A true pioneer in digital marketing
The entrepreneur Folke Engholm helped to successfully launch the Daniel Wellington brand in Asia and, over the past three years, his company Viral Access has become Asia’s leading influencer marketing firm.
TEXT: Jan Hökerberg
17 DECEMBER, 2018
Like many result-driven entrepreneurs, Folke Engholm started to do business as a child, when he repaired skateboards and sold them for a profit. Later, he founded a contemporary clothing brand and, since 2015, he has been running Asia’s leading influencer marketing firm, Viral Access, from his base in the dynamic city of Shenzhen, where he lives with his Swedish wife Hale and their two children, Céline, who is four years old, and Melvin, who has just turned three.
Engholm first became interested in China in 1998, when he was writing a thesis at Södertörn University in Stockholm about the Swedish television game show and lottery, BingoLotto, which at that time was testing the possibility of establishing itself in China.
“It opened my eyes about what was happening in China. The country was on its way to join the World Trade Organisation (WTO) and if China, as a result of that, would further open up it would become such a big market. But at that time nobody really thought of China as a consumer market. It was all about low-cost production in China and selling at a higher price in Europe,” he says.
Engholm was born in 1977 and grew up in Märsta, north of Stockholm. He has always had a deep interest in economics and for doing business. He has Bachelor’s degrees in both business administration and history and took his Master’s in international business, specialising in Chinese business and negotiation, at Bond University on the Gold Coast, Australia, while at the same time learning Mandarin.
Then, in 2004, he was selected for a scholarship at the prestigious Tsinghua University in Beijing, where he completed his Master of Business Administration (MBA) degree combined with further studies in the Chinese language.
“At that time, my interest in China grew substantially because I could see how fast everything was changing there. It excited me, so I decided to stay,” he says.
The number of influencers Viral Access currently has in its network.
In 2006, he started a company in Shenzhen and launched a clothing retail brand, called d.brand – the “d” stands for denim since middle-segment jeans were initially the leading product. The garments were produced in China and exported to Sweden. Later, down jackets became the bestsellers. Today, Engholm has sold all his shares in the company to the two partners he started it with.
When d.brand was launched in the US, Engholm spent three years in New York City. As he was poised to move back to Shenzhen, he met with Filip Tysander, the founder of the Swedish watch brand Daniel Wellington. Tysander asked whether Engholm was willing to handle their production in China and be responsible for quality control.
“We had both worked quite aggressively with influencer marketing, even if it wasn’t an expression at that time. But d.brand had been successful in sponsoring news anchors and weather girls, among others, at Swedish television channels with our clothes. Filip had also come to understand that you could go far by working with opinion leaders, which attracted me and we started to work together,” says Engholm.
In 2013, he founded a company in Shenzhen, which – besides handling the production and quality control of Daniel Wellington’s products – was responsible for the marketing of the brand in Asia, solely through social media and influencers.
“In eight weeks we hired 15 employees for a team that that was focused purely on marketing the Daniel Wellington brand. We started with the Chinese market, and when we could see that it worked well there, we tested other Asian markets such as Japan and South Korea,” says Engholm.
“Japan developed quickly into a very successful case. When we started, it was Daniel Wellington’s 28th biggest market. After six months, it had become their third biggest market worldwide,” he says.
“We grew together with the client and expanded further by taking over Daniel Wellington’s e-commerce business in Asia. In less than two years, our share of the company’s total online sales had grown to 30 per cent,” says Engholm.
We have been lucky to be at the right place with the right type of product in the right moment of time.”
However, different views on how both companies should handle future Asian operations led to a mutual decision to terminate the partnership in 2015.
“At that time, we didn’t have any other customers, but since we had experienced what we could achieve with Daniel Wellington we had great confidence and knew what we could do. We had successfully established a brand that had previously been unknown in the Asian market, and that got me to thinking about what more can we could do if we were to work with well-known brands,” says Engholm.
In the beginning, however, it was difficult to find new customers. Potential clients were not as receptive to marketing through digital channels, social media and influencers as Engholm had thought they would be.
“It was a reality check for me and I grew to quickly learn that we needed funding from external investors if we were going to survive. I went to Sweden and managed to raise capital from 10 investors, allowing me to keep our key company staff,” he says.
Within a year or two, the company was profitable again and over the past year the market has accelerated at a very fast pace. Today, the company works with customers such as Spotify, GAP, EF, Mercedes-Benz, Paul Hewitt, 6ixty8ight and many more.
Viral Access now employs 120 people but Engholm expects that number to increase to 200 within the next six months. The company has developed a software platform to handle the volume of around 110,000 influencers in its network, or micro-influencers as the company prefers to call them since they are not celebrities. The company is responsible for around 60,000 client campaigns and produces some 12,000 content pieces per month.
“Today, we don’t need to explain to clients about the necessity of having a digital presence. Influencer marketing is now well-recognised as an important digital marketing tool. Digital marketing has surpassed traditional marketing and that trend will only continue. We have been lucky to be at the right place with the right type of product in the right moment of time,” says Engholm.
3 tips for working with influencer marketing in China
- Conversion rate before followers. Be sure to measure performance rather than just choosing influencers with the most followers.
- Get the right mix for your campaign. Influencers can be compared to a portfolio of stocks – some are high-risk, some are low-risk.
- Content is king. Build real and authentic relationships with influencers to secure emotional and detailed content rather than posts just written like a paid endorsement.