Based on our interaction with some industry experts, it could be deciphered that 2023 would be relatively a better year for the Indian mattress industry that has stood against all odds in the post-COVID era. While the industry is still under the threat of the dominating unorganized sector, brands are increasingly leveraging new strategies and innovating new products to attract consumers.
The year 2022 would be remembered primarily because of the Russian invasion of Ukraine. The war and the sanctions imposed changed the business dynamics across global markets, as it not only disturbed the direct supply chains with Russia and Ukraine but also the supply chain via Russia and Asia. This resulted in a price hike for raw materials and transportation services. The ripple effect of the war was evident across all markets and every business did face its own set of challenges.
The Indian mattress market was no exception. The industry which is yet to witness its good days was already battling challenges posed due to the covid induced global lockdown. Soon after that, it also had to deal with the changed market dynamics. Despite, all the challenges the Indian mattress industry did fairly well. At the risk of sounding cliché, it could be reiterated that the Indian mattresses Market is still dominated by the unorganized sector, which pesters the organized players in the market to come up with new and innovative products and align their marketing strategies that would subtly contribute towards shifting the consumer mindset.
A vague analysis of the recent trends in the domestic mattress market gives us the impression that the consumer mindset towards mattresses as a product is gradually changing. People are now looking forward to investing in a good mattress and their main focus is on the comfort and functionality of the product that would, in turn, help them ensure their overall well-being. Based on the conversation, we had with some of the industry experts, one thing is clear the rise in income levels and growing health consciousness among people has contributed tremendously towards the growth of the Indian mattress market in recent years.
Mattress makers have been adopting innovative strategies both in the offline and online mediums to deliver unique experiences to customers, who are now willing to experience new sleep products. Companies are leveraging new techniques to utilize their resources and technology. Increased infrastructural developments and a growing number of residential facilities and hotels across the country are hiking the demand for luxury mattress brands in India.
However, the domestic mattress industry is still reeling under the pressure of the dominating unorganized mattress market that still commands a large part of the market pie. Taking cognizance of this threat, the organized players have been consistently floating new strategies to retain their existing consumers and create new ones. Industry experts are quite positive about the new financial year, and they do have some expectations from the government to give their strategies an aggressive push.
2023: A Sunrise year for the industry
Having gone through turbulent times in the last two financial years, industry experts are quite positive about the industry’s performance this financial year. The market is believed to get back on track and the growing awareness about the importance of sleep among consumers is expected to give the industry an upward push.
“Despite, all the challenges the Indian mattress industry did fairly well. the Indian mattress industry is still dominated by the unorganized sector, which pesters the organized players in the market to come up with new and innovative products aligning their marketing strategies that would subtly contribute towards shifting the consumer mindset.”
“Post covid, the industry slowly came up in 2022 with the growth rate likely to be between 7 to 8 percent. In 2023, the scope is quite huge as numerous initiatives have been taken by the industry for the sake of consumers,” says S Sundaresan, Secretary of, the Indian Sleep Products Federation (ISPF). The organised sector is taking several initiatives to battle against the dominant unorganized sector. As consumers are increasingly becoming aware of the variety of mattresses available in the market, mattress manufacturers and retailers are arming themselves with the right set of knowledge to serve their customers better. Intensive training is being given to dealers who in turn will educate the consumers and help them find the right product, explains Sundaresan.
Though the market seems to be upbeat, mattress manufacturers still have to work hard towards tackling the unorganized market that again got active last year and brands need to rethink their innovation strategies. “It’s going to be a relatively tough year again and brands will have to do a lot of product innovation to make sure that they are able to maintain their growth momentum,” says Uttam Malani, Executive Director of Centuary Mattress. “In 2023, brands will not only have to do product innovation but also innovative marketing campaigns to be on top of mind of consumers and also defy conventional selling seasons and seasonality as it has been in the past,” explains Malani.
Meanwhile, Vipul Kumar, Vice President and Head – Product Engineering and Sustainability at Duroflex explained, “The mattress industry did very well in 2022 till Diwali. The lower end of the bedding was doing well; however, the premium mattresses did not sell in the numbers that we had expected. In 2023, we expect things to improve but it all depends on the macroeconomic situation.
Harshil Salot, Co-founder of the Sleep Company, also seems to be hopeful about the new year for the Indian mattress industry. According to Salot, “2022 started out on a very positive note and the industry did well but from August or September, it had slowed down, in fact, it is in negative territory for both offline and online channels. This year, we are expecting growth to bounce back and we will see healthy growth across channels.”
Growth Drivers
Growth Drivers Rise in income levels and growing awareness about health and well-being are the two primary growth drivers for the Indian mattress market. “Consumers are now more aware of the products and they understand different forms of mattresses. After covid, people have become health conscious and now they are willing to spend money on health and wellbeing. With the government providing loan facilities, people have more buying power. So, there will be more sales this year,” says Mohamed Kunhi, Managing Director at Sulfex Mattress.
The industry is also witnessing a change in the way consumers now view sleep products. Earlier, the consumers would be price sensitive, now they are more focused on the comfort and functionality of the product. Sundaresan outlines various reasons that could drive growth in the mattress market this year. The industry is likely to do well this financial year as a lot of initiatives are being taken to impart training to the sleep retailers, who are now being called the ’doctors of sleep’. The retailers are now trained adequately to make customers feel comfortable and discuss their requirements. Based on the customer’s requirement, sleep retailers help their customers spot the right product. Secondly, there is a lot of emphasis on creating sustainability this year. The whole idea of recycling mattresses is being promoted
under the slogan ‘#phekonahirecyclekaro’ (meaning don’t throw but recycle). All these premium mattresses will now be sold by green stores by green dealers. Thirdly, the growing inclination among millennials to invest in the right product. They do their research before buying a product and with further discussion from retailers they ensure, they pick the right sleep product for themselves.
Meanwhile, Uttam Malani points out that the growth of the industry will largely depend on how the budget plays out. “Given that there are multiple state elections happening this year and the general election is lined up for next year. There is an anticipation that the budget is going to be a populist budget which might leave consumers or masses with more disposable income and more money to spare in their hands. In India, the budget plays a crucial role in determining consumer sentiment. The other thing is product innovation. This category has not been very exciting in the last few years and there has to be something to excite the consumers and that’s why product innovation should help.”
“The retailers are now trained adequately to make customers feel comfortable and discuss their requirements. Based on the customers’ requirements, sleep retailers help their customers spot the right product. “
It would be safe to say that in 2023, the major growth drivers in the mattress industry would increase in disposable income of consumers, innovative products and effective sales and marketing strategies.
If we have to consider the categories of sales, the offline category commanded a larger share of the market last year. Going to a report, the offline category held the larger share of the market in 2022 because customers prefer getting suggestions from sales personnel and choose from a wide range of mattresses after getting to check the product from the stores. Besides that, consumers prefer the offline medium of purchase owing to a preference for trusted aftersales and faster delivery services than online platforms.
The industry also looks hopeful about the online category registering the highest growth in the forthcoming years. New entrants in the mattress industry use roll-pack technology, which allows the mattress to fit into a compact form, which enables easy and safe shipping of the products.
Due to the death of time, consumers are slowly shifting to the online medium of purchasing mattresses. This leaves immense scope for mattress makers to make the buying process more seamless and deliver a unique experience to buyers.
Threat from the unorganized sector
The unorganized sector dominates the mattress market. Going to a report from Research and Markets, the mattress category in India is worth Rs. 12,000 to Rs. 13,000 crores; out of which the organised segment commands only a 60 per cent share. The outbreak of Covid contributed towards deactivating the unorganized players that maintained a low key during the Covid phase.
“In the second half of 2022, we witnessed an increased involvement from the unorganized sector that was quieter in 2020 and 2021 because of the effect of covid and also due to the effect of higher input prices of foam and coir and everything. In the second half of 2022, the unorganized sector became very active because of lower foam prices and lower ticking prices and also capitalized on the greater sensitivity of consumers towards price points,” explains Uttam Malani.
“The threat will be from the unorganized sector. The unorganized sector does not pay any tax or GST. The price difference between organized and unorganized sector mattresses will be almost 35 per cent. Competing with the unorganized sector will be difficult. The organized players are going to face the biggest threat from the unorganized players. In every region, there are unorganized players who do not pay taxes or comply with other rules. So, the government should be a little strict in imposing taxes on every player in the mattress market. Only then this industry will flourish. Otherwise, we will not be able to compete against these unorganized players,” explains Mohamed Kunhi of Sulfex Mattress.
Changing consumer mindset
A lot of research reports indicate that changing consumer mindset is one of the biggest reasons to drive growth in this Indian mattress market. As per experts, consumers are no more price sensitive and prefer quality over cost-effectiveness. “Now consumers want customization and personalization,” says Sundaresan. “Earlier, people were price sensitive, now they are looking for value in products, in terms of, comfort and support,” explains Sundaresan who also feels that sustainability will be an important aspect in 2023. People are now looking for recyclable materials and hence, the effect of eco-friendly products is growing every day.
Meanwhile, Uttam Malani feels “it’s hard to forecast for full-year but at least in the starting of the year, we seemed to think that was going to be the case and only in the second half of the year, we may see a revival in the consumer spending and mindset. There is also a lot of dependence on the rural areas particularly in tier 2 tier 3 tier 4 markets. There is a lot of dependence on how the monsoon is and how the crop is because these are primarily agriculturally run economies and in 2022 the crop output was low which caused a drastic drop in spending in rural areas. So, I think that will continue in the first half of 2023. We should see a rebound by the second half provided there is better monsoon and crop.”
The consumer mindset is slowly changing with most buyers preferring good quality sleep products. Consumers who would earlier just pick up a cost-effective sleep product are now researching well about a mattress or other sleep products and then finalizing on a product. They now know the difference between different types of mattresses and enquire about the material that has gone into manufacturing a mattress
The road ahead for the Indian mattress market
Product innovation, appropriate marketing strategies to promote the idea of good sleep and intensive training and development of the stakeholders in the domestic mattress segment is already contributing a lot towards shaping up the mattress industry in India.
According to India Mattress Market Outlook, 2022, the market share of unorganized players is expected to drop drastically in the coming years. The Indian mattress market, Factors that will guide Indian Mattress Industry in 2023.
- Based on the conversation, we had with some of the industry experts, one thing is clear the rise in income levels and growing health consciousness among people has contributed tremendously towards the growth of the Indian mattress market in recent years.
- Mattress makers have been adopting innovative strategies both in the offline and online mediums to deliver unique experiences to customers, who are now willing to experience new sleep products
- Increased infrastructural developments and the growing number of residential facilities and hotels across the country are hiking the demand for luxury mattress brands in India.
- The market is believed to get back on track and the growing awareness about the importance of sleep among consumers is expected to give the industry an upward push.
- In 2023, the scope is quite huge as numerous initiatives have been taken by the industry for the sake of consumers. The organised sector is taking several initiatives to battle against the unorganized sector
- The industry is also witnessing a change in the way consumers now view sleep products. Earlier, the consumers would be price sensitive, now they are more focused on the comfort and functionality of the product.
- The whole idea of recycling mattresses is being promoted under the slogan ‘#phekonahirecyclekaro’ (meaning don’t throw but recycle). All these premium mattresses will now be sold by green stores by green dealers.
- A lot of research reports indicate that changing consumer mindset is one of the biggest reasons to drive growth in this Indian mattress market. As per experts, consumers are no more price sensitive and prefer quality over cost-effectiveness.
- Consumers who would earlier just pick up a cost-effective sleep product are now researching well about a mattress or other sleep products and then finalizing on a product. They now know the difference between different types of mattresses and enquire about the material that has gone into manufacturing a mattress
- Consumers have even started buying from international brands because of their high-quality and contemporary products. While the key players in the mattress space are constantly innovating new sleep products and devising marketing strategies to influence consumers’ mindsets.
- Another reason that is helping the organized segment grow is the growing number of residential units across the country. With the increasing number of hotels and real estate businesses, the demand for good quality sleep products will only grow with time.
- The entire ecosystem that has been built steadily over the years to pull more consumers towards the organized market is slowly reaping results.
- If the unorganized sector poses a challenge, then it also gives tremendous opportunity for the Indian mattress space to turn this problem to its advantage.
Product innovation, appropriate marketing strategies to promote the idea of good sleep and intensive training and development of the stakeholders in the domestic mattress segment is already contributing a lot towards shaping up the mattress market in India. The consumer mindset is slowly changing with most of the buyers preferring good quality sleep products.
which is largely dominated by the unorganized sector led by the street-side shops and local players, is fast shifting towards branded mattresses. The organized sector is growing with rising demand for good quality mattresses among Indian consumers. Consumers have even started buying from international brands because of their high-quality and contemporary products.
While the key players in the mattress space are constantly innovating new sleep products, and devising marketing strategies to influence consumers’ mindsets, they still feel threatened by the unorganized players. This problem can be tackled with the government’s interference.
Another reason that could contribute towards the growth of the mattress market is the increased presence of brands in the online medium. We have witnessed established brands taking the online route and new players in the mattress segment building their customer base online. Gradually, these brands are also taking the offline route and they are trying their best to offer unique in-store experiences to their customers. Besides that, convenient return policies, packaging and competitive pricing are some of the key reasons making the mattress market more vibrant. Another reason that is helping the organized segment grow is the growing number of residential units across the country. With the growing number of hotels and real estate businesses, the demand for good quality sleep products will only grow with time.
If we consider the global scenario, a recent report from psmarketresearch.com has also indicated that the Asia Pacific region is leading the global mattress industry with a revenue share of approximately 40 percent in 2022. The reason behind such good numbers is attributed to the huge population of India, Indonesia, and China. As the purchasing power of the middle-class population from this region is increasing, their urge to spend more for improved standards of living is also surging.
Going by all the numbers and the ground-level scenario in the Indian mattress segment, one thing is clear the Indian mattress segment is all set to grow in the coming years. The entire ecosystem that has been built steadily over the years to pull more consumers towards the organized market is slowly reaping results. If the unorganized sector poses a challenge, then it also gives tremendous opportunity for the Indian mattress space to turn this problem to its advantage. What is already being done is working well towards benefitting the industry but the effort to make this segment still goes on. It would be interesting to watch out for the Indian mattress market this year and we hope new products with new technology, effective sales strategies and seamless after-sales services make way to this segment.