- GANS Article
Selecting a promising export market involves far more than identifying a country with a large population or growing economy. A market may show attractive demand while presenting difficult product standards, high import duties, complex distribution channels or logistics costs that make profitable entry challenging.
The correct route also depends on the exporter’s capabilities. Direct sales may provide greater control and margin, while a distributor can offer local relationships, regulatory knowledge and an established delivery network. E-commerce, commercial agents, wholesalers and strategic partnerships provide additional routes, each with its own cost, risk and management requirements.
The opportunity remains substantial. The World Trade Organization reports that the value of world trade in goods and commercial services increased by 8% to approximately US$34.89 trillion in 2025. However, access to this market is uneven, and exporters must compete on suitability, reliability and landed value rather than product quality alone. WTO World Trade Statistics
Market size does not guarantee market suitability
Market selection often begins with broad indicators such as population, income, import growth and category demand. These figures help narrow the search, but they do not provide a complete commercial case.
A smaller market with compatible regulations, efficient logistics and a capable distribution partner may be more attractive than a much larger country with high duties and costly entry requirements. Exporters should therefore evaluate the accessible market rather than relying only on headline market size.
Three questions should guide the initial assessment:
Is there demonstrated and commercially accessible demand for the specific product?
Can the product meet local regulations, labelling requirements, price expectations and delivery conditions?
Which sales and distribution model provides the most realistic balance between control, cost and market access?
Build a structured market shortlist
A comparative market scorecard helps prevent decisions based on isolated statistics or personal preference. Each possible destination can be evaluated against a consistent set of criteria, including:
- Current import value for the product category
- Import growth and demand stability
- Number and strength of established competitors
- Tariffs, taxes and other border charges
- Product registration and certification requirements
- Packaging and labelling rules
- Freight costs and typical delivery times
- Currency and payment risk
- Availability of suitable buyers or distribution partners
- Ease of conducting and enforcing commercial agreements
- Cultural, language and purchasing differences
- Potential for repeat orders and wider regional expansion
The criteria should be weighted according to the business model. A food producer may assign greater importance to shelf life, cold-chain availability and product registration. An industrial supplier may place more emphasis on technical approval, after-sales support and replacement-part availability.
Furthermore, the merger provided Company with enhanced buying power through the combined volume benefits from shared suppliers. This advantage led to a reduction in the cost of goods sold (COGS), further contributing to overall cost savings.
Through our diligent efforts, we identified hundreds of millions of dollars in cumulative synergies that Company could capitalize on following the merger. The company has successfully reinvested a significant portion of these savings into strengthening its brands and fostering continued growth and success.
Confirm demand at product level
National import statistics can indicate opportunity, but they should be interpreted carefully. A market may import large volumes in a category while demand is concentrated in a product type, price band or distribution channel that does not suit the exporter.
Research should move from broad data to specific buyer questions:
- Which product formats are selling?
- What pack sizes and specifications are preferred?
- Which countries currently supply the market?
- What retail, wholesale or institutional prices are achievable?
- Are buyers seeking premium, value or specialised products?
- How frequently do they reorder?
- What minimum order quantities can the channel absorb?
- Which product claims, ingredients or certifications influence purchasing?
Potential customers can then be approached with samples, technical information and indicative pricing. Their responses provide more useful evidence than general expressions of interest.
Before committing to large volumes, exporters can test the market through controlled sample orders, pilot shipments or a limited number of carefully selected buyers. World Bank research indicates that export-promotion support can improve both entry into and survival within export markets, reinforcing the value of informed preparation and continued in-market support. World Bank research on export entry and survival
Compare the available entry routes
There is no universally correct route into an export market. The appropriate structure depends on the product, customer base, regulatory environment and resources available.
Direct sales
The exporter sells directly to retailers, institutions, manufacturers or other commercial customers.
This route provides closer customer relationships and greater control over pricing and positioning. It can also retain more of the available margin. However, the exporter must manage prospecting, quotations, documentation, logistics, payment collection and customer support.
Direct sales are most suitable where the number of target customers is manageable and the exporter can support them from South Africa.
Distributor or importer
A local distributor purchases or imports the products and supplies customers within the destination market.
This can provide access to established relationships, warehousing, local delivery and regulatory expertise. The trade-off is reduced control over the final selling process and the need to share margin with the distributor.
Before appointment, the exporter should assess the distributor’s sector experience, geographic coverage, sales resources, financial capacity and treatment of competing products.
Commercial agent
An agent introduces customers and facilitates sales while the exporter generally remains responsible for fulfilment.
This approach can provide market representation without requiring the exporter to establish a full local operation. Contracts should clearly define territory, commission, exclusivity, performance expectations and ownership of customer relationships.
Wholesaler or specialist channel partner
Wholesalers can be useful where the market consists of many smaller buyers that would be expensive to serve directly. A specialist hospitality, food-service, medical or industrial supplier may also provide more valuable access than a general distributor.
E-commerce and marketplace entry
Digital channels can lower the initial barrier to reaching customers, particularly for standardised consumer products. However, marketplace fees, fulfilment requirements, return management, advertising costs and local consumer regulations must be included in the assessment.
Online visibility does not remove the need for a dependable import, inventory and delivery structure.
Local partnership or commercial presence
A joint venture, strategic alliance or local subsidiary may become appropriate once demand has been demonstrated. This can improve market control but requires greater investment, governance and legal support. It is generally better considered after the exporter has developed reliable market knowledge.
Calculate the complete landed proposition
An export price should be based on the full cost of reaching the buyer, not only the ex-factory product price.
The landed-cost model may include:
- Product and export packaging
- Inland transport in South Africa
- Freight forwarding and handling
- Port and terminal charges
- Ocean, air or road freight
- Cargo insurance
- Import duty and applicable taxes
- Customs-clearance and inspection costs
- Destination warehousing and distribution
- Distributor, wholesaler or marketplace margins
- Currency protection and payment costs
- Promotional and market-support expenditure
Consider an illustrative product with an ex-works value of R100. If export packaging, transport, freight, border costs and local distribution add R55, the product reaches the channel at R155 before the importer’s margin or destination taxes. A market that appears attractive at R100 may be uncompetitive once the complete value chain is included.
This example is simplified and does not represent a universal cost structure. Actual pricing should be calculated for the product, Incoterm, shipment size and destination concerned.
Examine regulatory fit before selling
Product compliance should be investigated before final quotations or commercial commitments are made. Requirements may apply to the product itself, its ingredients or materials, production facility, packaging and marketing claims.
Depending on the category and destination, exporters may need to address:
- Product registration or import permits
- Sanitary or phytosanitary requirements
- Certificates of analysis or conformity
- Country-of-origin documentation
- Product testing and technical standards
- Ingredient, allergen or nutritional declarations
- Language and labelling requirements
- Packaging-recovery or environmental obligations
- Traceability and batch identification
- Restrictions on product claims
A product that is legal and correctly labelled in South Africa may require modification for another jurisdiction. The time and cost of achieving compliance should be incorporated into the market-entry decision.
Exporters should obtain appropriate advice from qualified customs, regulatory and legal specialists for the relevant product and destination.
Assess potential market partners carefully
The local partner often determines how effectively a product reaches customers. A well-connected distributor can accelerate entry, while an unsuitable appointment can restrict growth and prevent the exporter from developing other relationships.
Commercial due diligence should consider:
- Company registration and ownership
- Financial standing and payment history
- Existing product portfolio
- Customer and channel coverage
- Warehousing and delivery capabilities
- Sales team size and technical competence
- Marketing commitment
- Regulatory or import experience
- References from suppliers and customers
- Ability to provide credible sales reporting
Exclusivity should be granted cautiously. Where it is commercially justified, it can be linked to defined territories, channels, minimum purchases, launch milestones and regular performance reviews.
A distributor that requests exclusive rights without committing to stock, sales targets or market-development activity may limit the exporter’s options without creating corresponding value.
Match the product to the market
Products frequently require practical adaptation before launch. This does not necessarily mean changing the core product. Adjustments may include pack size, case configuration, language, labelling, pallet format or supporting documentation.
For example, a format developed for South African retailers may be too large for another country’s convenience channel. Hospitality or institutional buyers may prefer bulk formats, while premium retailers may require smaller packs and stronger presentation.
Product adaptation decisions should be supported by buyer evidence. Changes based on one potential customer’s preference may create unnecessary complexity if they are not representative of the wider market.
The International Trade Centre’s guidance for SMEs entering international value chains highlights the importance of meeting buyer requirements and strengthening the capabilities needed to participate and advance within those chains. International Trade Centre SME guide
Test before committing to expansion
A staged entry model allows the exporter to learn without creating excessive exposure.
A practical sequence may include:
- Select one target market and a focused product range
- Confirm regulations and calculate landed pricing
- Approach a defined group of qualified buyers
- Provide samples and obtain structured feedback
- Complete a pilot commercial shipment
- Measure sales, delivery performance and customer response
- Refine the product, pricing or channel arrangement
- Expand only after repeat demand has been demonstrated
Assume, for illustration, that an exporter receives interest from 20 potential buyers. Six request samples, three place trial orders and two reorder within six months. The most valuable signal is not the initial interest rate, but the conversion to repeat purchasing.
Pilot targets should therefore measure more than leads. Useful indicators include trial-order conversion, repeat-order rate, gross margin after market costs, payment performance, delivery reliability and customer complaints.
Plan for commercial continuity
Entering a market is only the first step. Export sustainability depends on the ability to maintain supply, support customers and respond to market changes.
The exporter should establish:
- Realistic production and replenishment schedules
- Forecasting arrangements with major customers
- Stockholding and reorder responsibilities
- Alternative freight options
- Currency and payment controls
- Quality and complaint procedures
- Clear responsibility for registrations and renewals
- Regular distributor or agent performance reviews
- A process for updating pricing when major costs change
Research on export survival has repeatedly shown that many new export relationships are short-lived. This makes disciplined follow-through as important as finding the original opportunity. A market should not be considered successfully entered until commercial activity becomes repeatable and economically sustainable.
Selecting the right route with GANS South Africa
The strongest market-entry decision connects genuine demand with a commercially workable route. It considers product fit, regulation, partner capability, pricing and logistics as one integrated proposition.
GANS South Africa assists businesses with product sourcing, export coordination and the practical assessment of international supply opportunities. This may include clarifying buyer requirements, coordinating product information, supporting supplier engagement and working with appropriate logistics and specialist partners.
Rather than committing significant resources on the strength of headline demand, exporters can begin with a focused market, controlled product range and measurable pilot programme. Evidence from the pilot can then guide adaptation, partner selection and wider investment.
The objective is not simply to place a product in another country. It is to establish a route through which suitable products can reach the right buyers consistently, compliantly and at a price that supports lasting commercial growth.
* The trade statistics and research referenced in this report are published benchmarks and should not be interpreted as guaranteed commercial outcomes. All calculations are illustrative. Exporters should obtain appropriate customs, tax, legal, regulatory and financial advice for their specific products and destination markets.
