In an era when people are craving personalisation, digitisation and trust from the brands they use, the direct-to-consumer (D2C) proposition makes perfect sense. And for Swedish technology companies, those three characteristics just happen to be three of their most prized assets, too.
D2C’s rise to the fore over the past two years is no secret. With consumers living almost exclusively online during the pandemic, they were forced to establish new relationships with brands that could ensure product or service availability, a personalised offering off the back of any purchases and subscriptions, and more variety when it came to deliveries and fulfilment.
In this regard, D2C is now a preferred method to form relationships for both providers and customers. And relationships are formed out of trust – trust in what is being offered, trust that shared data will be used for good, and trust that their loyalty will continue to be rewarded.
This is where Sweden’s e-commerce offering has struck a chord, as an instinctively social-leaning country with a strong emphasis on democratisation, accessibility, equality, health and innovation. The result is a host of tech startups from the country adopting the D2C model as a way to better engage with consumers, and meet their current needs.
Amid this perfect blend of industry trend and ecosystem offering, there is every possibility that Sweden will be responsible for a future D2C unicorn.
Merging the physical and the digital
Health and fitness may not be the first sector that comes to mind when considering e-commerce opportunity, but it is in this space that Sweden has been able to flex its social muscles and its penchant for tech.
For Boxbollen, the offering initially appears in the simple form of a ball on the end of a string which users attach to themselves before seeing how many times they can pat or punch the ball before it “falls”. It is a concept that has captured the imagination of Swedes, as well as in the UK and Germany, and a US takeover is also now imminent.
“For us, our initial drivers were fitness and fun, creating a piece of hardware that could be used by absolutely everyone in a gamified way,” said co-founder Jacob Eriksson.
Jacob and his brother, Victor, both came from a sporting background, and the hardware alone gained initial traction back home in Sweden.
Victor recalled: “About 3,000 units were sold the first Christmas after forming. This rose to 6,000 the next Christmas. And then, the year after, we sold 40,000 units – a number that rose to 200,000 last Christmas.”
The reason for the sudden jump? Technology. As a D2C offering with only the hardware component, it was a fun, fitness-based entity that could rival similar pastimes on the market. But the subsequent unveiling of a free Boxbollen app transformed the proposition entirely, facilitating aspects of community, competition, accessibility, monitoring and sharing.
“It’s still just a ball on a string, but it’s the engagement that consumers are craving,” said Jacob. “We’re receiving feedback about how the product is aiding friendly competition and a sense of community, as well as with physical and mental health through its almost-meditative action.”
Proof of Boxbollen’s D2C success comes from the company’s numerous Boxball Open competitions, which have attracted thousands of competitors in national, continental and global events. People of all ages, genders and backgrounds have taken part, proving that Boxbollen has caught this trend at the right time, with the right product.
Of course, not all e-commerce services are geared towards a core mission of creating fun. The idea of a direct line between the buyer and the provider also holds huge potential for more intimate or sensitive services to be delivered in a discreet, digitised way.
For Mojo, this is exactly what the company set out to do via its at-home fertility kits for men. Again, founder and CEO Mohamed Taha sought to complement a much-needed physical product with a promise of advanced technology to ensure success of the overall solution.
Taha said: “What we provide is at-home sperm testing kits, which is completely novel in a space of healthcare that almost exclusively targets the women’s side of fertility in the form of IVF.
“We did this for two reasons. Firstly, simply because there is a massive need for such a solution to be made available, given how underexplored the male side of the equation is. But secondly, we also knew that a D2C approach to this issue would help to ensure that more men could get ahead of the curve and assess their fertility much earlier in the family planning process.”
Supporting the physical kits are teams of fertility experts housed in Mojo’s Stockholm and London labs, where patients’ samples are analysed and then fed back digitally to the user.
“Not only are health institutions traditionally leaving male fertility out of the testing process, but there is also a serious issue of men feeling sensitive or vulnerable about being checked,” said Taha. “Being able to liaise and work through the entire process with a dedicated team of both health and tech professionals, in a way that avoids awkward or scary trips to doctors’ offices, is very appealing to a lot of men.
“We can elevate accuracy levels through the product we’ve developed, while also offering a personalised and delicate service that can only come from more direct, one-on-one customer interaction. In that regard, D2C was the best way for us to meet this vital medical challenge.”
The next unicorn
Reaching unicorn status is a work in progress for companies like Mojo and Boxbollen, but there is no lack of evidence in Sweden that a mix of digital ingenuity, trend timeliness and social leaning can lead to global prominence. You only have to look to the Klarnas, Skypes and Spotifys of this world to see what can happen when these stars align.
Both Taha and the Eriksson brothers have leaned on the expertise and enthusiasm that exists across Sweden’s tech ecosystems and investor communities, to reach the stage they are now at. And there is every reason to believe that those platforms will generate further success in the years to come via the sought-after D2C model.
For Boxbollen, marketing partnerships with global celebrities and sports stars are already driving momentum. But internally, the focus is very much tech-driven.
“We know how vital the app was to ensuring traction, and 80% of our product development now goes towards that technology,” said Jacob Eriksson. “It was the app that unlocked the social and community aspects that people now look for from online brands, and it’s what will help drive our company forward in the future.”
For Mojo, the tech and medical capability is already market-leading, but it is again the way the company communicates and reaches out to people that has driven its success.
Taha said: “It’s a blend of tech, entrepreneurship and social problem-solving that suits today’s world so well, and that really suits the Swedish style.
“If I were to start a company anywhere in the world, I would always do so in Sweden – the investors have been there before, the talent out of universities is amazing, and there is a constant striving to do things right first time.
“Therefore, our D2C offering, with this set of characteristics, won’t stop at sperm. Before long, our unique and protected AI tech will also be used to analyse the health of biological material of all kinds, enabling us to create the world’s first “bio bank” for human cells and health data.”