Laurent Ferrara: "France still has strong assets, but its value-for-money image is eroding"

French products enjoy a strong reputation, but not on price

French products remain popular, yet they are often seen as overpriced. How do you explain this gap?

France performs well on non-price factors. In this study, we surveyed 480 importers operating across the European market about their perception of products from around ten countries or regions, including European countries, the United States, Japan, China and the rest of Asia.

Non-price competitiveness covers several dimensions: quality, ergonomics, innovation content, brand reputation, delivery times, associated services and supplier diversity. French products are well regarded across most of these criteria. In consumer goods, for instance, France scores strongly for reputation, innovation, delivery performance and product-related services.

However, once price is factored into the equation, France’s position weakens. In any import decision, what matters is the relationship between quality and price. Ultimately, it is this value-for-money ratio that determines whether an importer chooses a product.

The survey shows that France performs poorly on this measure. More importantly, perceptions of French value for money have deteriorated over the past twenty years. In fact, France is the country for which this ratio has declined the most in the eyes of European importers.

The conclusion is clear: French products continue to enjoy a strong reputation on non-price criteria, but they are increasingly perceived as too expensive relative to the quality they offer.

Moving upmarket remains the right strategy

With international competition intensifying, does a premium positioning still make sense?

Absolutely. In fact, it reflects a global trend. China provides a good example. The country has moved upmarket, significantly improving both the technology and quality of its products. To remain competitive in increasingly crowded markets, businesses need to focus on higher-value products rather than competing solely on low prices.

Since China joined the World Trade Organization in 2001, goods prices have fallen substantially. This phase of globalisation put downward pressure on the prices of consumer goods, capital goods and intermediate products, helping many countries, particularly in Europe, keep inflation under control.

Today, prices are back at the centre of the debate due to external shocks such as the wars in Ukraine and Iran, geopolitical tensions and climate-related disruptions. If we are entering a world where prices remain structurally higher than during the globalisation era, quality will become even more important.

Companies will not be able to charge higher prices while offering lower quality. The logical response is therefore to continue moving upmarket.

China is no longer just the world’s factory

Does China’s progress on quality criteria represent a turning point in global trade?

Yes, it marks a remarkable shift.

After joining the WTO in 2001, China initially gained market share by exporting low-cost products. During this period, it also benefited from technology transfers and learned from industrial products developed in G7 countries.

Today, the story is different. China continues to offer competitive prices, but product quality has improved significantly. This is particularly visible in industrial goods, machine tools and electric vehicles. Chinese products are now seen as high quality while remaining cheaper than many European alternatives.

This represents a real change in paradigm. China has moved upmarket without abandoning its price advantage.

This development is also linked to the structure of the Chinese economy. China faces significant overcapacity, producing more than its domestic market can absorb. As a result, it generates large trade surpluses, supported in some sectors by public subsidies. These surpluses are exported to major markets, particularly the United States and Europe.

As the United States raises tariff barriers, part of these trade flows is being redirected towards Europe. The European market is therefore increasingly exposed to Chinese products that combine quality with low prices.

This is reshaping global trade. China is moving upmarket, the United States is strengthening trade barriers and Europe finds itself caught between the two. As a result, competitiveness must now be assessed not only against individual countries, but against increasingly strategic economic blocs.

Why non-price competitiveness matters more than ever

In a context of trade tensions and geopolitical fragmentation, is non-price competitiveness becoming a strategic priority for Europe?

Yes. Product quality and the services that accompany it are becoming central competitive factors.

Even with higher tariff barriers, competition will not be determined by price alone. If countries continue raising barriers and prices increase, non-price factors will become even more important.

This requires a rethink of Europe’s strategy. We need to rebuild industrial capabilities, strengthen research and development and improve access to funding. It also means making clear industrial policy choices by identifying strategic sectors and concentrating resources where they matter most.

Industrial strength remains a strategic asset

In our survey, Germany offers an interesting example. German products are among the most expensive, yet they continue to rank highly on value for money because the perceived quality justifies the price.

A high price is not necessarily a problem if customers believe the quality is there.

Europe must continue to innovate, develop high-quality industrial products, keep costs under control where possible and invest heavily in sectors such as advanced technology.

France achieves this balance in certain industries, particularly luxury goods. Prices are high, but quality, reputation and perceived value sustain demand. The challenge is to extend this model to a broader range of industrial sectors.

“The European level is the right one”

What is the main lesson French policymakers should take from this study?

Industrial policy requires strategic choices. There is much discussion about reshoring production, but we need to be realistic. It will not be possible to bring all manufacturing back home. Global value chains are deeply integrated, and many countries have developed specialised expertise that would be difficult to replicate.

The real question is which sectors we want to prioritise. Health, energy, automotive and telecommunications are all possible candidates. These are fundamentally political and strategic choices.

In my view, the European level is the right one. Faced with competition from both China and the United States, Europe must develop an industrial strategy that allows it to remain a major player in an increasingly fragmented global economy.

Supplier diversity matters too

The study also highlights supplier diversity. Why is this criterion important?

Supplier diversity measures a country’s ability to offer importers a broad choice of suppliers.

France performs poorly on this indicator, whereas China ranks highly.

This reflects a deeper industrial reality. China’s industrial base has expanded, while France’s and, more broadly, Europe’s industrial base has contracted. Improving this indicator will require rebuilding industrial capacity and developing a stronger supplier ecosystem.

This is a crucial point. Competitiveness is not determined solely by individual products or brands. It also depends on the density of an industrial ecosystem, its ability to manufacture, deliver, support customers and offer alternatives.

Without this industrial depth, competing with major global players becomes increasingly difficult.

A race to the top, not the bottom

In summary, what direction should Europe take?

The answer lies in moving upwards: innovation, quality, services and a stronger industrial base.

France and Europe cannot compete on the lowest prices. Their competitiveness must rest on the ability to offer products whose quality justifies their price.

In a more fragmented world, where the United States is becoming more inward-looking, China continues to expand its influence and Europe remains one of the world’s largest markets, competitiveness has become a strategic issue. It concerns industrial sovereignty, economic resilience and Europe’s ability to shape the new global balance of power.