May 21, 2024 • 36 mins
In this episode we will discuss one of the largest markets of Europe with almost 47 million of consumers.
The guest of the show is Pedro Jara, an independent consultant from Spain with over three decades of expertise in retail and business consulting. Pedro brings a wealth of knowledge from his experience in management roles within large retail chains, his work in trade with the Extremadura government, and his support for businesses entering the Spanish market.
Episode Highlights:
- An overview of Spain's economic health and political stability
- Insights into Spain's regional differences.
- Strategies for international food producers to penetrate the Spanish retail market.
- The significance of Spain as a tourist hotspot and its impact on consumer markets.
- Practical advice on navigating the retail landscape and contacting potential buyers.
- The cultural nuances of Spanish business negotiations and the importance of building personal relationships and trust.
- Debunking the 'mañana' stereotype.
- Guidance on engaging with government tenders and leveraging local government support for market entry.
- The potential of using Spain as a gateway to Latin American markets and the close ties with neighboring Portugal.
LinkedIn profiles:
Host, Dmytro Shvets https://www.linkedin.com/in/dshvets/
Guest, Pedro Jara https://www.linkedin.com/in/pedro-jara-94014839/
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The URL's mentioned in the interview:
Plataforma de Contratación del Estado
https://contrataciondelestado.es/
Extremadura Avante
https://www.extremaduraavante.es/
Asturex
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I'm Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
from different countries about local business secrets and international expansion experience.
In this episode, we will discuss one of the largest markets of Europe with almost 47 millions
of consumers.
Funny beaches, tasty Mediterranean diet, pleasant people, fiestas and siestas – that is what
comes to mind when thinking about Spain.
(00:33):
And to dive deeper into the Spanish business culture, we definitely need a local expert.
So, I have a pleasure to introduce my today's guest Pedro Jara, an independent consultant
from Spain with more than 30 years of experience in retail and business consulting.
During these years, Pedro was working on management positions in large retail chains, developed
(00:56):
internal and international trade with governmental organization of Spanish region Extremadura,
helped businesses to enter Spanish markets and assisted local companies in their internationalization.
Currently, he is running his own consulting business, helping companies in their cross-border
activities.
Hi, Pedro, and welcome to the show.
(01:17):
Hi, thank you, Dmytro.
Thank you very much for inviting me to your podcast.
To start with, I would like to ask you, Pedro, to give your personal opinion, kind of a short
overview of the current situation in the Spanish economy.
The Spanish economy is going pretty well in the last year, especially after the COVID,
(01:39):
because we had a very hard time.
It was the same in Spain and in the rest of the countries in the world.
But unfortunately, I think our economy is growing up pretty well and that makes it easier
for any company who wants to come here to make businesses because, well, I think it's
(02:03):
a good moment now.
We have a political stability and the economy is also very balanced at this moment.
Great, great to hear that.
Pedro, I was reading the reviews of the Spanish economy and how to do business with Spain.
There are a lot of reports about that because Spain is one of the biggest countries in the
(02:28):
European Union and it is very much attractive for foreign businesses.
According to the US Department of Commerce International Trade Administration, there
are 17 autonomous communities in Spain with varying degrees of autonomy and cultural identity,
with like two major hubs in Madrid and Barcelona.
(02:55):
How do you assess that?
How different is Spain and what you should consider while entering the country in this
term?
Well, the population in Spain is about 47 or 48 millions of which urban population is
about 81% and rural population is around 18%.
(03:18):
And, well, when looking to delve into the Spanish market, it's essential to comprehend
that the autonomy of the country.
As you say, Spain is composed of 17 distinct autonomous regions, each of its own government,
regulations and laws.
(03:39):
These regions have an ample amount of power and sovereignty over their respective areas.
It is the reality.
So it is vital to be aware to the local status and regulations before initiating business
in Spain.
That is very important.
There are different customs and different ways of making businesses.
(04:03):
Even the characters are different.
How do they differ in terms of industries?
Are there some peculiarities like some of them are more to agricultural direction, some
of them are more to industrial?
Let's say that perhaps Madrid and Barcelona could be the primary economic hubs, one of
the most agents, distributions, foreign subsidiaries.
(04:26):
Perhaps we could divide Spain in that way.
Perhaps the north is a bit more industrial and perhaps the south is more agricultural
sector.
Very simple, but perhaps could clarify for someone who wants to know how the economy
works here in Spain.
So let's assume that, for example, Ukrainian producer of some food product with some value
(04:49):
at willing to enter Spain.
What kind of roadmap would you suggest for them to keep in mind?
It's not really the map, but it's more how the retailers are working here in Spain.
We have some different retailers that have a big share of market, such as perhaps Mercadona.
(05:15):
Perhaps you know it.
It's one of the main operators here in Spain, they are Spanish, completely Spanish.
And the share they have is about 20% of the market.
So it's a very important operator here in Spain.
(05:35):
And I could name also to Carrefour.
Carrefour, you know, is a French company.
They are mostly hypermarkets and they have a presence also in the whole of Spain.
Dia and Lidl, Lidl as you know, is a German company and is, let's say, a low-cost company.
(05:58):
And they are growing very fast here in Spain.
So if someone from Ukraine wants to come to Spain and they want to get introduced into
the retail market, I think perhaps the more, the more direct it should be to go directly
to these companies because they have the most market.
(06:21):
On the other hand, we have to know that Spain is a very touristic place.
Perhaps, I don't know if it's the second or the third country in the world on the touristic
sector.
But I think it's something to bear in mind as well because we receive around 81 million
visitors each year.
(06:43):
That means that Spain is not only the current population, which as I said, it was around
45 or 47 citizens.
But it's very important to know that every year 81 million visitors come to Spain.
Also the visitors concentrate perhaps on the coast, the south of Spain and the Lucia coast.
(07:08):
Also Levante, Levante means Valencia, Barcelona, Costa Brava, because in Barcelona it's Costa
Brava.
But also the north of Spain.
The north of Spain is one year after another chosen by many of the visitors.
The north of Spain is the green side of Spain because even the weather has nothing to do
(07:32):
with the rest of Spain because it's much more wet, more rainy.
But the same Chinese is more green and the landscape is spectacular.
Do I understand correctly that the most part of the retail market is represented by these
large networks, like large retail networks that you mentioned, and you should not consider
(07:59):
too much the small shops or local stores near the houses or something like that?
No, no, no.
On the contrary, the small shops have also a very huge presence in Spain.
So the small market still has a big presence in Spain, mainly in the rural area.
(08:26):
I think it's very important to know that to come to Spain and to know the local market
is very important to contact with distributors, importers who know how it works, the retail
in Spain, the local market, the big retailers.
From your experience, and I know that you have been working quite a lot with retail,
(08:50):
what is the way to find these distributors and to establish this first contact?
How would you suggest to do that for the newcomers to the market?
I think, in my opinion, my own experience, because as you say, I've been in charge of
some different companies, purchasing department, I think face to face meetings with local business
(09:18):
representatives are very, very important.
The global pandemic has forced everyone to adapt to virtual realities.
That is what is happening.
But I think here in Spain, we still expect a personal relationship with suppliers and
partners.
So it can be challenging to initial communication by phone or email.
(09:42):
And to me, perhaps the more effective is perhaps going to different exhibitions.
We have a huge, very important exhibition, not only in Spain, but also in Europe, such,
for instance, Alimentaria.
Alimentaria in Barcelona is perhaps one of the biggest food exhibitions in Europe.
(10:04):
So many, many importers and also the persons in charge of purchasing in the big retail
companies attend to this exhibition every two years because this exhibition, Alimentaria,
takes place in Barcelona every two years.
(10:24):
And also there is another Alimentaria, as I say, is in Barcelona.
And there is another Gourmet, Gourmet is another exhibition that takes place in Madrid.
This is every year, Alimentaria every two years.
Gourmet in Madrid is every year, around April, more or less.
(10:47):
And I think the difference between these two exhibitions is that perhaps Gourmet is more
for, perhaps in Rome, but it's my perception, you know, is that Gourmet perhaps is more
for the touristic sector and perhaps more for restaurants, perhaps more for, not so
(11:08):
much for retail.
Clear.
But Pedro, from my experience, when you are taking part in an exhibition, even if you
are not just a visitor, but you have a stand there, a booth there, it is not always very
efficient if you did not prepare in advance.
So if you are going to the trade show, you need to agree on meetings beforehand, contact
(11:31):
the potential buyers from distributors or category managers from retail chains, and
then have this trade show as a meeting point with them.
And in these terms, again, according to your experience, is it true for Spain or not?
And if it is true, then how to get in contact with these buyers beforehand?
(11:52):
Is it possible to do via LinkedIn, for example, or via cold calls to these potential customers?
Yes, this works like in any other country.
I think we are in the 21st century and I think we have enough tools to contact previously
before going to an exhibition because we have, as you say, you have LinkedIn, we can make
(12:18):
cold calls, we can send emails, there are many ways to contact previously before going
to an exhibition.
You have also, every year, the exhibition organization, they usually edit a list of
previous customers and also visitors, exhibitors, where you can find a huge list of potential
(12:45):
customers that you can't contact previously.
Of course, always before going to an exhibition, it's very important to prepare it.
Just you want to make it in an efficient way because if you don't do that, you are making
a cold waiting, just as you say, standing in the stand and waiting who is coming spontaneously.
(13:11):
So sometimes it works, but I think you know that having a half stand in an exhibition
is very expensive and if you want to spend properly your money, you have to work previously.
If you don't do that, perhaps it's not so good as you expect.
(13:32):
How open are these potential partners to just talking to you via phone, for example, if
you are just calling them or responding to emails?
What is the most effective way to get to these decision makers in distributors or retail
chains?
You know that cold calls are not always easy.
(13:55):
That's why they are called cold calls.
You are calling to someone that you don't know previously.
Most of the times they don't expect you are there.
You are going to call them.
Sometimes they are not so interested in your product or perhaps they are simply in a bad
day.
(14:15):
They are not in the mood to speak with someone who they don't know.
That is the commercial job, the commercial work, because at the end you have to call
perhaps 50 just to have success with perhaps one or two.
But this is in any other country, this is nothing special with Spain.
(14:37):
This is the word that someone who is in the market world has to know.
Again from your experience, how would you make these cold calls a bit warmer?
Perhaps like for example, I have experience with other countries when we were using trade
associations, local trade associations or retail associations or maybe some local agents
(15:04):
that have access to these potential decision makers.
With introduction, for example, in the Gulf region without an intro, it is highly complicated
to get to the person.
So you need somebody that knows somebody that will introduce you to this person.
This culture of personal relationship is highly developed.
(15:27):
How it is in Spain?
Do you need to have this introduction from other more senior persons or some other organizations
or perhaps from the consular workers from the embassy of the country that is entering
or something like that?
I will tell you how I do.
I don't know if this is how other people in Spain do it.
(15:52):
But what I do, I use very much for instance, WhatsApp before calling.
I prefer just to get in contact with a different tool that is not the cold call.
But before I prefer if it's possible and I go to the mobile phone, it's just to write
before to say who I am, what I am doing, I can offer.
(16:15):
And then I ask properly if they would like to have a conversation, they would like to
have a video conference.
When you write by WhatsApp, Telegram or any other tool we have nowadays, they perhaps
won't read it at the moment.
They think, oh, it's not interesting.
But the message is there.
(16:36):
So perhaps later they read it again.
Perhaps they could think, well, perhaps, perhaps could be interesting.
So that's how I do, but this is my experience.
And to me, it's pretty effective.
Not always work, of course, but I think we can do it.
We have another tools like LinkedIn or even sending an email.
(16:58):
But you know that our mailboxes are full of emails.
Everyone is writing to us or offering many products or services.
So sometimes we don't even open an email.
But I don't know why with WhatsApp or Telegram or these kind of tools, to me, it's more
(17:19):
easy.
Maybe it feels more personal, like it is dedicated to you and the person has done some job before.
You prepared your pitch, your small text, you investigated what is this person about,
what might be the interesting products for them.
So they feel it more personal for them.
And that's why they are more likely to respond through these messaging tools, not the email.
(17:44):
I think it's closer because it's not only that you are writing someone, but at the same
time you have a profile, you have a picture.
So it's something that is not the same, but it's similar.
When I said before, in Spain it's very important, still it's very important, meetings face to
face just to establish a link with the customer, with the supplier, it's because you see the
(18:10):
face of the person.
You see how he is, the feelings you get about that person.
At the end, I think the relationship in market is based on trust.
You need to trust on your supplier, you need to trust on your customer.
(18:31):
Of course, through LinkedIn you can see the profile, you can see the other person, the
customer or the supplier, what he does and how it works.
So we have many tools.
Fortunately, we are in the 21st century.
I remember when I was younger, it was much more difficult and you have to make a huge
(18:54):
effort to make businesses.
Nowadays, you are in Ukraine, I am in Spain, we can have a very good conversation and that
is something that the new technologies bring to us.
But we never have to lose the personal treatment.
(19:18):
The emotional perception of people is very important for Spanish people.
So you need to feel the person, how it behaves, how it smiles to you and how it reacts to
your words.
This empathy to the real person is more important than the words that you can read in the email
or presentation.
(19:39):
Perhaps because the way we are depends also on the weather.
You know that in Spain we have a very good weather, we are used to live in the street
to have personal relationships with our neighbors.
That's very important for us.
Clear, clear.
And talking about the business culture, if you already reach the person, you start the
(20:03):
conversation.
I also found a quote from Cultural Atlas that is saying that Spanish business are very hierarchical.
Communication generally occurs at the senior level, peer-to-peer.
And when addressing another person, you need to stick to titles, of course, like senora
or senora and then using the last name and communicate in a more formal way.
(20:30):
From my experience talking to Spanish people, it is not so much formal.
And I assume that this is more like an old stereotype, but maybe you can clear it up
a bit and say how it is in reality, how you should behave.
Perhaps 40 years ago it could be like that.
I cannot deny it.
But nowadays it's not exactly like that.
(20:53):
Nowadays the culture of the companies are much more democratic and it's not so hierarchical.
I think what every company looks for is efficiency.
So it doesn't matter who you speak to, because at the end what everyone is looking for is
(21:14):
just to give you a very good service.
And if the good service is given by someone in the bottom of the company, no problem.
The most important is that satisfying the customer.
But this is global, I think.
At least in Spain, I don't find that.
I don't see that you need to speak to the owner necessarily.
(21:39):
Sometimes, perhaps, every company is different, but in general, I don't feel it like that.
How open are Spanish people in negotiations?
Are there any kind of usual hidden agenda or you are direct and you can directly speak
what you are thinking about and discuss some business issues or you should be careful with
(22:01):
that?
I think you can go directly to the point.
Well, you know, I said we like to talk, we are talkative, you know, perhaps we always
like to start a conversation asking for your family, how are you doing, where have you
been on holidays?
And after 10 or 15 minutes, you go to the point.
(22:24):
Perhaps, perhaps, I don't know, not everyone is the same, of course, but you can find very
easily this kind of person, someone that, as I told you, we always look for the trust,
we like to know the person we are talking to.
So we like to know about them.
The way we make businesses is a bit like that.
(22:47):
We like to know the person and perhaps we don't know at the beginning, directly to the
point, always saying that depends on the company, depends on the person.
But we like that.
Some small talk about the personality and the background and then to the point.
Yes, about the situation in the country, about the weather, about the football, about…
(23:12):
And then after a moment, perhaps we start speaking about real business.
But it's not always like that, of course.
Perhaps it takes five minutes speaking about something is not the real issue of the meeting.
But we like to make this.
(23:34):
Clear.
So this is very important to have this personal relations with your potential partner in Spain
and establish this trust and make it long term.
Yes.
So this is not like one stop shop, but more like a building in a long term relationship.
Pedro, another very common and very often I meet this stereotype about Spanish people,
(23:59):
this mañana concept.
It's like not keeping to terms or not being very strict to the agenda and always answering
mañana, like it is not too urgent.
So you're very relaxed in business.
How true is that?
Well, that is part of the dark legend of the Spanish because many things perhaps we are
(24:26):
lazy because we like fiesta, most of all.
We walk a little and party a lot.
We need to sleep siesta in the afternoon to get going.
All of them are stereotypes.
The mañana, mañana, not today.
Well, the fact is that summer in Spain is very, very hot.
(24:47):
So if you want to work, perhaps not so much now, but in the previous year, if you want
to work from, for instance, two o'clock until seven o'clock in the afternoon, in summer
is impossible.
So what do we do?
We eat up very early and we go to bed very late at night because we try to profit the
(25:09):
fresh hours in the day.
So it's normal that in the medium hours, as I say, from perhaps two o'clock up to seven
o'clock, perhaps you have to see it in summer, but just in summer, not in winter.
So for a foreigner who comes here who are not used to make that, they say, oh, these
(25:29):
Spaniards are all very lazy because they go to bed in the day.
That is something we will never do.
So sometimes it's necessary to understand why and the reasons of the things.
So there are many stereotypes.
(25:49):
People think that perhaps for foreigners that we all like bullfights.
To tell the truth, there's not so many people who like bullfighting in the US.
Clear, clear.
You have also many years working for government.
So you have been working for Extremadura government in terms of trade relations.
(26:10):
How do you feel and how do you think from the perspective of exporter, how it is advisable
or not to work with government?
If you are supplying to governmental organizations or you are participating in some governmental
tenders, how would you advise to enter this type of market in Spain?
(26:32):
To tell the truth, I think working with the government in Spain is very easy.
As I told you, we have 17 communities in Spain and we have a central government in Madrid.
And I think the demo is just to go to a site.
It's called Plataforma de Contratación del Estado.
(26:55):
It's a government platform to contract with the government in Spain.
And you need to search about the whole government tenders.
And there you can find every tender published with all the conditions.
And it's very easy to access to a tender here in Spain.
(27:18):
Perhaps you have some requirements like to make an inscription in some time zone statements
or something.
But to tell the truth, it's very easy.
So remember, the site is called Plataforma de Contratación del Estado.
I repeat, Plataforma de Contratación del Estado.
(27:40):
Where you can find the whole information.
For the listeners, we will add the site URL in the description of the episode so you can
find the direct link to this website.
And in terms of language, I know that there is not one language official in Spain, but
if you would like to make business with Spanish companies, Spanish retail, how important it
(28:07):
is to speak Spanish or you can do that in English?
It depends on the customer.
Importers usually speak properly English and there is no need to speak Spanish.
But the truth is that the Spanish language is highly recommended.
Because I think what I have read in the statistics is that less than 30% of local managers are
(28:33):
fluent in English.
So better in Spanish.
But I think there's something that is changing.
It's true, step by step, little by detail, that managers in different companies are speaking
more English day after day, but it's not always like that.
(28:56):
That is in my experience.
So this language, for instance, is highly recommended.
Okay, so you need to either use a translator with you or you need to hire maybe the local
agent that is speaking Spanish and understanding the business that will help you to establish
these connections?
Well, I think to start businesses, I think the best is to have an agent.
(29:20):
In the beginning, coming not only to Spain, but I think to another country, it's better
to start with someone who takes your hand and takes you everywhere in the local language
and knowing about everything in the market.
So just to start is better with an agent, in my opinion.
(29:42):
And then perhaps you can start working alone.
And how good is the idea to contact the local government, for example, to contact the government
of Extremadura and then being introduced to businesses via this local government?
For example, you are an importer that would like to sell goods in Extremadura and then
(30:05):
they might be this kind of a gate to this region.
That's very easy.
It's very easy because in each community you have a public company that is in charge of
foreign affairs.
And so you can talk directly to them and they will put you in contact with the different
(30:26):
companies in the region.
For instance, in my community, Extremadura, Extremadura is in the southwest of Spain,
Madrid, Lisbon, just in the middle, really, Extremadura.
And we have a public company, it's called Extremadura Avante.
So you can contact with them and tell them what you are doing and your interest on looking
(30:51):
for customers, on looking for suppliers, on looking for a contact with the administration
and they will provide you with any information you need to make businesses here.
But it's not only in Extremadura but in the rest of the autonomies in the regions.
You can find the same thing, the same type of public company.
(31:13):
In the south, in Andalusia is Estenda.
In the north, for instance, Asturias is Asturex.
And each community has some kind of public company that can help you to get introduced
in that region.
Clear.
(31:34):
So that might be a quite interesting way to enter Spain as well.
Pedro, what about the Latin American markets?
One of my thoughts was that maybe you can start with Spain that is much more closer
to Ukraine, for example, and then how likely is to have this window to Latin American companies
(31:56):
and countries via establishing the Spanish presence and then with your Spanish partners
to export to Argentina, for example, or Colombia?
How close are these relationships between Spain and these countries and how likely to
find a partner that will help you to be established in Spain and then using the same partner to
(32:21):
go to this further market?
There are many companies that use Spanish partners as a bridge to make businesses in
South America because, of course, we share not only a common language, but also many
aspects of the culture are very similar.
(32:42):
So for us, it's very easy to understand between people in Central and South America and Spain
because, as I say, not only because of the language, because we share a story and also
a culture.
(33:03):
So for us, I think it's much more easy than for someone who comes, for instance, from
France or Germany or any other country in Europe.
And we have also many commercial agreements with South America.
And even logistics is much more easy from Spain than from any other country in Europe.
(33:27):
I think it's a good idea.
Someone wants to get introduced in South America, coming first to Spain, and then perhaps trying
to go to this part of the world.
Clear, clear.
Thanks.
And what about Portugal?
How close are the relationship with Spain and Portugal?
(33:49):
When you consider this region as one when you are entering the market?
Well, Portugal, for us, they are our brothers.
Portugal is very, very close to Spain.
Where I live, I am about one hour from Portugal.
And Portugal, apart from that, is a lovely country, very easy to treat the Portuguese
(34:16):
because they are very open people as well.
And they have a very good relationship between Spain and Portugal.
It's not the same language, Portuguese and Spanish, as you know.
But it's very easy for us to understand.
They are not so different, sometimes it's difficult to understand depending on who we
(34:39):
are speaking to.
But we are very close.
Portugal is one of the main destinies of our sporting goods from Spain.
Portugal is one of the main countries we are sporting to.
And the contrary is the same.
We import many goods from Portugal.
(35:01):
It might be a good idea to establish sales first in Spain and then having this evidence
of cooperation with Spanish companies to go to the Portuguese market and then start negotiations
with them to proceed the sales.
Yes, for sure.
Unfortunately, we don't have too much time left to talk more deep about the Spanish market.
(35:23):
Perhaps we could come back to that later again and deepen our excursion to Spanish retail.
Very interesting conversation.
Thank you again for sharing your experience.
Dmytro, thank you very much for your invitation.
It's been a real pleasure to share with you this hour and telling about us, telling about
(35:46):
the Spanish people and how can we cooperate with Ukrainian companies because for us it's
a real pleasure.
Hi, I'm Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
from different countries about local business secrets and international expansion experience.
In this episode, we will discuss one of the largest markets of Europe with almost 47 millions
of consumers.
Funny beaches, tasty Mediterranean diet, pleasant people, fiestas and siestas – that is what
comes to mind when thinking about Spain.
(00:33):
And to dive deeper into the Spanish business culture, we definitely need a local expert.
So, I have a pleasure to introduce my today's guest Pedro Jara, an independent consultant
from Spain with more than 30 years of experience in retail and business consulting.
During these years, Pedro was working on management positions in large retail chains, developed
(00:56):
internal and international trade with governmental organization of Spanish region Extremadura,
helped businesses to enter Spanish markets and assisted local companies in their internationalization.
Currently, he is running his own consulting business, helping companies in their cross-border
activities.
Hi, Pedro, and welcome to the show.
(01:17):
Hi, thank you, Dmytro.
Thank you very much for inviting me to your podcast.
To start with, I would like to ask you, Pedro, to give your personal opinion, kind of a short
overview of the current situation in the Spanish economy.
The Spanish economy is going pretty well in the last year, especially after the COVID,
(01:39):
because we had a very hard time.
It was the same in Spain and in the rest of the countries in the world.
But unfortunately, I think our economy is growing up pretty well and that makes it easier
for any company who wants to come here to make businesses because, well, I think it's
(02:03):
a good moment now.
We have a political stability and the economy is also very balanced at this moment.
Great, great to hear that.
Pedro, I was reading the reviews of the Spanish economy and how to do business with Spain.
There are a lot of reports about that because Spain is one of the biggest countries in the
(02:28):
European Union and it is very much attractive for foreign businesses.
According to the US Department of Commerce International Trade Administration, there
are 17 autonomous communities in Spain with varying degrees of autonomy and cultural identity,
with like two major hubs in Madrid and Barcelona.
(02:55):
How do you assess that?
How different is Spain and what you should consider while entering the country in this
term?
Well, the population in Spain is about 47 or 48 millions of which urban population is
about 81% and rural population is around 18%.
(03:18):
And, well, when looking to delve into the Spanish market, it's essential to comprehend
that the autonomy of the country.
As you say, Spain is composed of 17 distinct autonomous regions, each of its own government,
regulations and laws.
(03:39):
These regions have an ample amount of power and sovereignty over their respective areas.
It is the reality.
So it is vital to be aware to the local status and regulations before initiating business
in Spain.
That is very important.
There are different customs and different ways of making businesses.
(04:03):
Even the characters are different.
How do they differ in terms of industries?
Are there some peculiarities like some of them are more to agricultural direction, some
of them are more to industrial?
Let's say that perhaps Madrid and Barcelona could be the primary economic hubs, one of
the most agents, distributions, foreign subsidiaries.
(04:26):
Perhaps we could divide Spain in that way.
Perhaps the north is a bit more industrial and perhaps the south is more agricultural
sector.
Very simple, but perhaps could clarify for someone who wants to know how the economy
works here in Spain.
So let's assume that, for example, Ukrainian producer of some food product with some value
(04:49):
at willing to enter Spain.
What kind of roadmap would you suggest for them to keep in mind?
It's not really the map, but it's more how the retailers are working here in Spain.
We have some different retailers that have a big share of market, such as perhaps Mercadona.
(05:15):
Perhaps you know it.
It's one of the main operators here in Spain, they are Spanish, completely Spanish.
And the share they have is about 20% of the market.
So it's a very important operator here in Spain.
(05:35):
And I could name also to Carrefour.
Carrefour, you know, is a French company.
They are mostly hypermarkets and they have a presence also in the whole of Spain.
Dia and Lidl, Lidl as you know, is a German company and is, let's say, a low-cost company.
(05:58):
And they are growing very fast here in Spain.
So if someone from Ukraine wants to come to Spain and they want to get introduced into
the retail market, I think perhaps the more, the more direct it should be to go directly
to these companies because they have the most market.
(06:21):
On the other hand, we have to know that Spain is a very touristic place.
Perhaps, I don't know if it's the second or the third country in the world on the touristic
sector.
But I think it's something to bear in mind as well because we receive around 81 million
visitors each year.
(06:43):
That means that Spain is not only the current population, which as I said, it was around
45 or 47 citizens.
But it's very important to know that every year 81 million visitors come to Spain.
Also the visitors concentrate perhaps on the coast, the south of Spain and the Lucia coast.
(07:08):
Also Levante, Levante means Valencia, Barcelona, Costa Brava, because in Barcelona it's Costa
Brava.
But also the north of Spain.
The north of Spain is one year after another chosen by many of the visitors.
The north of Spain is the green side of Spain because even the weather has nothing to do
(07:32):
with the rest of Spain because it's much more wet, more rainy.
But the same Chinese is more green and the landscape is spectacular.
Do I understand correctly that the most part of the retail market is represented by these
large networks, like large retail networks that you mentioned, and you should not consider
(07:59):
too much the small shops or local stores near the houses or something like that?
No, no, no.
On the contrary, the small shops have also a very huge presence in Spain.
So the small market still has a big presence in Spain, mainly in the rural area.
(08:26):
I think it's very important to know that to come to Spain and to know the local market
is very important to contact with distributors, importers who know how it works, the retail
in Spain, the local market, the big retailers.
From your experience, and I know that you have been working quite a lot with retail,
(08:50):
what is the way to find these distributors and to establish this first contact?
How would you suggest to do that for the newcomers to the market?
I think, in my opinion, my own experience, because as you say, I've been in charge of
some different companies, purchasing department, I think face to face meetings with local business
(09:18):
representatives are very, very important.
The global pandemic has forced everyone to adapt to virtual realities.
That is what is happening.
But I think here in Spain, we still expect a personal relationship with suppliers and
partners.
So it can be challenging to initial communication by phone or email.
(09:42):
And to me, perhaps the more effective is perhaps going to different exhibitions.
We have a huge, very important exhibition, not only in Spain, but also in Europe, such,
for instance, Alimentaria.
Alimentaria in Barcelona is perhaps one of the biggest food exhibitions in Europe.
(10:04):
So many, many importers and also the persons in charge of purchasing in the big retail
companies attend to this exhibition every two years because this exhibition, Alimentaria,
takes place in Barcelona every two years.
(10:24):
And also there is another Alimentaria, as I say, is in Barcelona.
And there is another Gourmet, Gourmet is another exhibition that takes place in Madrid.
This is every year, Alimentaria every two years.
Gourmet in Madrid is every year, around April, more or less.
(10:47):
And I think the difference between these two exhibitions is that perhaps Gourmet is more
for, perhaps in Rome, but it's my perception, you know, is that Gourmet perhaps is more
for the touristic sector and perhaps more for restaurants, perhaps more for, not so
(11:08):
much for retail.
Clear.
But Pedro, from my experience, when you are taking part in an exhibition, even if you
are not just a visitor, but you have a stand there, a booth there, it is not always very
efficient if you did not prepare in advance.
So if you are going to the trade show, you need to agree on meetings beforehand, contact
(11:31):
the potential buyers from distributors or category managers from retail chains, and
then have this trade show as a meeting point with them.
And in these terms, again, according to your experience, is it true for Spain or not?
And if it is true, then how to get in contact with these buyers beforehand?
(11:52):
Is it possible to do via LinkedIn, for example, or via cold calls to these potential customers?
Yes, this works like in any other country.
I think we are in the 21st century and I think we have enough tools to contact previously
before going to an exhibition because we have, as you say, you have LinkedIn, we can make
(12:18):
cold calls, we can send emails, there are many ways to contact previously before going
to an exhibition.
You have also, every year, the exhibition organization, they usually edit a list of
previous customers and also visitors, exhibitors, where you can find a huge list of potential
(12:45):
customers that you can't contact previously.
Of course, always before going to an exhibition, it's very important to prepare it.
Just you want to make it in an efficient way because if you don't do that, you are making
a cold waiting, just as you say, standing in the stand and waiting who is coming spontaneously.
(13:11):
So sometimes it works, but I think you know that having a half stand in an exhibition
is very expensive and if you want to spend properly your money, you have to work previously.
If you don't do that, perhaps it's not so good as you expect.
(13:32):
How open are these potential partners to just talking to you via phone, for example, if
you are just calling them or responding to emails?
What is the most effective way to get to these decision makers in distributors or retail
chains?
You know that cold calls are not always easy.
(13:55):
That's why they are called cold calls.
You are calling to someone that you don't know previously.
Most of the times they don't expect you are there.
You are going to call them.
Sometimes they are not so interested in your product or perhaps they are simply in a bad
day.
(14:15):
They are not in the mood to speak with someone who they don't know.
That is the commercial job, the commercial work, because at the end you have to call
perhaps 50 just to have success with perhaps one or two.
But this is in any other country, this is nothing special with Spain.
(14:37):
This is the word that someone who is in the market world has to know.
Again from your experience, how would you make these cold calls a bit warmer?
Perhaps like for example, I have experience with other countries when we were using trade
associations, local trade associations or retail associations or maybe some local agents
(15:04):
that have access to these potential decision makers.
With introduction, for example, in the Gulf region without an intro, it is highly complicated
to get to the person.
So you need somebody that knows somebody that will introduce you to this person.
This culture of personal relationship is highly developed.
(15:27):
How it is in Spain?
Do you need to have this introduction from other more senior persons or some other organizations
or perhaps from the consular workers from the embassy of the country that is entering
or something like that?
I will tell you how I do.
I don't know if this is how other people in Spain do it.
(15:52):
But what I do, I use very much for instance, WhatsApp before calling.
I prefer just to get in contact with a different tool that is not the cold call.
But before I prefer if it's possible and I go to the mobile phone, it's just to write
before to say who I am, what I am doing, I can offer.
(16:15):
And then I ask properly if they would like to have a conversation, they would like to
have a video conference.
When you write by WhatsApp, Telegram or any other tool we have nowadays, they perhaps
won't read it at the moment.
They think, oh, it's not interesting.
But the message is there.
(16:36):
So perhaps later they read it again.
Perhaps they could think, well, perhaps, perhaps could be interesting.
So that's how I do, but this is my experience.
And to me, it's pretty effective.
Not always work, of course, but I think we can do it.
We have another tools like LinkedIn or even sending an email.
(16:58):
But you know that our mailboxes are full of emails.
Everyone is writing to us or offering many products or services.
So sometimes we don't even open an email.
But I don't know why with WhatsApp or Telegram or these kind of tools, to me, it's more
(17:19):
easy.
Maybe it feels more personal, like it is dedicated to you and the person has done some job before.
You prepared your pitch, your small text, you investigated what is this person about,
what might be the interesting products for them.
So they feel it more personal for them.
And that's why they are more likely to respond through these messaging tools, not the email.
(17:44):
I think it's closer because it's not only that you are writing someone, but at the same
time you have a profile, you have a picture.
So it's something that is not the same, but it's similar.
When I said before, in Spain it's very important, still it's very important, meetings face to
face just to establish a link with the customer, with the supplier, it's because you see the
(18:10):
face of the person.
You see how he is, the feelings you get about that person.
At the end, I think the relationship in market is based on trust.
You need to trust on your supplier, you need to trust on your customer.
(18:31):
Of course, through LinkedIn you can see the profile, you can see the other person, the
customer or the supplier, what he does and how it works.
So we have many tools.
Fortunately, we are in the 21st century.
I remember when I was younger, it was much more difficult and you have to make a huge
(18:54):
effort to make businesses.
Nowadays, you are in Ukraine, I am in Spain, we can have a very good conversation and that
is something that the new technologies bring to us.
But we never have to lose the personal treatment.
(19:18):
The emotional perception of people is very important for Spanish people.
So you need to feel the person, how it behaves, how it smiles to you and how it reacts to
your words.
This empathy to the real person is more important than the words that you can read in the email
or presentation.
(19:39):
Perhaps because the way we are depends also on the weather.
You know that in Spain we have a very good weather, we are used to live in the street
to have personal relationships with our neighbors.
That's very important for us.
Clear, clear.
And talking about the business culture, if you already reach the person, you start the
(20:03):
conversation.
I also found a quote from Cultural Atlas that is saying that Spanish business are very hierarchical.
Communication generally occurs at the senior level, peer-to-peer.
And when addressing another person, you need to stick to titles, of course, like senora
or senora and then using the last name and communicate in a more formal way.
(20:30):
From my experience talking to Spanish people, it is not so much formal.
And I assume that this is more like an old stereotype, but maybe you can clear it up
a bit and say how it is in reality, how you should behave.
Perhaps 40 years ago it could be like that.
I cannot deny it.
But nowadays it's not exactly like that.
(20:53):
Nowadays the culture of the companies are much more democratic and it's not so hierarchical.
I think what every company looks for is efficiency.
So it doesn't matter who you speak to, because at the end what everyone is looking for is
(21:14):
just to give you a very good service.
And if the good service is given by someone in the bottom of the company, no problem.
The most important is that satisfying the customer.
But this is global, I think.
At least in Spain, I don't find that.
I don't see that you need to speak to the owner necessarily.
(21:39):
Sometimes, perhaps, every company is different, but in general, I don't feel it like that.
How open are Spanish people in negotiations?
Are there any kind of usual hidden agenda or you are direct and you can directly speak
what you are thinking about and discuss some business issues or you should be careful with
(22:01):
that?
I think you can go directly to the point.
Well, you know, I said we like to talk, we are talkative, you know, perhaps we always
like to start a conversation asking for your family, how are you doing, where have you
been on holidays?
And after 10 or 15 minutes, you go to the point.
(22:24):
Perhaps, perhaps, I don't know, not everyone is the same, of course, but you can find very
easily this kind of person, someone that, as I told you, we always look for the trust,
we like to know the person we are talking to.
So we like to know about them.
The way we make businesses is a bit like that.
(22:47):
We like to know the person and perhaps we don't know at the beginning, directly to the
point, always saying that depends on the company, depends on the person.
But we like that.
Some small talk about the personality and the background and then to the point.
Yes, about the situation in the country, about the weather, about the football, about…
(23:12):
And then after a moment, perhaps we start speaking about real business.
But it's not always like that, of course.
Perhaps it takes five minutes speaking about something is not the real issue of the meeting.
But we like to make this.
(23:34):
Clear.
So this is very important to have this personal relations with your potential partner in Spain
and establish this trust and make it long term.
Yes.
So this is not like one stop shop, but more like a building in a long term relationship.
Pedro, another very common and very often I meet this stereotype about Spanish people,
(23:59):
this mañana concept.
It's like not keeping to terms or not being very strict to the agenda and always answering
mañana, like it is not too urgent.
So you're very relaxed in business.
How true is that?
Well, that is part of the dark legend of the Spanish because many things perhaps we are
(24:26):
lazy because we like fiesta, most of all.
We walk a little and party a lot.
We need to sleep siesta in the afternoon to get going.
All of them are stereotypes.
The mañana, mañana, not today.
Well, the fact is that summer in Spain is very, very hot.
(24:47):
So if you want to work, perhaps not so much now, but in the previous year, if you want
to work from, for instance, two o'clock until seven o'clock in the afternoon, in summer
is impossible.
So what do we do?
We eat up very early and we go to bed very late at night because we try to profit the
(25:09):
fresh hours in the day.
So it's normal that in the medium hours, as I say, from perhaps two o'clock up to seven
o'clock, perhaps you have to see it in summer, but just in summer, not in winter.
So for a foreigner who comes here who are not used to make that, they say, oh, these
(25:29):
Spaniards are all very lazy because they go to bed in the day.
That is something we will never do.
So sometimes it's necessary to understand why and the reasons of the things.
So there are many stereotypes.
(25:49):
People think that perhaps for foreigners that we all like bullfights.
To tell the truth, there's not so many people who like bullfighting in the US.
Clear, clear.
You have also many years working for government.
So you have been working for Extremadura government in terms of trade relations.
(26:10):
How do you feel and how do you think from the perspective of exporter, how it is advisable
or not to work with government?
If you are supplying to governmental organizations or you are participating in some governmental
tenders, how would you advise to enter this type of market in Spain?
(26:32):
To tell the truth, I think working with the government in Spain is very easy.
As I told you, we have 17 communities in Spain and we have a central government in Madrid.
And I think the demo is just to go to a site.
It's called Plataforma de Contratación del Estado.
(26:55):
It's a government platform to contract with the government in Spain.
And you need to search about the whole government tenders.
And there you can find every tender published with all the conditions.
And it's very easy to access to a tender here in Spain.
(27:18):
Perhaps you have some requirements like to make an inscription in some time zone statements
or something.
But to tell the truth, it's very easy.
So remember, the site is called Plataforma de Contratación del Estado.
I repeat, Plataforma de Contratación del Estado.
(27:40):
Where you can find the whole information.
For the listeners, we will add the site URL in the description of the episode so you can
find the direct link to this website.
And in terms of language, I know that there is not one language official in Spain, but
if you would like to make business with Spanish companies, Spanish retail, how important it
(28:07):
is to speak Spanish or you can do that in English?
It depends on the customer.
Importers usually speak properly English and there is no need to speak Spanish.
But the truth is that the Spanish language is highly recommended.
Because I think what I have read in the statistics is that less than 30% of local managers are
(28:33):
fluent in English.
So better in Spanish.
But I think there's something that is changing.
It's true, step by step, little by detail, that managers in different companies are speaking
more English day after day, but it's not always like that.
(28:56):
That is in my experience.
So this language, for instance, is highly recommended.
Okay, so you need to either use a translator with you or you need to hire maybe the local
agent that is speaking Spanish and understanding the business that will help you to establish
these connections?
Well, I think to start businesses, I think the best is to have an agent.
(29:20):
In the beginning, coming not only to Spain, but I think to another country, it's better
to start with someone who takes your hand and takes you everywhere in the local language
and knowing about everything in the market.
So just to start is better with an agent, in my opinion.
(29:42):
And then perhaps you can start working alone.
And how good is the idea to contact the local government, for example, to contact the government
of Extremadura and then being introduced to businesses via this local government?
For example, you are an importer that would like to sell goods in Extremadura and then
(30:05):
they might be this kind of a gate to this region.
That's very easy.
It's very easy because in each community you have a public company that is in charge of
foreign affairs.
And so you can talk directly to them and they will put you in contact with the different
(30:26):
companies in the region.
For instance, in my community, Extremadura, Extremadura is in the southwest of Spain,
Madrid, Lisbon, just in the middle, really, Extremadura.
And we have a public company, it's called Extremadura Avante.
So you can contact with them and tell them what you are doing and your interest on looking
(30:51):
for customers, on looking for suppliers, on looking for a contact with the administration
and they will provide you with any information you need to make businesses here.
But it's not only in Extremadura but in the rest of the autonomies in the regions.
You can find the same thing, the same type of public company.
(31:13):
In the south, in Andalusia is Estenda.
In the north, for instance, Asturias is Asturex.
And each community has some kind of public company that can help you to get introduced
in that region.
Clear.
(31:34):
So that might be a quite interesting way to enter Spain as well.
Pedro, what about the Latin American markets?
One of my thoughts was that maybe you can start with Spain that is much more closer
to Ukraine, for example, and then how likely is to have this window to Latin American companies
(31:56):
and countries via establishing the Spanish presence and then with your Spanish partners
to export to Argentina, for example, or Colombia?
How close are these relationships between Spain and these countries and how likely to
find a partner that will help you to be established in Spain and then using the same partner to
(32:21):
go to this further market?
There are many companies that use Spanish partners as a bridge to make businesses in
South America because, of course, we share not only a common language, but also many
aspects of the culture are very similar.
(32:42):
So for us, it's very easy to understand between people in Central and South America and Spain
because, as I say, not only because of the language, because we share a story and also
a culture.
(33:03):
So for us, I think it's much more easy than for someone who comes, for instance, from
France or Germany or any other country in Europe.
And we have also many commercial agreements with South America.
And even logistics is much more easy from Spain than from any other country in Europe.
(33:27):
I think it's a good idea.
Someone wants to get introduced in South America, coming first to Spain, and then perhaps trying
to go to this part of the world.
Clear, clear.
Thanks.
And what about Portugal?
How close are the relationship with Spain and Portugal?
(33:49):
When you consider this region as one when you are entering the market?
Well, Portugal, for us, they are our brothers.
Portugal is very, very close to Spain.
Where I live, I am about one hour from Portugal.
And Portugal, apart from that, is a lovely country, very easy to treat the Portuguese
(34:16):
because they are very open people as well.
And they have a very good relationship between Spain and Portugal.
It's not the same language, Portuguese and Spanish, as you know.
But it's very easy for us to understand.
They are not so different, sometimes it's difficult to understand depending on who we
(34:39):
are speaking to.
But we are very close.
Portugal is one of the main destinies of our sporting goods from Spain.
Portugal is one of the main countries we are sporting to.
And the contrary is the same.
We import many goods from Portugal.
(35:01):
It might be a good idea to establish sales first in Spain and then having this evidence
of cooperation with Spanish companies to go to the Portuguese market and then start negotiations
with them to proceed the sales.
Yes, for sure.
Unfortunately, we don't have too much time left to talk more deep about the Spanish market.
(35:23):
Perhaps we could come back to that later again and deepen our excursion to Spanish retail.
Very interesting conversation.
Thank you again for sharing your experience.
Dmytro, thank you very much for your invitation.
It's been a real pleasure to share with you this hour and telling about us, telling about
(35:46):
the Spanish people and how can we cooperate with Ukrainian companies because for us it's
a real pleasure.
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