How Daniel Wellington Made a $200 Million Business Out?
Daniel Wellington may be among the most hyped Nordic companies around, but there’s some real substance behind it all, reveals Inc. 5000 Europe 2017 list.
The watch company, started by now 32-year old Swede Filip Tysander, was just ranked the fastest growing private company in Europe by Inc. The lists editors found that the company’s breakneck 3-year revenue growth amounted to almost 4,700% up until the end of 2015.
Tysander’s fascinating story is well-recorded. Having saved up some 200k SEK and launched his brand Daniel Wellington, Tysander left for a long trip. When he returned there were 600 orders waiting in his webshop. Three years later “DW” would be selling a million watches per year. Today DW is selling in more than 6000 shops in 75 countries, from Faroe Islands to Japan. What’s more, Tysander owns the entire company as he hasn’t used any external capital.
The rest of the Top 10 is dominated by Nordic companies; all but one of them Swedish. Two tech companies are among them; e-commerce company Furniture Box as well as Cabonline Technologies, which enables Swedish taxi companies to level the game with Uber with their app technology, according to NyTeknik.
Finnish tech company Odeal is an invoicing service that takes care of freelancers’ administrative tasks takes fourth place.
Here are Europe’s Top 10 Fastest growing private companies according to Inc:
Source: Inc. 5000 Europe 2017
Here are the four secrets to the success of the Swedish company:
1. Marketing.
Within Daniel Wellington, social media is viewed as part of the core business. They have systematically used influencer marketing to reach their customers. Instead of paying for ads they give away watches to influential Instagram stars, and in return these stars show the watches to their followers. Some of the bigger stars are paid in money.
There are almost a million media on Instagram tagged #danielwellington. The Daniel Wellington page has 3,5K media, which means that the rest was posted by the brand’s fans. The main motivation for them to use the hashtag is to win one of the several photo contests organized by DW. But even if they don’t win a photo contest, just the fact to be eventually reposted on a 2,4 millions followers page is motivating enough: the visibility of their Instagram page will anyway noticeably increase.
Daniel Wellinghton is the best example on how to create a virtuous social dynamic on Instagram: competitors in the same watch segment like MVMT, Cluse, Kapten & Son, Leny Harper are literally copy/cutting his strategy. But the strategy is so effective that also other sectors employ similar techniques.
2. Timing.
When Daniel Wellington was founded in 2011 the world economy had started to recover from the financial crisis and the watch industry has had healthy growth numbers ever since.
3. Distribution.
The watches are manufactured in Shenzhen, China. In the same city where many other brands manufacture their watches. Since the watches are made in China and use Japaneses quartz movements it allows the majority of the investment to be spent on advertising, adding to the high profit margin.
4. The price.
It’s a matter of definition whether Daniel Wellington watches are cheap. If you compare them to their competitors they are cheap. If you compare them to the cost of manufacturing a watch in China they are expensive.
Even so, the comparatively low selling-price of a Daniel Wellington watch is often said to be a success factor in reaching the millennial generation, and they proud to have it on there wirst with good quality and look.
