In eppi magazine No. 119, the first part of a two-part country report on the Dutch promotional products market is being published. The flat country in Western Europe is where the biggest European promotional products players are located. It offers an innovative, diversified and internationallyoriented industry and a dynamic, open business culture. Welkom in Nederland!
Waterways and windmills, bikes and Bitterballen, King and clogs, cheese, caravans and coffee shops: There are many clichés about the Netherlands, but none of these stereotypes applies universally. However, the significance of the small country in Western Europe as an international trading nation is undisputed. The Dutch look back on a long history as traders – already in the 17th Century, the so-called “Golden Era”, the country played a pioneering role in the international trade. Goods from the colonies brought immeasurable wealth, boosted by innovative business models: For example, the United East India Company (VOC), an alliance between several merchants, was the first company that financed itself by issuing shares, which furthermore were traded on the Amsterdam exchange for the first time. Already at this early point in time, Dutch market capitalism especially gained a foothold in the trade, transport and finance sectors – this is still the case today. “We are a nation of traders, of importers and exporters, it lies in the roots of our history and is ingrained in our mentality,” stated Stef van der Velde, CEO of Giving Europe (see portrait). For Martijn Verwaal, General Manager of PSL (see portrait), it is “no coincidence that the biggest importers from the European industry are based in the Netherlands, it is indeed the result of commercial talent and entrepreneurial spirit.” Whereby goods are indeed produced in the country between Belgium and Germany: There are considerable natural gas reserves and a significant chemical industry, after the USA the Netherlands is the second largest exporter of agricultural food products in the world and in 2016 machines and machine parts were the main export product of the Netherlands. Nevertheless, the importance of the production in the overall economy review is comparably small. “We don’t have a production industry to the extent that other countries do, for instance countries with a large automobile industry,” said Robin Vogel, owner and CEO of the Buttonboss Group (see portrait). “We are primarily traders, but we are very good at it.” That good that the Netherlands – a country with only just over 17 mil. inhabitants – is the fifth largest exporter of goods worldwide.
Innovation and logistics
The small country is frequently underestimated when it comes down to innovation and technology – unjustly as many examples corroborate: The leading role of the Dutch engineers and technicians in the hydraulic engineering and land reclamation sectors is almost proverbial – and practically essential. Creative directors in the fields of architecture, fashion and design also play at the top of the league – the latter can be directly observed in the promotional products industry. Furthermore, the Dutch are the worldwide leaders in developing computer games and can quite rightly be referred to as digitalisation pioneers. The country lies in 2nd place in the digital index of the European Commission behind Denmark. In several subsidiaries of the supermarket chain Albert Hejn, goods are directly scanned with a hand scanner or a smartphone once they are taken off the shelf and are paid for at a machine – which does away with waiting in queues. In 2014, ÖPNV completely did away with paper tickets in favour of chip cards and the Dutch are also world champions in web shopping: According to a survey by the Ecommerce Foundation in 2016, 12.9 mil. Dutch people made online purchases – preferably via domestic platforms such as Wehkamp.nl, Bol.com or Thuisbezorgd.nl. Giants like Amazon or eBay, who play a dominating role elsewhere, don’t even make it under the top 10 of the most popular online shops. “In the eCommerce area, the market leaders in nearly all segments are Dutch companies – apart from Zalando no European big player has been able to gain a strong foothold here big-scale,” reported Edwin Kats, Pinkcube (see portrait). “That is an indication of the fact that the level of development of the digital technologies and the corresponding strategies is very high in this country.” Last, but not least logistics is also a fast growing business which the country in Central Europe flourishes with. As a result of its geographical position and the traditional close global relationships and thanks to exemplary transport technologies, the Netherlands is a hub for the international movement of goods. With around 460 mil. tonnes of goods being traded here annually, the Rotterdam harbour is the largest in Europe and the eighth largest in the world, Schiphol Airport in Amsterdam ranks fifth European- wide in terms of cargo handling. The routes are short within the country. Already in the 18th Century, the Netherlands was one of the most strongly urbanised countries in Europe, the Randstad – i.e. the congested urban area and the economic centre around the cities Amsterdam, Rotterdam, The Hague and Utrecht – is not only more or less one big city region because of its name. In addition to the efficient infrastructure, a high degree of openness towards international companies prevails, with favourable legal framework conditions – an open-minded tax legislation – as well as company-friendly approval procedures. Commercial real estate is favourably-priced.
Suppliers and distributors from other European countries highly appreciate their Dutch business partners because of the simple communications due to the fact that they speak several languages and because of their friendly and uncomplicated nature and high flexibility. “We are pragmatic. If a problem arises, we solve it along the way and in a very result-oriented way.” explained Vogel. “That is partly what strongly differentiates us from our colleagues in other countries.” Compared to their Dutch counterparts the latter sometimes come across as being slow, inflexible or dogmatic. The business culture in the Netherlands may thus initially appear to be unusual to their European neighbours – also, because flatter hierarchies prevail compared to many of the other markets. In a country that is very proud of its liberal, egalitarian society, all of the employees are frequently involved in the every business routine – the opinion of the secretary counts just as much as that of the CEO. “There is a pronounced discussion and consensus culture,” confirmed Pieter Bohnekamp, Vice President Sales at PF Concept (see portrait). “Everyone puts forward his opinion and a topic is examined from all sides. Hence, the decision-making process can take a long time. But the execution is then fully supported and goes fast.” At the same time an open climate prevails – among the colleagues, but among the market players in particular. Vogel: “We are all open with each other, even rival companies engage in a lively exchange about the market or about their business practices, the industry is very transparent.“ Van der Velde confirmed: “The Dutch are more open than many of our European colleagues. There is not such a friendly and open contact between the distributors and the suppliers or within the market segments as here anywhere else. For example, Giving Europe regularly invites distributor partners to round table meetings, where we unbiasedly discuss themes such as sales structures or internet strategies. We share information and help each other – that is the way it should be everywhere.” In the face of the high market transparency and networking it is not surprising that the Dutch promotional products industry is so well-structured and well-organised: The country has an active association, the PPP (Platform Promotion Products) with a high number of members, (see the interview with the President Edwin Bouman on the following pages), the publishing company Het Portaal Uitgevers not only publishes highreach magazines (PromZ, PromZ Vak), but also organises the PromZ.live and Leveranciersdagen – a cooperation with the PPP – two of the well-established industry trade shows.
Small country, big market
As in the other countries, there are no reliable figures on the size of the Dutch market. “One of the most urgent tasks of our industry is to determine reliable market data,” said Van der Velde. Based on conservative estimations the PPP assesses the annual turnover of the Dutch industry to be between 1 and 1.5 bil. Euros – considering the size of the country this is a considerable volume. “We are a small country with a big market,” ascertained Verwaal. “Although we only have a population of 17 million we have an estimated 1,500 to 2,000 promotional products companies – obviously there is high demand for haptic advertising.” Also in areas that have a much lower significance in other parts of Europe: For instance, the Christmas business in the Netherlands is a huge revenue driver. A whole branch of business exists for the Christmas gifts for employees and business customers – the so-called Kerstpakketten – with turnovers in the millions, own specialists and trade fairs. Apart from such specific characteristics, similar trends can be observed in the Netherlands as in other countries: “A consolidation is taking place among the distributors, with big fullservice providers who serve multi-national customers on the one hand and small, innovative online specialists on the other. At the same time there is still a host of smaller, more traditional and regionally-oriented distributors, who have a stable position on the market and who have a strong, local function,” stated Vogel. Consolidation and decentralisation lead to friction and increase the pressure, as Verwaal added: “The market is strongly fragmented and there is intense competition.” Nevertheless: After years of economic downturn, the Dutch economy and thus also the market for haptic advertising is moving forward again. Whereas the GDP was on the decline or had stagnated since 2009, since the end of 2014 it has been growing continually again. In the period between 2015 and 2017, the annual growth was more than 2% in comparison to the previous year. Vogel: “During the years of the crisis, we focused strongly on export. However, since 2015 the Dutch economy has been picking up and we have also experienced gains on the domestic market. The mood on the Dutch market is good at the moment.” So the outlook is good for everyone, who wants to enter the Dutch business – however the entry should be well-planned. “In order to survive on our market one has to position oneself well, find a niche sector or provide USPs,” recommended Verwaal. Merely relying on clichés is not very useful here – it is necessary to study the market conditions in-depth.
// Till Barth
photos: Interall Group (1); iStockphoto (6); Shutterstock (7); Thinkstock (1)