“In 2020, we have experienced unique moments, but, in the end, the results are rather positive . “Jérôme Bonnet, Managing Director of Pramex International, is rather positive when it comes to discussing French companies that set up internationally. His company, a specialist in advising on the international establishment of start-ups, SMEs and mid-caps, has published, in partnership with Banque Populaire, the 5th Barometer on the establishment of French SMEs, mid-caps and start-ups in 2020. (see methodology in box below)
Overall, the Covid crisis has only very little impact on internationalization projects French companies. In addition to the barometer, the Banque Populaire / Pramex tandem carried out a survey of 102 business leaders. Just over half (51%) of executives surveyed say have maintained their investment decisions in 2020. The pandemic also had very little impact on geographic choice, as 89% of respondents confirmed that countries targeted internationally remain unchanged. Thus, only 13% of those interviewed confirmed having rethought the nature of their international strategy by favoring proximity instead. Finally, the aid measures put in place by the State encouraged only 10% of the managers questioned to go international.
“The majority of them [NDLR : des start-up, PME et ETI françaises] made the bet that there was more to lose than to gain by changing their strategy. Unlike others, these companies quickly considered that the health crisis would be temporary, that at some point the markets would resume a more normal aspect ” comments Philippe Waetcher, director of economic research at Ostrum Asset Management (Groupe BPCE).
The United States, Germany and Singapore, the main winners of 2020 …
The United States remain by far the leading market for French companies abroad, with a market share of 13.6% in 2020. The American market has revived after a significant decline the previous year (11.4% of projects in 2019). More generally, North America has regained shape in this year 2020, with nearlyone in 5 French companies (19%) that import there. The continent suffered a heavy decline last year, falling to 16%.
South America absorbs between 3 and 4% of the internationalization projects of French companies. The major part (2,1% projects) companies that set up in South America do so in Brazil.
Second world destination and number one in Europe, Germany (9,2% of establishments) confirms its position as a privileged refuge market for French leaders. Our neighbor from across the Rhine capitalizes on its domestic market and its role as a driving force for exports. Like it, Europe is consolidating its status as the leading area for French companies, with nearly 52% market share. The old continent benefits from the disaffection of entrepreneurs for distant destinations.
Singapore for its part, consolidates its vocation as a hub for all of Asia. Its market share is growing steadily from 3.1% in 2017 to 4,6% in 2020, despite the draconian conditions to be met in order to establish itself in its territory. Gateway to Southeast Asia, the city-state benefits from the decline of Hong Kong. More generally, Southeast Asia recorded a slight increase. Economists also designate it as the reservoir of future growth.
… unlike Spain and Hong Kong
For its part, theSpain acts as big loser this year 2020. In one year, the Iberian Peninsula has lost a third of French projects. With 6,8% in market share, the destination fell from first to third in Europe behind Germany and the United Kingdom. In 2020, Spain paid for the shutdown of the two driving sectors of its economy: consumption and tourism. This situation could nevertheless be passenger, in the last trimester, Pramex observed a net renewed interest for the country.
In four years, Hong Kong, the traditional Western base for the conquest of Asia, saw its market share divided by three. In 2020, it shows a further decline, to 1.3%. It suffers from its political instability and tax reforms. Likewise, except Taiwan, all markets inSouth Asia and East Asia, which attracted a significant number of French projects, show a further decline in 2020. In four years, this loss amounts to 15%.
Finally, theAfrica also continues to disappoint. In view of its demographic explosion, experts predict that Africa is one of the markets of the future with the greatest potential. It is clear that its attractiveness is not increasing on the side of SMEs and mid-caps. With 7% market share in 2020, the continent has even suffered an unprecedented decline since 2018. Special mention all the same for the Maghreb, which brings together three quarters of these projects.
The 2021 international presence barometer was carried out between January 2020 and April 2021. It lists the investment projects carried out abroad in 2020 by start-ups, SMEs and mid-cap companies with a head office in France. The study combines projects that create jobs through the creation of subsidiaries, joint ventures and acquisitions abroad. It is made up of 631 establishment projects carried out in 51 countries, including 433 creation of subsidiaries and 198 acquisitions. These projects represent a sample of at least 30% of each of these markets.
The study does not include operations carried out by large French groups, financial operations, franchises or plans to extend existing subsidiaries.