16-12-2011

Undiscovered Territory for Baltic Exporters
- Austria

Austria is unrivaled specialist for Eastern and Central Europe. Austria's long tradition with its neighbors to the east has led to a common mindset and many years of experience in doing business together. Until the end of the imperial reign dominating the region in the early years of the 20th century, Hungary, Slovakia, the Czech Republic as well as parts of today's Poland, Romania and Croatia belonged to the unified Austro-Hungarian Empire with its main capital - Vienna.

Doing business in Eastern and Central Europe comes naturally to Austrians. They've been doing it for centuries! Why not to use know-how of Austrians and set-up export platform there for Balkan, Eastern and Central European markets.

Lithuania – ahead of the other Baltic states

Statistics show that export value from Baltic states in all the categories appears to be rather small. If summed together the Baltic imports in Austria amounts to 1.01% of the total imports.

The main product groups exported are chemical products, machinery / vehicles and other finished goods. However, Lithuania is a forerunner in all these categories drawing up a half of the total exports from Baltics.

Industries of Austrians' Interest

Automotive market is open for competitive suppliers

Austrian companies in the automotive market are very international orientated and open to sourcing. In order to stay competitive with suppliers from low cost markets, companies in the automotive industry in Austria are constantly looking for new innovations and means of reducing operating cost.

In order to successfully enter the market in Austria, products need to be innovative, reliable and cost effective. High technology innovation and processes are of particular interest for Austrian companies. Currently several companies and institutions are engaged in researching electronic cars. Therefore Austrian companies are currently seeking innovative partners in this sector.

According to Austrian statistics department the largest part of import comes from machinery/vehicles import. Total import of Austria in 2010 comprised 113,6 billion EUR, while 36,96 billion EUR came from machinery/vehicles import with Germany being at the forefront in the segment (export 15,69 billion EUR in 2010 to Austria). Also in this category Lithuania is on the top of the Baltic countries with 0,94 billion EUR export followed by Estonia 0,68 billion EUR and Latvia 0,36 billion EUR.

Food lovers - Growth in Frozen food stuff

Austrians recently have been showing interest into foreign foods. Thus there is a potential for specialist foods, ethnic flavors and convenience foods. There is also reported a growth in a frozen food market and private label products.

Austria imported food in 2010 for the value of 6,67 billion EUR, again the major trade partner being Germany (2,81 billion EUR). Food export to Austria from Lithuania in 2010 totaled to 0,9 billion EUR, Latvia 0,1 billion EUR, Estonia 0,16 billion EUR.

Design and fashion

Austria's new generation is catching up on the style front and now they can't wait to look fantastic and feel good about new trends. As the demand for German and Italian goods decline, other countries can step in.

Household goods

Gardening equipment and pet care products becoming more popular with Austrians to turn their gardens into their own havens while enjoying their leisure time with their pets, and who can blame them. Sounds like a very blissful way to spend leisure time and money. So this is a segment with potential to accept new offerings. Austria can be also considered as a pilot market for Germany, as generally Austria is 10% of the German market, in the same time having similar consumer patterns and distribution set-up.

Logistics hub

Austria seems to be attractive also in terms of logistics hub. To name few advantages: Vienna's optimal connections to all transportation carriers; Vienna International Airport's positioning as the perfect East-West hub; The superb rail and highway network connections to Eastern Europe; Vienna's unique infrastructure supporting warehouse space. These facts set ground for logistics and transport service partnerships, and creates valuable business opportunities as number of international companies choosing Vienna as CEE headquarters is growing.

A opportunity for Baltic producers

Baltic producer is not always able to meet the demand of the large neighboring market - Germany, but Austria with over 8 million population seem to be the perfect trade partner for Baltic countries, as the Baltic producers could easily fulfill the demand with current capacities.

Author: Uldis Kalnins - Project consultant in Austria, Charts Dovile Buskeviciute, GatewayBaltic