The dominance of the unorganized sector has always been a serious concern for the Indian mattress industry. In our previous editions, we have discussed this issue and the advantages unorganized market players have over established brands. Over the years, mattress makers have made deliberate efforts to stand strong against the unorganized players. It is now apparent that the efforts invested by mattress brands are now reaping some positive results. The organized sector is slowly increasing its presence in the mattress market pie. The unorganized sector in the Indian mattress market has the upper hand, but the growth rate as compared to the organized sector is very low. In the last five years, the unorganized sector has grown with a CAGR of around 9 percent in terms of value which is way slower than that of the organized sector, if we go by a Research and Markets report.

One thing is clear, while the unorganized players are still dominating the industry, the organized sector is reporting higher growth than before and looks promising to compete with the unorganised players. Needless to say, in recent years, mattress brands in India have adopted various strategies to lure more customers, who earlier resorted to local dealers for a ‘cheap and best’ deal on mattresses or any other sleep products. Before we discuss the strategies adopted by organized mattress brands in stealing their share from the unorganised players, it is important to analyse what made the local brands preferable for most customers and how the local mattress players address customer requirements.

The primary reason for the dominance of unorganized players in the mattress market is due to the large presence of small-scale and family-owned businesses in the mattress segment.

The unorganized sector typically consists of small mattress manufacturers and retailers who operate on a small scale, often locally or regionally and they lack proper branding, marketing strategies, or standardized production processes compared to their counterparts in the organized segment. These businesses often have lower operational costs and can provide mattresses at lower prices compared to organized sector players making themselves attractive for the price-sensitive Indian consumers. Meanwhile, their quick adaptability and flexibility to changing consumer demands allow them to cater to specific consumer needs. They can easily roll out new products as per local preferences as they are not bound by any preset processes. Besides that, the unorganized sector owns a widespread network of retailers and distributors, especially in semi-urban and rural areas, making it easier for them to sell the products directly to their target audience.

However, in recent years, the key players and new brands in the organized sector have been taking cognizance of the wider reach and popularity of the unorganised segment. The organized sector has been making deliberate efforts to match up with the consumers’ needs, thereby, grabbing a bigger share in the Indian mattress market.

Over the years, mattress makers have made deliberate efforts to stand strong against the unorganized players. It is now apparent that the efforts invested by mattress brands is now reaping some positive results

Shaking dominance of unorganized sector

The key players and startups in the organized sectors should be credited for their efforts towards giving tough competition to the unorganized segment. In recent years, players in the organized segment have increased their business focus and investment towards creating better value for their mattress products through effective marketing campaigns, innovation, quality control measures, better innovation through research and development (R&D) and strengthening their distribution channels. The organized sector is also providing employment opportunities to graduate youths of the country. Various market forces, changing consumer preferences and increased disposable income of Indian households are some of the reasons that steered growth for the organized sector. Let’s analyze some of the reasons that have contributed towards the shaking dominance of the unorganized sector.

  • Pandemic as a catalyst: The pandemic did affect many businesses but, in many ways, it did change the course of business in every sector. The mattress industry witnessed a change in consumers’ perception post-pandemic. The price-sensitive customers became more health conscious and they understood the importance of sleep for better health. Consumers have now started investing in good mattresses. Besides that, they are educating themselves about the materials that go into making different mattresses.
  • Increased focus on Branding and Marketing: Organized sector companies are investing in creating strong brands and effective marketing campaigns to build consumer trust and awareness. This includes advertising through various channels such as TV, print media, digital platforms, and social media to reach more audiences. By promoting their brand reputation, reliability, and quality, they aim to differentiate themselves from the unorganized sector players.
  • Product Differentiation and Innovation: Companies are focusing on developing mattresses with unique features, technological advancements, and improved materials to set their products apart from the unorganized sector’s offerings. This includes innovations aimed at addressing specific consumer needs such as orthopaedic support, temperature regulation, and anti-microbial properties.  “The organised mattress sector is witnessing rapid growth, driven by increasing awareness of sleep health and the availability of high-quality mattresses at affordable prices. We recognise the importance of understanding and adapting to changing consumer behaviour. By staying updated with market trends and consumer preferences, we aim to better serve our customers through product research and cutting-edge innovation,” says Ankit Garg, CEO and Co-founder, Wakefit.co.
  • Standardization and Quality Control: Organized sector companies prioritize quality control measures and adhere to standardised manufacturing processes to ensure consistent product quality. By offering mattresses that meet industry standards and certifications, they aim to build trust among consumers who may have concerns about the quality of unorganized sector products. “Our motto has always been to help a consumer understand the importance of sleep. If you don’t sleep, you feel tired, irritated, demotivated, and less productive. Not sleeping hampers your entire day and your health and life in the long term. Coirfit’s future plans revolve around addressing these sleep requirements comprehensively. We aim to continue innovating and introducing sleep products that cater to a wide range of needs, preferences, and budgets. Our focus will be on incorporating advanced technologies, sustainable materials, and ergonomic designs into our products. Additionally, we plan to enhance our customer support and after-sales services to ensure a holistic sleep solution for our customers. We spend 25 years of our life sleeping, so why not do it the right way with Coirfit,” says Nirbhay Gupta, CEO of Coirfit Mattress.

The unorganized sector in the Indian mattress market has the upper hand, but the growth rate as compared to the organized sector is very less.

  • Emphasis on Omni-channel presence: To compete with the extensive local distribution networks of unorganized sector players, mattress companies are focussing on having an omni-channel presence for their business across the country. Established brands are working on their online presence to reach untapped markets. Meanwhile, D2C brands are investing in the offline route. “Organised players should follow an omni-channel policy as an important marketing strategy to outgrow less organised or unorganised competitors in this market,” says Archit Gupta, Managing Director of King Koil India.
  • Competitiveness: Organized sector players are also focusing on offering competitive pricing to challenge the unorganized sector’s advantage in terms of affordability. By leveraging economies of scale, efficient production processes, and supply chain management, they aim to offer mattresses of comparable quality at competitive prices
  • Consumer Education: Many organized sector companies are investing in educating consumers about the importance of quality mattresses and the potential health benefits of sound sleep. This includes initiatives such as workshops, public awareness campaigns, and collaborating with healthcare professionals to highlight the advantages of investing in premium, well-constructed mattresses. Earlier mattress brands tried to market their product features but now their marketing campaigns are focussed on promoting the idea of ‘Sleep’. Brands have been effectively communicating the idea and importance of good sleep through their marketing campaigns planned for various communication channels like print, broadcast and social media. The idea of sleep strikes a chord with the millennials who are largely sleep deprived. The road ahead for the organized sector.

Various research reports and industry leaders are quite optimistic about the growth of the organized sector. There is an immense scope for the organized sector to grab a bigger share of the mattress market. Consumers are demanding quality sleep products more than before and this demand will make way for better quality mattresses and sleep products in the Indian market.  

Unexplored markets in tier 2 and tier 3 cities will allow mattress companies to expand their consumer base. Meanwhile, the growing adoption of the D2C model by mattress companies will allow mattress brands to offer sleep products at prices suitable to a larger number of consumers. Ideas like a 100-day trial period will encourage people to try out new mattresses with better technologies and fabrics.

“In a few decades, as India poised to become the 3rd largest economy of the world and as the purchasing power of people will keep improving, it is imperative to state that branded & organised players will take a majority share in the mattress market compared to unorganised players,” explains Archit Gupta from King Koil.

According to a report by Makreo, “The India mattresses market is expected to register a CAGR of 11.43 percent during 2021- 2026.” The report also states that the organized mattress brands will outperform unorganized players in the coming years due to lower prices, increased health consciousness, a diverse portfolio of branded mattresses, and the entry of new players into the organized segment. 

In a nutshell, the organized segment in the Indian mattress sector is on track to grab a bigger share of the market. With the change in consumer mindset and a better standard of living, the organised segment is only going to get bigger in the coming years.

Numerous strategies adopted by mattress brands will enable organized sector companies to establish a stronger market presence, build their brand awareness and provide consumers with a wider range of choices, competitive prices and quality assurance.