Mature markets: Switzerland generates three out of four export francs there
Mature markets such as Europe, the USA and Japan are essential for the Swiss export industry. A new study by Switzerland Global Enterprise (S-GE) and Credit Suisse shows that highly developed industrialized countries are the engine of Swiss foreign trade.
Even though a large part of the basic demand for goods and services in mature markets is already covered, Swiss exporters position themselves in profitable niches in these countries. Switzerland earns around three out of every four export francs in mature markets. These are also the main drivers of growth in foreign trade. Since the global economic crisis in 2009, two-thirds of export growth has been attributable to mature markets.
Eurozone by far the most important trading partner
Switzerland's most important trading partner by far is the eurozone. Exports to these countries account for almost half of the volume of foreign trade. This is all the more remarkable because the eurozone was still in a slump after the global economic crisis. "Cultural and geographical proximity, as well as privileged market access, make exports to the euro countries attractive. Moreover, they have established themselves as good entry markets for export beginners," comments Daniel Küng, CEO of Switzerland Global Enterprise. In terms of export volume, the USA follows in second place with 16 %, Japan and Canada account for 3.3 % and 1.6 % of total exports respectively.
Mature markets as a backstop for internationalization
However, exporting to mature markets also involves challenges that exporters often underestimate due to cultural proximity. For example, they have to take local regulations into account, adapt business models to the target country and convince with outstanding innovative strength in order to prevail against strong competition. In addition, there are an increasing number of trade hurdles as well as political uncertainties such as Brexit or the still unclear future of Swiss relations with the EU. "Exporting to mature markets is no Sunday stroll. However, it often forms the business basis for opening up emerging markets with higher growth rates," says Daniel Küng.
Growth continues
Swiss exports to mature markets are likely to continue to grow in the coming years - above all to Germany. However, there is also great growth potential in other countries such as Canada. Although the North American country does not play a major role in the statistics at present, if the growth trend continues, Canada is likely to become increasingly important for the Swiss export industry. In the last 20 years alone, goods exports to Canada have risen by an average of 7.5 % per year.
The high level of prosperity in the mature markets also ensures that demand for Swiss luxury goods will continue, which will support exports from the watch industry, among others. In addition, demographic developments in Japan are opening up new business opportunities for the chemical and pharmaceutical industries.
About the study
The study by Switzerland Global Enterprise was produced in collaboration with Credit Suisse and looks at the five markets of Germany, the USA, France, Canada and Japan. It highlights the economic relations between Switzerland and the respective country, the development of export business, and the potential for the various industries. These facts on foreign trade are supplemented with practical tips on how Swiss SMEs can successfully tap into the respective target market and expand their business locally. The study confirms and deepens the annual ranking of the Top export marketswhich S-GE compiles together with the Swiss Institute for Business Cycle Research (KOF) of the ETH Zurich.
