Moulding well for growth

We are in no hurry – says Mr. Manish Parekh, Executive Director and President (Furniture), NILKAMAL LTD when he narrates how this relativelyfresh arrival in the mattress industry is approaching the opportunities and challenges that it embraces in new woods. It seems that this player is surely applying all its strengths and lessons of being a formidable player in the furniture industry. Its ability to amplify distribution nerves and its knack of swift stock-replenishments are major advantages in its pocket that are being augmented with a new focus on lifting awareness through sharp advertising efforts. Let’s see how this strategy of ‘sharpening your axe’ first is working out for this well-entrenched furniture player.

Nilkamal is an illustrious name in the furniture business, what made you think of entering the mattress industry?

We have a well distributed network including the small mom-n-pop stores that deal in plastic furniture. These dealers were also dealing in Mattress and hence it became a synergistic process for us to take forth. The plastic business has its limitation of growth. We wanted to leverage our distribution network and the visible shift in the mattress industry from unorganized to organized segment. Branded mattress presented itself as a promising opportunity and thus encouraging us to enter the mattress industry.

You started the mattress business in the year 2011. Still, it is hard to be seen as a serious player in this space. How are you planning to address this gap?

We started off slow, however in the last 3 years we have been growing steadily with a CAGR of 30+ percent and also expanded our channel network. Going forward we intend to further intensify the growth as we have a complete product range now. Our focus is on further strengthening the distribution network and establishing Nilkamal as a formidable player in the mattress category through sharp positioning and consumer-centric marketing initiatives.

Do all your retailers sell mattresses?

40-50 percent of our retailers are selling our mattress. Our focus is to continuously add new distribution and retail partners. When I go in the market, I see our retailers are happy with the supply chain plus the level of quality that we deliver. This is marked shift since the early years on quality. We have bolstered our quality norms.

What is the current capacity of Nilkamal Hosur factory?

The overall capacity is 30,000 mattresses per month.

So you have one factory for mattresses?

We have facilities in all four regions across North, East, West and South of India. We still do not have facilities for foam. But we have a pan-India presence. Even for our plastic business, we have multi-location plants.
What percentage of your revenue is contributed by the mattress business? It is not significant as it is in still in single digits.

Nilkamal has built a strong name in the furniture space. How did you achieve it?

Rephrase it as – We are an innovative company. We have come up with many firsts in terms of design, colours and patterns in our furniture offerings. We have invested heavily in building our furniture brand. We have adopted best practices in manufacturing and have been awarded multiple recognitions and Our supply chain management system ensures timely availability of our products in the market. All these have helped us in establishing a strong name in the furniture category.

How are you planning to adopt some of the lessons learnt in your mattress business?

At the factory level, we ensure all quality process, rigorous checks and balances happen. Plus, at sales and distribution level our supply chains are very strong with a good network and strong buffer norms. The stocks never get depleted. We have achieved high quality in our product and service levels..

What is your USP for the mattress business?

We have a complete range of product addressing every sleep type to ensure an undisturbed sleep. We have the advantage of leveraging our strong distribution network. We have created an effective supply chain management system to ensure quicker lead time to service the market.

How are you planning to take on International and Domestic players?

Also, the organised sector in bedding industry is a major challenge for branded products like you. How are you addressing this challenge? Hopefully after GST, the unorganised sector will get depleted slowly. Because you cannot function without proper tax systems. Of course, this will not happen over-night. As to the international brands, yes they can come here with licensing and tie-ups with local players. But India is such a price-conscious market, and it would be difficult for international brands to compete with Indian counterparts. A combination of correct pricing and distribution is more important in this market. Sleepwell and Kurlon have done a good job. India is a wide market. A small segment can incline towards the foreign players but it would be a tiny one. So I feel no threat from foreign players.

Can you share some of the new initiatives that you would be taking in the year 2020?

We are clearly looking at strengthening our brand equity in the mattress business. We have to catch up with others who have done it for over 20 years now. We have recently launched “Doctor Dreams” mattress. Doctor Dreams is a new concept of Mattress in a box. Doctor Dreams intends to support India’s ever-growing, every-busy and ever-aspirational millennial population by ensuring they not only get the rest they need but truly enjoy it, too. This will be a focus area for us in 2020. We are approaching new retail counters and ensuring our products reaches the last mile.

What support do you think the government can give to domestic branded bedding industry to compete with International brands?

Honestly not much but on the GST front, government might announce more steps. The idea of merging 12 percent and 18 percent into one slab would be an additional benefit to organised sector. It will help a lot of industries including the mattress sector.

ISPF is an industry body which promotes importance of sleep and role of mattress for a Indian consumers. ISPF plays very important role in connecting Indian bedding industry ecosystem. ISPF also acts as bridge between India and international players.