Germany: Reaching the consumer

Consumer Profile

According to Eurostat, in 2021, the median age of the population was 45.9, the third oldest population in the world. The population is aging, since the median age was 44.3 years in 2010. Germany's population rose by 50,000 (+0.06%) between 2021 and 2022. While 13.8% of the population is under 15 years old, 64.2% is between 15 and 64 years old and 22% is over 65 years old (Eurostat, 2021). On average in 2020, households are made up of 2 people while 39.7% of households are people living alone, mostly women (Eurostat). The Federal Statistical Office (Destatis) also reports that the number of one-person households is expected to rise in the near future. The population is 49.5% men and 50.5% women (Data Reportal, 2022). It is estimated that 13.7% of German population is foreign and 77.6% of the population lives in urban areas, and the cities of Berlin Hamburg, Munich and Cologne are the most populated (CIA). Germany has one of the highest levels of education: 86% of people aged 25 to 64 have completed upper secondary education, higher than the OECD average of 79%. Moreover, the proportion of upper secondary students enrolled in vocational programmes (48.1%) is higher than the OECD average (42.5%). Among the active population, some 21.5% are working as professionals, 20.9% are technicians, 13.2% are service and sales workers, 13.2% are clerical support workers, 11.6% are craft workers, 7.1% have elementary occupations, 5.9% are plant and machine operators, 4% are managers, and 1.2% are agricultural workers (Eurostat, 2021).

Purchasing Power

According to the Word Bank, GDP per capita PPP was estimated at USD 54,844.5 in 2020. The average household disposable income per capita is USD 38,971 a year, more than the OECD average of USD 30,490 a year (OECD, 2020). Germans have an average per capita purchasing power of EUR 24,807 in 2022 according to GfK’s latest purchasing power study. Private consumption expenditure was EUR 2,507 in 2020, according to Destatis. In 2021, it was still 5% below pre-crisis level (Destatis). The Gini index is 0.31, and fits into European averages (World Bank). Wage inequalities between men and women have been decreasing since 2014. According to Destatis, women in Germany earned 18% less than men in 2021. The earnings difference between men and women, the unadjusted gender pay gap, remained unchanged compared to the previous year. Women earned an average EUR 19.12 per hour in gross terms, that is EUR 4.08 less than men (EUR 23.20). In addition, the risk of poverty rate is higher for women, over 65s and non-Germans. In total, 24% of the population is at risk of poverty or social exclusion (Destatis).

Consumer Behaviour

Germany is a mass consumer society. Before making a purchase, beyond the price, German consumers like to learn as much as possible about other similar products, features, provenance etc. According to some studies, German consumers are among the most demanding in the world. Some consumers are willing to pay more for a better quality product. After dropping during the Covid-19 pandemic, consumer confidence increased in 2021, thanks to falling Covid-19 infection incidence rates and relaxed restrictive measures (HDE). It deteriorated again in 2022 in the context of the war in Ukraine. Online shopping has become the norm in Germany and the country is Europe's largest online market. The Covid-19 pandemic further accentuated the digitalisation trend. Consumers are relatively open to the products of international companies. However, local, national and European products may sometimes be preferred. Germans are relatively loyal to brands if it is a quality product. About 60% of the population is willing to buy the same brand several times in this case. Social networks are a useful way to learn about products, but also in the discovery process. Comments left by other users can determine a purchase decision. However, due to concerns about data collection by companies, Germans can be passive users of social networks.

Environmental awareness is common among German consumers. This is reflected in consumption, with the development of organic products, vegan, using little energy etc. In addition, local product consumption attracts some consumers who are willing to pay more for it. The second-hand market is very widespread in Germany, especially in the big cities, for economic, ecological and social reasons. This translates with the purchase in fripperies, second-hand stores but also with online exchanges. The collaborative economy is widely developed, both with VTC platforms, apartment rentals and carpooling.

Consumer Recourse to Credit

Germany is a country where cash payment is widespread. Debit cards are used and widely accepted, although there are places where only cash is accepted. Credit cards are less common and may be refused in some establishments such as small shops, restaurants and hotels. Household debt to GDP is down in Germany (52.5% of GDP in the second quarter of 2018). Debt is composed of long-term debt (real estate), which is rising, and short-term debts (consumer loans) which are declining. The Germans have about 760 euros of debt per person in 2018. The level of household debt is relatively low compared to other European countries with real estate debt being lower and therefore consumers need for less loans. The majority of loans are provided by banks and traditional banking providers. Loans are used to finance housing, white goods (refrigerators, washing machines, electronic products). The trend should continue in 2019, with an increase in mortgage loans but a slowdown in consumer credit. In the second quarter of 2018, German households contracted 11.8 billion euros of new loans.

Growing Sectors

Leisure and culture, education services, vehicles, catering services, accommodation services, telephony, dishes and household utensils, garden equipment, audio-visual equipment, food and footwear.

Consumers Associations

VZBV , Federation of German Consumer Associations
TEST , Product Testing Foundation
Verbraucher , Consumer Initiative

Population in Figures

Total Population:

84,079,811

Urban Population:

77.6%

Rural Population:

22.4%

Density of Population:

238 Inhab./km²

Men (in %)

48.9%

Women (in %)

50.7%

Natural increase:

1.06%

Medium Age:

42.0

Ethnic Origins:

According to German authorities, over 91% of the population is of German origin. The largest ethnic group of non-German origin are the Turkish, comprising over 3% of the population. About 6% of the population is made up of individuals of Greek, Italian, Polish, Russian, Serbo-Croatian and Spanish origin. In 2019, Germany absorbed around 1.5 million migrants (more than 1% of its population), primarily from Syria, Iraq and Afghanistan. (Federal Statistical Office of Germany)

Population of main metropolitan areas

Source: Citypopulation.de, Latest data available.

Age of the Population

Source: World Bank, Latest data available.

Consumption Expenditure

Media in Which to Advertise

Television

National or regional impact according to the channel chosen. About 90% of German households is equipped with cable or satellite television. Germans spend an average of over three and a half hours (223 minutes) watching television. Advertising revenue on commercial TV channels was 4.4 billion Euros in 2014.

Main Televisions
ARD (Assoc. Of Publ. Broadcasting Of Germany)
ARD/MDR-Mitteldeutscher Rundfunk
DCTP
Sport 1
Hamburg 1
Kabel Eins
N-TV Nachrichten-fernsehen
Prosieben Media AG
RTL Television
Spiegel TV GMBH
VOX
WDR
ZDF (Zweites Deutsches Fernsehen)

Press

National or regional impact according to the newspaper chosen.

Main Newspapers
Allgemeine Zeïtung
Bild Zeïtung ( in german)
Frankfurter Allgemeine Zeïtung

Mail

Advertising in letter boxes comprises mostly of discounters and supermarket sales. It allows to reach a maximum of consumers, but is often considered junk mail. Be aware that these will most likely be rejected.

In Transportation Venues

It is possible to advertise on 4x3 billboards, on tramways, taxis, huge canvasses on buildings. A large part of mobile consumers is thus reached.

Market Leaders:
Wall AG ( in german)
awk Aussenwerbung GmbH

Radio

National impact. Radio is a mass media that connects with consumers all day long. About 80% of people over 14 years of age regularly listen to the radio. Radio advertising revenue is on the increase, with about 780 million Euro in 2017.

Main Radios
Antenne Saar
Deutschland Radio
UnserDing

Web

Is in great expansion. About 88% of German national are connected to Internet. In 2016, they spent an average of over 2 hours a day surfing the net. Internet advertising revenue is on the increase, and benefits from the decrease in printed advertising.

Market Leaders:
Youtube
Facebook
1&1 Mail & Media GmbH

Main Advertising Agencies

OMD media agency
Mind Share media agency
Bader Media agency (in german)
Gesamtverband Kommunikationsagenturen GWA e.V

Main Principles of Advertising Regulations

Beverages/Alcohol

Find all the necessary information on the Alkohol und Werbung website. Germany applies the European labelling guidelines regarding health and nutrition claims.

Cigarettes

For years, Germany had a very tolerant approach to the advertising of cigarettes. Since the 29th of December 2006, Germany applies the European Directive on the prohibition of cigarette advertising in printed media, radio and internet. Sponsoring is also prohibited. More information on: DZV Deutscher Zigarettenverband.
A revised Tobacco Products Directive has been adopted and must now be transposed into national legislation by the Member States by 2016.

Pharmaceuticals/Drugs

Germany is governed by the "Heilmittelwerbegesetz" (HWG) law, which has been followed European law since 2005. View the list of "Krankheitsliste" illnesses for which the advertising medicines is authorized. At the EU level, the advertising of medicinal products for human use is regulated by the Council Directive 2001/83/CE as amended byDirective à2004/27/CE.

Other Rules

The protection of children and the youth applies in particular to foodstuffs and alcoholic beverages. For more information, please visit the German Advertising Standards Council.

Use of Foreign Languages in Advertisement

German. It is possible to use foreign languages.

Organizations Regulating Advertising

Arbeitsgemeinschaft der Landesmedienanstalten (ALM)
Zentralverband der deutschen Werbewirtschaft e.v. (ZAW)
Der Deutsche Werberat
European Advertising Standards Alliance (EASA)