Kristīne Grapmane, SIA „STENDERS”, Chief Operating Officer
The last few years have proven that exports should be developed in multiple geographical directions. As a result, Stenders, the producer of bath rituals products, is currently focused on strengthening its current export markets and entering new markets in Europe, the US, Canada and even Australia.
“Exporting will succeed if you understand your values and the unique features of your products. With this knowledge, you just need to forge ahead as each product has its niche and market. Latvia is a very good market to test products. However, to develop further, you need to export. It is worth using all export support mechanisms that are currently available in a smart and well-considered way. Growth lies abroad,” underlines Kristīne Grapmane, the Executive Director of Stenders.
Alone or with franchise partners
In export markets, cooperation with Stenders can be initiated by two parties: either the company can develop a new market alone, or a partner from a specific country can approach it. Entry into a new market is usually preceded by a thorough market study, analyses of the economic situation, product niche and competitors. “There are competitors that we monitor more closely, and depending on their activities, we try to decide which markets are the most promising,” explains K. Grapmane.
Furthermore, it is important to study the structure of sales channels, i.e. whether it is better to enter a new market as a wholesaler or to start a franchise. “Some markets in the cosmetics sector are more decisive, e.g. Germany. If you succeed in Germany, it will most probably be easier to launch your products in France, Switzerland and elsewhere,” she says.
Both an internal team and external contractors, such as the export advisory company Gateway&Partners, study markets and find new partners for the company. “When we find new partners, we gain new resources, capacities and insights,” tells K. Grapmane.
To develop its exports, Stenders participates in international exhibitions. This year, the company has made the decision to participate in one of the largest global cosmetics fairs, Cosmoprof 2023, that takes place in Bologna, Italy.
70% of turnover exported
70% of Stenders turnover is exported. “China still is our largest export market. However, due to the very strict Covid-19 safeguards and restrictions, this market has recently shrunk. Since the start of the pandemic, China has enforced its zero-tolerance policy: no case of infection is acceptable; the cities are still periodically placed under lockdown, and there are very strict trade and import restrictions. These factors increase uncertainty in the market considerably,” explains K. Grapmane.
Stenders has ceased its cooperation with Russian partners as a result of the Russian war in Ukraine. To mitigate geopolitical risks, this year we have focussed on development in other markets. In the Middle East, good cooperation with our Jordanian franchise partner has resulted in new stores and wholesale channels. Iraq and Qatar have also joined our export markets. This year, Stenders has also opened its first store in Australia. In Europe, we have just made the first few steps: our franchise partner in the Netherlands has made good progress, and work is ongoing in Germany. “New markets always require large investments, research, patience and willingness to take risks. To reach your targets faster, it is important to define priorities and focus on a particular market,” claims K. Grapmane.
Challenge: find and develop human resources
Besides geopolitical risks, human resources are also a challenge. “For us to export, our employees should be well educated and be able to develop and follow changes and the latest trends. It is a challenge to find and retain real professionals,” underlines K. Grapmane.
To stimulate employee learning and development, in 2022 the company has reviewed its human resources development strategy that is a part of the sustainability and welfare programme of Stenders. Currently, the company is using the LIAA Mini MBA training programme “Innovation Management”, as well as considering other opportunities to develop our company according to agile principles. “Development of our employees is an important criterion, thus, we will continue to use the available support to develop human resources,” add K. Grapmane.
Large companies also require support
Small and medium-sized companies have access to an extensive range of instruments. While large producers that have more than 250 employees, such as Stenders, have very limited access to support. “New markets always require large investments, research, patience and willingness to take risks. If state support programmes for export were available, it could be developed even faster. Currently, only companies are developing exports depending on their capacity. Thus, we actively support the idea of providing more support and a larger export toolset to larger companies,” states K. Grapmane.
As to state aid, the process is quite bureaucratic, e.g. preparing all the documentation required for LIAA training. “We understand that due to our corporate structure, the bureaucratic process is longer and more complicated. Though it is needed, it would make sense to complete it only once so that during future projects, this procedure would take less time and be clearer. Thus, the activities of the Latvian Exporters Association to develop the Green Corridor are really important as they would result in shorter processes in areas important to exporters,” adds K. Grapmane.
Still, over the course of time, cooperation with public bodies has improved. “The officials are more forthcoming than before, and they are more eager to help. LIAA really tries to understand problems, help in solving them and provide comments as needed. I know that I have the necessary contacts, and I can always call and will be helped. I really appreciate the assistance provided by LIAA: advice, explanations and situational assessments,” says K. Grapmane.