rom an impressive corner office at Daniel Wellington’s HQ, chief executive Tianhao Liu, designer Robert Bäcklund and I look out over the Stockholm waterfront and the astonishing red-brick Stockholm city hall – which celebrated its 100th anniversary in 2023.
The fashion-oriented watch brand founded by Filip Tysander in 2011, which today has around 200 employees globally (100 in Stockholm) and an offering of watches ranging in price from US$150 to $400, took off like a rocket in the 2010s.
Aggressive social media marketing, gold-coloured watches with a distinctive and minimalistic design, and Nato straps were some of the reasons the company swiftly racked up sales in the millions per year, in 100 countries. China is its most important single market, followed by Japan, Europe (France-Germany-Italy), India, and the Middle East, where Seddiqi & Sons is its trusted partner.
- Daniel Wellington chief executive Tianhao Liu
Another key ingredient was the targeting of a non-typical audience when it comes to watches: young women, who represent 60% of Daniel Wellington clients. This group, overlooked by most of the Swiss industry, helped propel Daniel Wellington into being Europe’s fastest-growing company in all categories in 2017, according to the Inc. 5000 Europe ranking.
In 2018, when Mr Liu oversaw operations in Asia and the Pacific, the company decided to ditch wholesale and build its own boutique network for direct distribution, a move which included opening 300 new points of sale (POS) in China.
Then came Covid.
A heavy beating
“2019 meant heavy investments in retail and offices around the world. And when Covid came, we took the whole beating ourselves, in all markets simultaneously. And that was just too much. We thought we could bear it for six or 12 months,” Mr Liu said.
As we now know, Covid lingered for much longer than that.
“In mid-2022 we made the decision that we could not operate all the stores ourselves. We had to change our business model and go back to distributors. We needed to share the risk,” said Mr Liu.
Before the disastrous 2018 decision to skip the middleman, Daniel Wellington had around 8,000 points of sale. Some 90% of those distributors are now back on the books. The brand has also formed several new partnerships, notably with Timex, a major player in India and the USA.
But even though the numbers for 2023 are expected to be back in the black after four tough years in the red, the number of stores is still lagging. At the beginning of 2023 there were 3,000 points of sale, and by the end of 2023 there will be around 4,500. The goal is to have 6,000 watch POS by mid-2024.
“This is a mix of monobrand and multibrand retailers. A majority is run by partners, some by us, others in a hybrid model,” explains Mr Liu, adding that around 30%-40% of global sales are online. He also said that more stores were about to open for a relatively new segment introduced in 2019 – jewellery. In addition to this, Daniel Wellington launched sunglasses this year, and the first handbags were introduced as part of the Autumn/Winter 2023/2024 collection. For the Japanese market it also launched its first clothing line, and there are collaborations with US designers in the pipeline, with a release date in early 2024.
“We are not only a watch brand. We are a brand that makes great accessories for people who want beautiful and fashionable accessories at a good price,” continued Mr Liu, referencing the biannual collection.
Nevertheless, watches still represent 70% of annual turnover, which was 1,1 billion SEK in 2022 (around 105 million USD), compared with around 2 billion SEK per year in the 2016–2018 period. But the return to wholesale is working: “2023 is our best year in five years, for sure,” said Mr Liu, who describes the return of former partners in a matter-of-fact manner. “If they still believe in the strength of a brand, they will go for it. It’s not personal – it’s all about business.”
Hip to be square
Today, the brand sells around one million watches per year, divided among approximately 200 references. These are, in fact, only six different models, in a few variations of metal platings and dials, along with a plethora of bands and bracelets. The six models are Classic, Petite, Quadro, Mini, Link and Chrono.
“Petite and Classic are our absolute bestsellers,” says Mr Liu, referring to the round, thin, simple yet distinctive collections. “In our segment we are one of the few brands that are instantly recognisable, even if you remove the logo,” he continues. In 2020 Daniel Wellington introduced square watches, and today the square Art Deco-ish Quadro and Mini (introduced in 2023) account for up to a third of the watches sold to the main target group of young women.
“We also tried with square watches for men, but they don’t perform as well. A square men’s watch is a niche product,” said Mr Liu. Those products are no longer available. Instead, Iconic Link and Iconic Chrono have become a popular choice for men. Iconic Link, equipped with a somewhat fuzzy cyclops over the date, is the brand’s only mechanical watch. Powered by an automatic Miyota movement, the watch introduced in 2019 is seen as a “statement piece.”
The oft-repeated rumours of Daniel Wellington’s first models being ready-made catalogue products with a logo swap are not true. Designer Robert Bäcklund talks of long design processes, with prototypes and samples being instrumental. According to Mr Bäcklund, the goal is to design a clean-cut, polished and understated watch that stands out when you look at it alone, but blends in with the wearer’s outfit and environment.
“Our founder, Filip Tysander, is very involved in the products, but since he doesn’t have the training or hands-on skills of a designer, it’s our role to turn Filip’s vision into products,” Mr Bäcklund confirms. He emphasises Mr Tysander’s extreme attention to detail: “I have seen Filip looking at 150 different shades of white for a dial before taking a decision.”
Since September 2023, the team has also offered Apple-compatible straps, mesh bracelets and cases for smartwatches. “Our watches and these products complement the smartwatch market,” explains Mr Liu.
Daniel Wellington may be a follower rather than a creator of product trends, but when it comes to social media, it is a pioneer. “We were probably the first brand in any industry on our scale who started with influencer marketing – the word influencer barely existed when we started.”
Today, TikTok and Instagram are the most important channels, along with Weibo in China and Line and Kakao in Asia. “We are going towards more and more moving material and video shorts. In some Eastern markets, long and entertaining live broadcasts [made with influencers or in-house], with or without the possibility to purchase watches during the session, are also very successful.” For its 12th anniversary Daniel Wellington reached out to former influencers including Swedish supermodel Elsa Hosk, who alongside Kylie Jenner popularised the Petite collection.
Mr Liu expects a return to profitability in 2023. “The year has been good so far, and if Christmas season sales follow expectations, we will. But with the current situation in the world – inflation and weak currency – it’s still too early to say,” he said when I interviewed him at the beginning of November. “However, one thing is clear. Now we stand stable after Covid, and we look forward to the coming 12 years. Daniel Wellington is still a young and hungry company!”