Delugs: Using audience insights to inform strategy

How did a fledgling watch strap business with no prior experience or contacts within the industry grow into an international success story? By understanding the target market and speaking the customer's language. Their approach is a clear confirmation of the effectiveness of the core Building Blocks described in our whitepaper, Global Expansion Simplified: A Guide for SMEs. Read on – and take notes!

Watch them go international

Delugs had their first sale in Singapore and then gradually pursued an international customer base. They decided on a generic approach to marketing by focusing on social media platforms – in particular, Instagram. There they built a community of watch enthusiasts and quickly realized that local differences within this target group were limited; the commonality of being a watch lover was more unifying than geographical location. This led them to post the same type of content and ads for everyone, regardless of their location. Today, Delugs’ primary channel for reaching new customers is still social media.

Knowing your target audience gives you more insights for market research

Customers in the luxury brand category expect superior customer service and first-class quality. Actively monitoring the activities of other businesses within their industry to understand consumer expectations, is thus crucial for Delugs. Additionally, market research allows the brand to identify trends and capitalize on them. For example, the introduction of smart watches with interchangeable straps was a significant step in the watch industry and an even bigger one for Delugs’ vision of making interchangeable straps a lifestyle. Delugs understands the influence these industry developments have on their business and uses their analytical skills to be prepared when trend-setting events occur.

Teamwork makes the dream work

Delugs believe that everyone in their team should be passionate about what they do and feel good at work, never having to experience the so-called Monday blues. How do you build a team like that? For Ken, passion is one of the most important factors; it is something you cannot teach and must be brought to the table from the start. Other, more practical skills can be learned. The founders look for the ability and willingness to learn in new team members. They want their team to be open and honest, to challenge each other, think differently, and bring in new ideas.

Speaking your customers' language

Recently, Delugs have been experiencing the natural limit of their reliance on an English-only website and business. Their biggest market is the US but, driven by a continuous learning and adaptability approach, the founders are currently working on a new strategy to reach non-English-speaking areas. This adaptability is evident in their curiosity about other (offline) channels in markets where customers are not as inclined to shop online.

One of the aspects that drives these decisions is the feedback the brand receives from their customers and the community they have grown on social media. With every batch of watch straps they produce, they implement new improvements, even if they are marginal enough to be overlooked by most customers.

No network, no chance

When starting Delugs, the founders had no contacts within the watch industry – which Ken saw as an opportunity to think creatively. They used social media to build an engaged community, and recruited brand ambassadors to spread awareness further.

Over time, Delugs have established a larger network of producers, crafters, suppliers, and retailers who serve as connections to new leads in more countries and markets. For example, they were able to enter the Middle East and North African (MENA) region through a partner in Qatar who wanted to become a watch strap retailer for the brand. The same partner then introduced Delugs to contacts in surrounding countries like Kuwait and Bahrain.

The founders highlight the importance of building relationships with their partners and suppliers, which enables their organic growth, especially in a luxury industry. For Delugs, it is important to have proactive partners who like to challenge assumptions and foster quicker improvements and innovation.

Choosing the right path to global markets

As Delugs started as a passion project from home, Pei and Ken made use of the resources they had, tapping into the possibilities social media offered. This choice exposed them to a worldwide audience, meaning exporting their products was a natural decision. They started with local postal delivery but quickly recognized the limitations of this approach when packages got lost or arrived late – highlighting the importance of choosing the right exporting partner.

With the growth of the business and the choice of DHL Express as their international carrier, Delugs was able to provide excellent service to their customers while keeping the exporting approach feasible on a larger scale. Furthermore, the brand realized that different markets required different entry modes. In the MENA region, for example, leveraging relationships and strategic partnerships was the best route to reach customers. These strategic choices show the importance of avoiding a “one-size-fits-all” approach when expanding into new markets.

Tackling international regulations and sustainability demands

Exporting to international markets can pose challenges to SMEs. Some countries have higher thresholds in terms of additional taxes and import tariffs, which limit Delugs' options for shipping to specific areas while maintaining an affordable price for their products.

Sometimes, governments adapt their regulations to address trends or larger issues such as sustainability. In Delugs' case, some countries are moving away from certain types of leather, leading customers to ask for sustainable solutions.

To meet these expectations, founder Pei states:
“When we craft our product, we make sure that they last a long time. We are not aiming for fast fashion; we want products that truly last.”

Additionally, Delugs is exploring options to adapt to new regulations and to be at the forefront of more sustainable solutions. They are exploring different raw materials, textile options and even plant-based straps. In doing so, they are not only complying with laws and regulations but are also anticipating the future buying behavior of their core audience.

Delugs’ path to a reliable and scalable supply chain

Delugs first decided to deliver their products with a local postal service, which was unreliable and led to the business having to track lost packages – an undesirable situation for a luxury brand to find itself in.

 “Pre-covid, we shipped out international orders using postal service but that was very slow,” explains Ken. “During covid it became totally unreliable, so we had to switch to using a courier service and I think that is where I discovered DHL, they really helped us to reach an international community.”

Partnering with DHL Express has enabled Delugs to improve their flexibility and scalability while ensuring timely delivery. With DHL Express’ experience in international logistics – and of course, speedy delivery – Delugs was reassured their customers were in safe hands, and allowed the founding team to focus on the strategic development of the brand and products.

If you never try, you'll never know!

The founders emphasize that it is important to know when to take risks and where to place a safe bet. For example, if operations are running smoothly, there is no need to change things. However, on social media, where new trends are constantly appearing, there is no steady formula for a good post or a viral reach. That is why Delugs stays open to playing with new ideas in marketing; to doing things differently and allowing for experiments. Their advice to other founders is to think outside the box!

During their journey, the founders also learned that prioritizing is an important skill. As a small business, you cannot do everything at the same time, you need to know when to say “no.”

Finally, be bold. Ken and Pei emphasize that you must believe it is possible to expand your business internationally – because if you never try, you'll never know.