Expanding your business into new territories can be challenging. Gaining customer loyalty in a business environment in which you are unfamiliar, whilst trying to understand the practical aspects of doing business in that country, can be somewhat overwhelming. As a service provider helping overseas companies expand to the UK, Goodwille are familiar with the potential setbacks businesses face.

The UK market is fast-paced and competitive, so having a lean business model gives businesses the ability to quickly adapt to sudden change. This is something that Swedish fitness brand Eleiko experienced first-hand during their UK expansion.

About Eleiko

Swedish Eleiko has a long history in their domestic market. You might recognise their name from the barbells at your local gym, or even from an old waffle iron – in fact, Eleiko started off with manufacturing small electrical appliances for decades before switching to their current industry in 1957. More than 60 years later, the company is still going strong in the strength equipment, apparel and education segments, and have supported multiple world championships and Olympic games within the weightlifting category.

Not only is the UK fitness industry one of the most influential in the world – but its size and potential is what made the UK market highly attractive for Eleiko’s global expansion plans.

Entering The UK

Eleiko were active in the UK for 25 years through a distributor before taking on their first local employee in 2017.

It was a familiar story for Goodwille. A business that had gained some traction in the UK market via a distributor, who, over a period of time, had slowly become less engaged and were not reaching their full potential in the market. When the timing was right to hire their own sales team, Eleiko broadly struggled with two challenges – to increase their margins and achieve local brand awareness.

Dale Beech, Managing Director of Eleiko UK, was one of the first people to come onboard. During the first few years, the local employees put a lot of time and effort into marketing, product placement and linking with strategic clients – something that had not been done successfully over recent years.

“The biggest challenge we had was the brand perception. Anybody who had heard of the brand associated it with being extremely expensive, which really isn’t true”.

Today, the company has built a reputable and respected brand. They have landed key clients such as Gym Box, Third Space and David Lloyd, and partnered with world renowned fitness brands such as Gymshark.
“By having a subsidiary here in the UK, we could start engaging with local authorities a lot easier than dealing with everything from overseas”, Dale adds. “We have found efficiencies in the way we work, helping to increase our margins and using Goodwille’s services provides us with a lean model which is proving very profitable.”

Since setting up independently, they have seen 100% growth year-on-year. Considering the current business climate, one would expect anything but growth. But for Eleiko, in fact, 2020 is looking even more promising than previous years.

“My biggest mistake when setting up our UK subsidiary was trying to wrap my head around everything myself – and ultimately wasting a lot of time doing it. When we engaged Goodwille, everything just became so much easier. I was trusted by our headquarters in Sweden to setup the operation in a new territory, and to do that quickly and effectively I needed experts.

The pitch was made to us as ‘it is like an extension of your business’ – working with the Goodwille team really does feel like that. They take a sincere interest in our business and know exactly where our UK business is going. Without Goodwille supporting us with our expansion, we would not be where we are today.”

Success In The
Midst of A Pandemic

Covid-19 hit globally during the early months of 2020. The pandemic lead to temporary, in some cases even permanent, closures of businesses worldwide. In the UK, entertainment venues went into lockdown as of 23 March, only to reopen – with restrictions – in late July the same year.

As their primary clients are gyms & fitness centres, naturally, Eleiko’s business would be suffering during these times. However – when all gyms closed and people started working out from home instead, the company noticed a sudden change in demand. From normally receiving between 40-50 enquiries per week from individuals for consumer type products, they received close to 6,000 during the first month of gym closures.

Traditionally, Eleiko had been a B2B company, so their infrastructure and website were not adapted to a consumer market. The switch in demand due to Covid-19 is what finally triggered a prior intention of starting a consumer friendly ecommerce website.

The team acted fast – the new website was built and up and running in just three weeks’ time. For Goodwille, who supports the company’s financial matters, the situation also meant adapting processes and finding solutions to quickly and effectively account for significantly more sales invoices than previous months.

Despite not selling to any gyms for the past three months, the UK team have exceeded their targets and experienced record-breaking months back-to-back. Dale Beech again;
“The UK business is effectively leading Europe when it comes to consumer sales”, “In terms of web sales, I think 90% of Europe is coming from the UK”.

Moving Forward

As of July 2020, businesses are slowly but surely reopening, though Eleiko will keep accommodating the home user by adjusting their product development, service and operations accordingly. They are planning to further expand their local team to keep building relationships with their most influential clients.

In an ever-changing world, it is hard to predict even the foreseeable future. In the case of Eleiko, their agility and timely response to customer demand is what seems to have been important factors in their recipe for long-term success. In a matter of weeks, the UK team of Eleiko impressively switched their operations entirely to adjust from a strictly B2B company, to a B2C one – a journey on which they will continue.

At Goodwille, we are proud to be supporting Eleiko with their non-core activities here in the UK, so that they can continue to focus on developing their business and products, and to form the future of their industry.

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