Unknown features of the Canadian market

“Going for export” is a cherished desire that many Ukrainian entrepreneurs have added to their list of goals and plans for 2020. The most daring of them see their goods on store shelves not only in the EU countries, but also in overseas and "pro-Ukrainian" Canada. Is it really what Made in Ukraine is waiting for, what you need to be prepared for, and how to find your place in the market of this country, says Irina Kobets, business consultant, head of IVI Furniture (Canada).

Loyalty to everything Ukrainian and high solvency of the population is the “honey” our manufacturers are ready to fly to. Any domestic product can be presented on the Canadian market. There are many potential buyers in Canada (more than 35 million), and they are very different - this is a multicultural country, more than 20% of the population of which was born outside of Canada. Accordingly, the customs and preferences of Canadian customers and partners are diverse. In addition to the scale of sales, a number of programs for business of state and regional scale are also interesting. Loans at an incredible 1.68-3%, grants from 400 thousand to 1 million Canadian dollars, all kinds of programs for staff training, language learning, 100% financing of startups ... It would seem that a business paradise has been created in this country. But to get into it, you need to go through seven circles of hell.

Cultural catch
The cultural characteristics of Canada for a Ukrainian entrepreneur can become a big challenge or a path to collapse. The main thing is a very different business culture. “I had a case when a person made appointments for me for six months, didn’t come to them, transferred them on the most absurd occasions: either there was no mood, then he left for“ skiing ”, then the cat became ill. Although he himself said before that he likes my products, he wants to buy them and that I organize negotiations, ”says Irina Kobets. “In the end, I stopped trying to make contact.” Encountering it by chance, I heard: “So why didn’t you prepare the meeting?” All the above circumstances that arose not through my fault did not confuse him. He said, "if you haven’t insisted, then you don’t really need a contract with me." This is a very revealing example. In Canada, one does not need to knock timidly on doors; they need to be opened “from the foot”.

Consumer power
The basic rule of trade with Canada is that the consumer is always right. And this is not declarative, as in Ukraine, but non-alternative. If a Canadian buys a product, and he does not meet his expectations, this product will be freely returned to the seller with a full refund throughout the year. Note that the product is not defective, not defective, but simply not in line with expectations. “For example, I buy a heater and expect from it the functions of an air conditioner, but it will not cool! - I have every right to return it. I bought it in November, and brought it in March. And used it for free all season. A trifle, but still saving ... Of course, not all Canadians are running to take back purchased goods. But among immigrants from the post-Soviet space there are many who take the opportunity to take something on time. First of all, this applies to household goods, household appliances, computers, smartphones. People can use a smartphone and turn it in six months, because a new model is coming out. The store sells the returned goods again, but already at a discount of 50%. It is called open box, in an open box. Some scammers choose what they need, buy, open the houses without even taking out the product, and take them back. And a day or two later they go to the same store and ask for the same open box product, eventually getting it 50% cheaper, ”Irina Kobets tells about real situations.
Of course, these are not mass precedents, but these are the risks and losses that must be taken into account when determining the value of your product for Canada. Even furniture stores do this. Irina had a case when a buyer of a sofa from a remote part of the country decided that he was no longer suitable for their interior. And this is not the problem of the fact that she made a mistake in the choice, but the problem of the entrepreneur that his product did not meet expectations. To take it back (and the seller pays for the return), you had to pay more than half the price of this sofa. “As a result, we apologized to the customer that we did not live up to her expectations, sent her a new sofa, and asked us to accept the gift and give it to someone from whom I know it would be more appropriate,” the speaker said.

Not a standard surprise
If you have a brand, it means you have a brand in Ukraine. No one knows him in Canada. Do not expect to transfer success - just copy your actions and decisions in the domestic market, the entrepreneur emphasizes. It is impossible to do without conducting marketing research, studying market conditions and mental characteristics. For example, the best Ukrainian furniture may not “go” for one simple reason: Canada has different sizes. Mattresses, chests of drawers, chairs ... Nobody will take a bed, on which you will not put your favorite mattress. “When entering the market, you need to clearly understand the standards for your product. Sometimes 1 cm or 10 grams can be crucial. Or one ingredient, color, texture of the fabric ... To sign a contract with you, you must initially change, tailor your product to the requirements of the market of this country. You should not show an exhibition sample and promise to reconfigure production lines after signing the contract. This contract will never be signed. Modify your production right away, prepare everything, and only then offer it, ”advises Irina Kobets.

Start with research
It is better to enter the Canadian market with goods of the middle and expensive segment. It makes no sense to compete with Turkey or China - the country, like ours, is oversaturated with cheap stuff. In addition, given the considerable costs of transporting and warehousing the goods, their delivery, it is better to plan smaller volumes and a large margin - the more profitable the business will be.
But even being in the middle and highest segments, Irina Kobets believes, it is necessary to approach pricing very competently. On the one hand, take risks into account, and on the other, be in the middle or below the average price level of your segment. Canadians choose primarily by price, especially if they are not familiar with the product, with its quality. The choice and purchase of food products by Canadian buyers in supermarkets is based on the following criteria in order of importance: price, taste / freshness, quality, calorie content / health benefits, safety.
Only after you win your loyal customer, you can gradually raise prices to the top of the bar. You need to clearly understand the portrait of your consumer, his preferences, to know the competitors and their range. To make sure that the product meets the expectations of your target audience, you need to test it on a correctly selected focus group. It is necessary to study demand and analyze competitors on the spot, i.e. in Canada, involving specialized agencies and organizations. It is important that the company has the opportunity to invest in such a study, because the method “at random” in this case will not work, the consultant states.

They don’t believe a word
No dealer or distributor will work with you if you do not have a Canadian certificate for each group of goods, and sometimes the name. Before starting to engage in product promotion and sales, the consultant advises to prepare all the necessary certificates and permits. “The country of registration of the trademark and production is also of great importance. Goods from Ukraine are perceived with distrust, except for representatives of the community. The rest will pay more, but buy Canadian. Sew clothes in Ukraine, sew buttons to her in Canada, and this will give you the right to write made in Canada on the price tag. It’s better to do expensive work in Ukraine, finalize and pack it in Canada, and use the opportunity to position yourself as a local brand, ”the interlocutor shares her experience.

Packaging and Information
It is important to indicate the clear purpose of the product and unacceptable use cases. This will protect you in legal, insurance cases. Do not think that the joke “don’t dry the cat in the microwave” in Canada is just as funny. Consumers are different, and someone will definitely do it, and you will pay not only for loss, but also for moral damage. Get safe wherever you can. Product description should be done in technical English. Think over the description of the product, taking into account your target audience, its expectations and vocabulary. Develop the most detailed instructions and precautions that go beyond common sense. Look for translators directly in the country, the Ukrainian version of English may look ridiculous. Remember the instructions translated from Chinese ... By the way, you should pay attention to the appearance of the package. If craft is in fashion in Ukraine, this does not mean at all that the Canadian will take a faded bag of juice “from recyclables” from the shelf.

Taxes and fees
Insurance is a considerable part of the costs for starting a business in Canada. When a company just opens, taxes and insurance are the highest for it. “The first year, Industrial insurance cost us $ 12,500. The second year - 8,200 only because during the year not one of the partner companies contacted on an insured event, my quality and my service suited them. The third year, if I develop in the same trend, my insurance will be 6,000, and ultimately I can reach the level of Canadian companies for which such insurance costs 3,800, ”Irina shares her experience.
Similarly, with everything else. Rent. Leasing for a year does not happen at all. It happens five, ten or more years. If you take it for 10 years, this opens up a credit of trust for you, it is a demonstration of your serious intentions. But you cannot “roll back” and terminate the contract. Even if your store goes bankrupt and closes, you continue to pay rent for it. In fact, Canadian companies are unprofitable for the first two to three years. But understanding the prospects of the market, business is taking this step.

How to start sales
First of all, it is necessary to ensure uninterrupted delivery and storage of products in the country. When these issues are resolved, the expert advises contacting local distributors. A typical distributor in Canada works with supermarket chains and small shops. Usually he has his own warehouses in different provinces for quick deliveries to different stores. Often, one distributor can work simultaneously in the markets of Canada and the USA, which can be very useful for potential expansion of the geography of sales.
Supermarkets are the main players through whose shelves 64% of food passes. The top 5 supermarkets in Canada, according to the annual turnover, include: Loblaw Cos. Ltd., Sobeys Inc., Metro Inc., Costco Canada Inc. and Walmart Canada Corp. Look for partners who will lead you to these networks. In this matter, as well as in many others related to the export of goods or services to Canada, the Canadian-Ukrainian Chamber of Commerce in the framework of the CUTIS project and the Office for the Promotion of Export of Ukraine https://epo.org.ua/ can significantly help you. . Obstacles are not so terrible if you know about them. Consider the features - and conquer new markets!