Entering the Spanish Market: Your Step-by-Step Guide
Episode 38. Start Global Insights – podcast for exporters.
What associations do you have with Spain?
Don Quixote? Paella? Conquistadors? Christopher Columbus (I know, I know, he’s Italian)? Sagrada Familia? After a recent interview with a local expert, Pedro Jara, who has more than 30 years of experience in retail and consultancy on the Spanish market, my main association is that it is almost 48 million consumers.
Spain, with its rich cultural heritage and developed economy, is a highly attractive market for businesses looking to expand internationally. This guide based on the interview with Pedro explores the key considerations for entering the Spanish market, from understanding its diverse regions to navigating the business culture.
Listen to the full episode at Spotify, Google and Apple Podcasts and YouTube.
Economic Strength and Diverse Regions
One of the key points to consider when entering the Spanish market is its regional diversity. Spain is made up of 17 autonomous regions with varying degrees of autonomy and cultural differences, with two main hubs in Barcelona and Madrid. The official language in Spain is Castilian Spanish, which is spoken by all citizens. However, some autonomous regions have their own co-official language in addition to Spanish. The Catalan language is spoken in Catalonia, Galician in Galicia, and Basque in the Basque Country and part of Navarre.
The Spanish market has shown steady growth in recent years after a difficult period in COVID. Which together with political stability, increases its attractiveness for foreign businesses.
Don’t Forget the Tourists
Millions of tourists visit Spain every year. According to 2023 data, the number of tourists was 85 million, which is almost twice as much as the local population. This means that many people with different tastes are looking for something to buy. Therefore, in addition to local consumers, it is worth researching and understanding the needs of tourists.
Spanish market retail and search for contacts of chains representatives.
Basically, the Spanish market is represented by large chains such as the Spanish Mercadona, the French Carrefour, and the German Lidl. However, there are still many small private shops and markets in small towns that can also be your sales and testing channel in the Spanish market. The main place to find the right contacts in networks and distributors is still industry exhibitions. For example, Alimentaria in Barcelona, and Salón Gourmets in Madrid. The first is more for retailers, and the second for HORECA.
Cold calling also still works, but the conversion rate is quite low, you need to contact many to get a conscious conversation with a few. One strategy to improve conversion rates is to send a concise introductory message via WhatsApp or LinkedIn before calling, which, according to Pedro, slightly increases conversion.
Cultural nuances and building trust in the Spanish market
Spanish business culture is built on strong personal relationships and trust. Personal eye contact is very important. The pandemic has somewhat changed the situation and accustomed to video calls, however, if possible, an offline visit will be a good opportunity to establish long-term relationships.
There is a stereotype that Spaniards are lazy and slow and the famous “mañana” (which means “tomorrow”), however, this is mostly since during the day, especially in the southern regions, the temperature did not allow you to work efficiently. Therefore, most Spaniards started the working day very early, finished late, and in the middle took a break for a siesta to wait out the heat. Today, most office spaces are equipped with air conditioning, and young people are increasingly abandoning the traditional afternoon rest.
The statistics says that only 30% of local managers are fluent in English. The situation changes, but it looks like that it’s better to have someone Spanish speaking to enter the country more efficiently.
Cooperation with the state in the Spanish market
According to Pedro, it is very easy to do business with the state and this can be a great opportunity to enter the Spanish market. There are special tender platforms where you can apply for a tender transparently. For example, Plataforma de Contratación del Sector Público.
Local government support programs can also be an entry point for a foreign company.
Spain as a gateway to the markets of Latin America and Portugal
Spain’s historical and cultural ties to Latin America make it a gateway to access these markets. Once you start selling to Spain, the next step in your export strategy can be LATAM markets with the help of Spanish partners with whom you have already established strong relationships.
The proximity and strong economic relationship with Portugal also offer additional potential.
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Conclusion
The Spanish market can become very interesting for exporters. By thoroughly researching the local business climate, regional differences, consumer needs and cultural nuances, you will discover not only access to 47 million potential local customers and 85 million tourists, but also to millions of markets in Portugal and Latin America. So, Que tengas un buen viaje a España.
