As an e-commerce company, expanding your business to the European continent with its varied languages and different cultural norms is an intriguing possibility. Although a full-fledged expansion into the European market can be daunting, starting in the Netherlands—a country with sound economic fundamentals, customers who are ready to spend, and one of the best e-commerce readiness levels in the world—can be a winning strategy.
There are more than 17 million people living in the Netherlands. For a country the size of Maryland, that’s a lot of people to reach with your e-commerce goods. The International Monetary Fund calculated that the Dutch gross domestic product grew by 2.8% in 2018—a year that also saw record-low unemployment at 3.8%. When compared to other Eurozone countries, the Netherlands is performing well above average, so now is the perfect time for your business to take advantage of this trend.
Considered a high-income country by the World Bank, the Netherlands is ranked 36 on the Ease of Doing business scale and No. 1 when it comes to trading across borders. With a little strategic planning and a deeper understanding of the available opportunities in the region, the Netherlands could become the cornerstone of your European expansion strategy.
The Netherlands Enterprise Agency lists nine key sectors as the pillars of the Dutch economy:
- Agriculture and food production
- Creative industries
- High technology
- Horticulture and starting materials
- Life sciences and health care
Plus, there is significant crossover between these industries. For instance, Dutch companies excelling in high-tech development can share their expertise and best practices with the healthcare sector and energy producers. The Netherlands’ logistics strength is especially robust given its well-oiled transportation networks that could help you move goods outward to the rest of Europe once a strong Dutch presence has been established.
Dutch customers are tech-savvy and ready to shop across borders: In its recent rankings of 151 countries’ readiness for e-commerce, the United Nations Conference on Trade and Development ranked the Netherlands No. 1—the first time it has topped the list.
Explaining the ranking, the UNCTAD pointed to unequivocal fundamentals driving the Dutch e-commerce market. Perhaps most importantly, more than three-quarters of people 15 years and older shop online. This 76% e-commerce adoption in a nation of 17 million means you have a huge potential audience waiting to purchase your products. What’s more, nearly 9 in every 10 Dutch people over the age of 12 use smartphones, which means mobile-friendly e-commerce merchants are in high demand.
One important factor to consider when it comes to getting Dutch shoppers to click “buy,” is your e-commerce payment platforms. The iDeal system, powered by Dutch banks, is the top payment choice in the country, so you may benefit from changing your payment options to fit the local norms. In fact, more than one-half of all e-commerce transactions are paid with iDeal, much higher than the 12% using credit cards.
Besides streamlining your payment processes, create competitive shipping options for your Dutch customers by lowering delivery prices and keeping the shipping timeline reasonable. Standard delivery in-country takes between two and three days; consumers have increasingly come to expect that their packages will be fully trackable while in transit.
Your e-commerce business will be in good company as an importer to the Netherlands. According to the Department of Commerce (DOC), companies in the U.S. do a lot of business in the Dutch e-commerce space, with the U.S. coming in fourth place for cross-border spending, trailing China, Germany, and the U.K.
Your most formidable competitor for the attention of Dutch shoppers will likely come from within the European Union, due to the EU’s frictionless trade initiatives. If the U.K.’s still-pending departure from the EU makes British trade with the Netherlands more difficult, the relative appeal of U.S. and other overseas merchants could increase.
Learn How the Dutch Do Business
If your business is ready to find partners in the Netherlands, it’s time to brush up on international commercial etiquette. Fortunately, the practices included in the Department of Commerce’s guide to Dutch business are not very challenging for American retailers.
However, one of the top pitfalls to bear in mind is formality: Your written correspondence shouldn’t be too casual, and neither should your conversation. It’s best to wait until you’ve built strong bonds with any Dutch business partner before you start using first names. More importantly, courtesy and prompt responses are essential to getting along with your Dutch contacts.
If negotiations proceed at a rapid pace between your company and your counterparts in the Netherlands, it will likely be the result of punctual and attentive planning rather than last-minute changes. Be efficient and courteous towards your Dutch contacts by scheduling meetings and other interactions a week or more in advance. If you’re going to be late or must postpone the meeting, inform them ASAP rather than trying to cancel on the fly.
Also, be aware of the Dutch holiday season. Christmas vacations are common in the Netherlands, so a trip in December may not be fruitful. The same goes for July and August. Dutch executives generally take time off during those months, so be aware before scheduling summer meetings.