France : A major European market

France is the second largest market in Europe, with a population of 67 million, just behind Germany with 83 million. In 2020, the French gross domestic product (GDP) was 2630.32 billion USD (2509.19 billion Euro), ranking the country 3rd in Europe after Germany and England and 7th in the world. In France, the retail sector revenue is 462.6 billion euro, which represents 18.4% of the country’s total GDP. The French retail market is mainly dominated by large retail chains. Three groups; Leclerc, Carrefour and Les Mousquetaires hold more than half of the market share in food distribution (57.8%).

French Retail Market Trends

Several trends, already present before the COVID pandemic, have been supported by the latter and have led companies to rethink and refocus their development.

First, we find the development of e-commerce. The French are buying more and more online. Indeed, the market share of e-commerce in the retail sector continues to increase year after year and reach 14.1% (65.23 billion euro) in 2021. This trend, supported by the pandemic, has led French companies to engage in an express digital transformation in order to remain competitive.

The COVID pandemic has also accelerated changes in consumer behavior in other areas, as consumers are now seeking contactless experiences. First, we find contactless payments. The latter, which represented a third of card payments before the pandemic, has become the preferred payment method for consumers and currently represents more than half. The click & collect has also experienced a rise in power, pushing companies to opt for an omnichannel strategy. Finally, cashier-less convenience stores have made their mark on the retail market by offering a touchless experience, offering everyday products and being accessible 24/7.

In France, the trend is also towards “sustainability”. Indeed, with an ecological awareness that is developing more and more quickly, consumers are more and more concerned about two points: the packaging and the origin of the products. This is becoming more and more prevalent among the younger generation, notably the Z generation, who prefer that packaging be ecological, biodegradable, recyclable or compostable. In addition, consumers are looking for local products, or from neighboring countries when possible. This can be observed for fruits and vegetables, where some consumers will not appreciate importing products from other continents if they can be found in neighboring countries.

A last important point to be noted is the importance that the French attach to quality, even before the price. Quality is indeed the first criteria of selection of products, particularly when it comes to purchasing food, beauty or pharmaceutical products. We can also notice that through the behavior of consumers, who, looking for quality and transparency, are more and more numerous to use mobile applications to scan the barcodes of products in order to obtain more information about their composition.

Organic Food Market in France.

The organic market has been expanding rapidly for several years in France. In 2021, the value of the organic market was 13.27 billion euros, the sector has doubled in 5 years. Moreover, France is among the first European producers and markets.

Following the pandemic of COVID, the French have renewed their interest in health and it seems that the various confinements have amplified this growth. Consumers are therefore looking for products that are good for their health, but also respectful of the environment and fair for the producers. France is one of the European countries where this trend is the strongest, with 82% of consumers who buy organic products, including 55% on a regular basis.

As a result, retailers and brands have to adapt through more sustainable purchasing strategies. In addition, several brands specialized in organic products, such as Biocoop, Bio c’Bon or Naturalia have seen their market share grow more and more quickly.

Market Entry Opportunities

France is a country that seems very attractive for companies. Indeed, success in this country, which has 67 million inhabitants with a strong purchasing power, can be extremely beneficial for companies. Moreover, its location, its membership in the European Union and its highly developed logistics network make France the ideal gateway to Europe and its 746 million inhabitants.

The French food and beverage market is an extremely interesting market, able to welcome new companies that can meet the demands of consumers, who are looking for quality products. However, the market is extremely competitive, so it is necessary to know how to adopt the right strategy to enter the market, to manage to target the right groups of consumers and to find the right partners, adapted to your offer.

But the food and beverage sector is only one of many potential sectors. A good example of a successful entry into France is BS Toys. This Dutch company, which produces eco-friendly games for children that are both fun and educational, has managed to find its customers in France. Benefiting from the trend of consumers turning to quality and more environmentally friendly products, it sells its products through retailers, but also through specialized wholesalers. Entering the French market in 2013, the company has been able to adapt, to develop and has now established its place in the market.