Polish entrepreneurs are operating abroad with ever greater confidence, pointing out that they are able to gain higher margins there, according to a survey carried out by The Citi Handlowy Leopold Kronenberg Foundation. This is why none of the surveyed companies intend to give up on or scale back their operations beyond the country's borders, and 84% plan to enter new markets. Among the obstacles to doing business abroad, the most frequently mentioned in the responses are strong competition (25%) and bureaucracy (17%); less frequently, differences in exchange rates and cultural barriers (10% and 9% respectively). Over 60% of firms are not afraid of Brexit.
Polish firms most often operate on the German (74%) and French (43%) markets, but there is also considerable interest in Italy, the Czech Republic, and Britain (37%). Nevertheless, Germany is still the country which for nearly half of the respondents (48%) generates the highest profits, followed by Russia (8%).
"Polish companies are not afraid to expand the area of their operations, but the vast majority of them (79%) think that it precisely in foreign markets that they have to meet more demanding customer expectations," says Piotr Kosno, Managing Director, Department of Strategic Clients at Citi Handlowy. "Although having a presence in markets other than Poland demands commitment, according to the statements of the majority (73%) of those surveyed, it is definitely more profitable, which definitely encourages companies to be more active. As many as 84% of them want to expand their operations to new markets in the coming years," he adds.
Higher profitability abroad is enjoyed primarily by production and trade firms (73% and 72% respectively), and less often by service firms. The reason for greater profitability is mainly higher margins (48%) and greater demand (46%) for goods and services offered. This second factor is more often stressed by those who generate more than 50% of their turnover abroad in a larger number of countries.
"Already for the third time we are researching the factors behind the success of Polish firms operating on international markets. We are observing this from various perspectives and we see that they are becoming increasing competitive from year to year," emphasizes Krzysztof Kaczmar, President of The Citi Handlowy Leopold Kronenberg Foundation.
The sectors most appreciated by foreign customers are food (38%), construction (21%), and furniture (18%). Over half (55%) of the surveyed firms think that Polish products stand out in terms of quality, while 40% point above all to their competitive prices. The quality of Polish export goods is appreciated by 78% of companies who think that Polish customers are more demanding.The biggest barrier for Polish companies in the context of sales on foreign markets is strong competition (25%) and bureaucracy (17%). But companies look at these questions differently depending on their turnover. For smaller firms (7 - 15 mlnzl) the main problem is competition (31%), while for bigger ones it is bureaucracy (22%).
As many as 62% of Polish entrepreneurs operating on foreign markets are not afraid of Brexit. Not surprisingly, this percentage is somewhatsmaller among firms selling in the UK (58%), but it increases with the number of countries in which a company operates (65% over 6 countries). What do firms worried about Brexit fear? First of all, a reduced flow of goods and services, unfavorable differences in exchange rates, and an increase in tariffs. All of these factors can have a significant impact on the cost of their business activities.
The survey was conducted in August 2016 among a sample of 300 entrepreneurs actively conducting sales activities abroad. Reports from all editions of the survey are available at: http://www.citibank.pl/poland/kronenberg/polish/10199.htm
