Lithuania, Latvia, Estonia, Poland, the St. Petersburg and Kaliningrad region of Russia, and the northern coastal strip of Germany.
Sweden is both a good market by itself, Harsh noted, and the best launching pad into the other Baltic markets. It is one of the richest countries in Europe with an excellent DM infrastructure.
Prospects for catalog sales are not that great, Harsh said, but given the high degree of Internet penetration, the Worldwide Web promises to be the best path of entry for US firms.
"The US commercial services offices in Sweden believe that Sweden offer direct marketers a consumer population which speaks fluent English, has tremendous spending power, and a propensity to buy American products.
"In addition, it has one of the most efficient distribution and payment systems in the world," Harsh said. He noted that Sweden was a good DM market for sportswear, books, records, photographic equipment, games and cosmetics.
As for other Baltic areas, prospects are not that rosy. True, St. Petersburg is Russia's window to the west and has better growth prospects than the rest of the country. But given the current financial crisis that's not saying much.
But if and when Russia recovers, and provided it does not fall back into a command economy, the western "window" will again look like a viable market for western consumer goods with the "made in the US" label much in demand.
Poland probably has the best economy in Eastern Europe and the largest population. Lithuania, Latvia and Estonia are more advanced than Russia, but still poor. Phone service is sketchy but the new telephony being put in is state of the art, leapfrogging over copper wires.
Still, more and more European DM companies are looking at the prospects of a Baltic market that could be served from a Swedish center, a trend the Swedish government is trying hard to further.
Dan Brzokoupil, the former CEO for the Nordic countries of Yves Rocher, the French cosmetics cataloger, called the Baltic "one of Europe's most interesting growth areas."
He noted that "free-market ideology and lifestyle are being widely adopted" in those countries of the region that were once part of Soviet hegemony. Consumption and demand for consumer goods are up strongly, he noted.
"The mail order business has taken its first cautious steps in these nations and in the near future direct marketing trade will approach Scandinavian levels," he said.
Most important, perhaps, is the emergence of a new middle class with growing need for a wide range of consumer products, Brzokoupil said.
Clearly, the hope is that once the current economic turmoil has run its course, the Baltic can be served as a regional market from a single cockpit that allows room for both the commonalties and the differences of the basin.