Birth of brand Pandora
By Coleby Nicholson
The success of Pandora Jewelry has largely been an enigma; but many credit the company for pioneering a brand revolution in the Australian jewellery industry. COLEBY NICHOLSON meets the man behind the tiny little charms that became a worldwide phenomenon.
Many people, including marketers, do not understand branding. More than a logo, label or trademark, brands instil a feeling in consumers, making an indelible impression upon users so passionate that the emotion of the product transcends the product itself. But brand recognition from one market does not transfer automatically to another. Therefore, a brand can be hugely successful in one country and not another. In fact, a deeply entrenched brand in one country, often has to start over as "just another product" when it enters a new market. It must then work hard to gain brand status.
Believe it or not, there was a time when nobody knew Pandora Jewelry. That time was only four years ago. Ask Pandora founder Per Enevoldsen if he ever thought the business he started in Copenhagen in 1979 would become a worldwide phenomenon and he laughs.
"At no stage did I ever dream Pandora would become what it has," he says. "One of the reasons is that we have always been too busy concentrating on new designs and product quality, that the success sneaks-up on you."
If you call doubling sales every year since 2000 a sneak-up, then that's exactly what Pandora did. From a modest turnover of around $US4.5 million in 2000, retail sales have grown to over $US500 million in 2007.
One's first impression of Enevoldsen is that he's not flamboyant by any means, quickly apologising for his "poor English" even if there is no need to do so. As any production-minded person would be, he is matter-of-fact in explaining everything.
The business started in 1979, when Enevoldsen had a small jewellery shop in Copenhagen. Then a goldsmith, he began importing jewellery from Thailand in 1982. Along the way, he began arranging for his own designs to be made.
After various attempts at managing production from afar, and with sales steadily increasing, Enevoldsen decided to establish his own manufacturing facilities in Bangkok.
In 1989, he moved to Thailand with his wife Winnie and set-up a small manufacturing facility in Bangkok, employing 10 people.
Ten years later, the business' first charm bracelet appeared. Still, this wasn't the Pandora everyone knows today. For starters, it didn't yet have the Pandora name.
While he would not have realised it then - nor would it have concerned him - Enevoldsen was on the cusp of a brand revolution in the jewellery market. Like a true craftsman, it was the product and not the market that was taking all of his attention.
Like many artisans, Enevoldsen is obsessed with quality. He still holds managerial control of Pandora's Bangkok factory that today employs over 1,400 workers across two shifts.
"In March 2000, things really started to take-off," he says, comparing Pandora's then operations with those of the previous 18 years.
Asked if he recognised the tipping point for the success of the new Pandora range - the moment at which he realised he was onto something amazing - Enevoldsen shakes his head. "We were still concentrating on controlling growth because sales were increasing dramatically, so if there was a tipping point maybe that was it."
But he did recognise that things were taking-off when Pandora partnered a local US company to enter that market, though he certainly wasn't thinking about a worldwide brand at that point. Many entrepreneurs must come to grips with controlling growth in the early stages of their businesses, and Pandora was no exception. "I felt it important to control our growth and ensure we always delivered on product quality."
Despite Pandora already establishing brand awareness in certain countries outside Denmark, success in Australia was not guaranteed.
Danish expatriate Karin Adcock convinced Pandora to grant her the Australian distribution rights in 2004. "A friend of mine had told me about Pandora being very popular in Denmark and suggested that I take a look at it," Adcock says. She knew I was looking for something to import."
Speak to Adcock about the early days and she will tell you how hard it was launching the product in Australia. Like Enevoldsen, she too was more concerned with sales than brand building in the early days.
"It was very difficult. We knocked on many doors and got rejected by so many retailers," Adcock explains. "If we had listened to them, we would have had to pack-up the concept and send it back to Denmark but that was not an option for us."
By Christmas 2004, Pandora had just four Australian accounts - and this was a multi-million-dollar international brand. The story of Pandora's Australian success is another example of how passion for a product can overcome the initial disillusionment.
"The first year we started 40 accounts and I personally opened 36 of them," Adcock says. "It was very difficult and Melbourne was the hardest place to get started. I walked the streets of Melbourne for three days from 7am to 11pm to find suitable stores, but they all said, "Nice but not for us. I got just one new account over the three days."
Ask any retailer who now stocks Pandora what they think and you will hear all about the success of that unique, little charm bracelet.
Indeed, in 2007, Australia became the third-largest market for Pandora worldwide, overtaking Holland.
Asked why he thinks Australia now falls just behind the US and Germany despite its relatively small population, Enevoldsen says he's unsure.
But that's another enigma about brands - they capture each consumer's heart to differing levels. And while company management plays an integral role in a brand's success in a given market, it's ultimately the consumers who decide whether they connect and associate with the brand.
"Creating the brand was all about awareness and we did that on all levels," Adcock says. "Although we thought we did a lot of branding awareness in the beginning, we have over the last years learned to refine our branding much further.
"We have been working with a strong marketing plan which has constantly evolved as the brand has grown from a small jewellery company with five staff in Denmark to a global company with more than 1800 staff worldwide," she said.
Was it a mistake for for Pandora to appoint a local, independent distributor in Australia rather than a partner?
"No," Enevoldsen chuckles. "Australia is too far away."
Just as he never set out to establish a worldwide jewellery brand, nor ever imagined that it would happen, Enevoldsen never dreamt that Australia would become so important to his business.
Pandora Australia less than four years old, employs over 50 staff and has many hundreds of accounts. It is far from the first jewellery brand in Australia, but it has gone a long way to setting the benchmark for new entrants.
Perhaps its success and the success of branded jewellery overall is best illustrated when one considers that retailers no longer ask, "Who is Pandora?"
They now ask, "Who is the next Pandora?"
More reading: The Pandora phenomenon
Posted August 16, 2009