2021 has been a successful year for the mattress brands due to the increased demand for their products through e-commerce channels. Not just metro cities, but Tier-I and Tier-II residents seem to have also become increasingly conscious of the various offerings the mattress brands bring to the fore.
The success is evident from the fact that the unorganized sector in the Indian mattress market though has an upper hand, the growth rate as compared to the organized sector has been very less. In the last five years, the unorganized sector has grown at the CAGR of around 9 percent in terms of value which is way slower than that of the organized sector, which grew by 17 percent in the last 5 years, as per a report by Research and Markets.
Duroflex, The Sleep Company, Centuary Mattress, Livpure, Wakefit, etc. are some of the known brands in the industry. Riding on the growth they have achieved this year, most have set forth capacity-building plans at scale.
Legacy brand Centuary Mattress has experienced a massive demand rebound in 2021 in spite of the second wave and localized lockdowns. The company clocked a 40 percent jump in revenue, on the back of pent-up demand, digital access, and targeted marketing campaigns of the brand, the company stated.
“The company is working aggressively on capacity expansion plans to support the growth seen in retail, e-commerce, and export verticals, which are likely to be funded through internal accruals. The plan is to ramp up mattress production capacity from current availability of 50,000 units/month to 75,000 units/month,” says Uttam Malani, Executive director, Centuary Mattress.
Another popular name in the industry - The Sleep Company, has claimed to have clocked 10X growth compared to the pre-pandemic levels and is currently one of Amazon's top four brands as well as the highest-rated mattress brand in the entire digital marketplace.
Priyanka Salot, Co-Founder, The Sleep Company said, “We’ve grown tremendously by achieving a Rs 100 crore annual run rate by the end of November 2021 and from a small team of experts to now an operation of over 100+ with over 20,000 customers.”
Such demand would not be possible without a change in consumer perception and awareness of what these brands are offering. The growth in the D2C line of the business ecosystem cannot be undermined to be the main facilitator in the growth in the e-commerce mattress segment.
“The last year and a half have helped create a significant shift in consumer perception when it comes to lifestyle products that offer a very specific health-related value proposition. And fortunately, this change in perception was serendipitously met with the rise of the online mattress market powered by D2C,” Salot further said.
In fact, this change has given rise to new-age consumers who are product savvy, quality-conscious and are willing to go on the internet and look for a product offering the best quality and technology.
The Sleep Company informed such a customer is seen across the board coming from Tier-II and Tier-III cities and not just from metros. Similar metrics have been reported by other mattress brands as well.
Despite the growth, the sector has also seen setbacks due to inflation, like other manufacturing segments. This causes a hindrance in increasing the efficiency of an organization.
The Gurugram-based mattress brand Livpure, which rapidly has made a name in the sleep business, has experienced sales growth of 10 to 12 percent growth directly from the website as well as the partner channels.
Pritesh Talwar, CEO, Livpure said, "The cost of production and inflation costs directly lead to an increase in the value of the product. However, we have always ensured that we provide the best quality products to the consumers at a reasonable price and we will continue to do so."
"The bottom line growth may lag slightly at 20 percent due to disproportionately high inflationary pressures from principal raw materials," Malani of Centuary Mattress added.
Role of Investors
Like any segment that is rapidly growing, the role of investments lies at the center. With the D2C business having taken a major presence in the Indian market, the mattress brands that are taking the route will likely attract more investments in the times ahead.
Sleep solutions brand Duroflex and its online sales arm SleepyHead have recently raised about Rs 450 crore. The Sleep Company has recently raised Rs 13.4 crore in pre-series A funding and also onboarded Anil Kapoor as its official brand ambassador.
These brands are not just allocating these funds on increasing their capacity but also bringing newer technologies to widen their product portfolio to bring new-age offerings to the customers.
"It is our aim to be the world's best comfort tech company, revolutionizing the way people sleep and sit with our patented SmartGRID Technology. In line with that vision, we’ll be entering the new year with bigger plans, more innovation, and deeper inroads in the country." Salot further said.
Similarly, "Livpure is making big investments in technology and fulfillment capacity which will enable us to meet the exacting expectations that our customers have from our brand each and every time. We aim to bring smart and innovative sleeping solutions to our consumers, which will make them go from the requirement to need with smart solutions where people will least expect it to be," Talwar added.