And a similar phenomenon is already taking shape in India… look up for wakefit mattresses, comfymat on Google and many others who are viewing the margins on mattresses and capitalizing on the opportunity by going direct to consumer on a platform which the new customer is comfortable with.
P.s. not invested just studying
I read a very interesting article on Casper and how they are leveraging the mattress business with Airlines in the US to provide them for the Biz and First Class customers. Depending upon the market addressable market - wonder why Sheela and other mattress cos are not able to sell this to Indian Railways for their “bedding” requirement. Innovation and Disruption appear to be two sides of the same coin - wonder if this can be done. A thought!!
Disc: Not seen much “out of box” thinking for the co to Beat the Market (competition) although I quite like the space.
Yes, Kurlon asked for deposit.
Also agree with point that more popular the brand, more people use it and thus causes margin trouble.
What Sleepwell is doing is they have set limits on the amount of discount that can be given on particular products.
If you found to violate these norms will result in penalties upto Rs 20000 and for multiple repeat, they are going to terminate dealership.
Agreed. This online mattresses eCommerce space will probably expand just like every other category did.
But even in US, it is just 10% of overall sale. In India, transportation is a hurdle.
Many eCommerce companies are not ready to deliver white goods to small towns. How they will be able to ship Mattresses will be interesting to see.
But I still think, it doesn’t affect Sleepwell or any other maker (Kurlon or Century) for couple of years more.
SHEELA foam up 15% today at 1780 vs ipo of 730 & listing price of 800 odd. GST reduced to 18% from 28 % ,GST benefit from unorganized to organized & DOW new TDI plant commissioned may leading to lower TDI prices.
Sheela Foams ltd closed today at 1750 after 1 year of listing at 860 Rs giving nearly 100% tax free returns to those who followed this thread & were gutsy enough to buy this quality FMCG stock in worst of DM times.
Incidentally IPO was at 730 rs & gave firm allotment to all retail applicants uptil 2 lacs rs.
Discl- Invested in IPO in all family members accounts & still holding on to same.
Hi @nikhildoshi. Have a few questions for you since you have experience in this industry. Hope you won’t mind.
Do any of the established offline mattress brands like Sleepwell, Kurl-on and Centuary offer 100 nights trial period with full refund guarantee like online only mattress startups do? Ex. Wakefit, Wink&Nod, Sleepy Head, Sleep Cat etc.
I have been researching online only mattress brands for the past few days and have found that most of them provide free delivery to the remotest locations of India such as Leh, Andaman & Nicobar etc. For the foam mattresses specifically they have developed delivery solutions such as mattress in a box delivery. Any thoughts on this? Do folded foam mattress get damaged? As per the reviews I have read, online customers are happy with their purchase.
I haven’t made a spreadsheet to compare prices of online vs offline offerings but initial small sample suggests vast difference in pricing. In fact if you would read the interviews of founders of WakeFit, one of the startups in this space, he mentions that the offline distribution and retail adds alot of artificial inflation into the mattress price and going direct to consumer reduces costs by as much as 50%. WakeFit is the largest amongst new startups with 20% of online mattress share. Online mattress market share of the total mattress market is very low.
Reference Prices for (72x72xX) King Size Memory Foam Mattress:
A few notes about these startups, they have good reviews about their brand, product, delivery, after sales service in various SM platforms. Websites of all the startups explain what memory foam is and its advantages.
A few even try to bust the old elderly wisdom that a hard bed is good for the spine. No comments on this, but international studies are available, if anyone is further interested, to compare the benefits of soft memory foam over hard surfaces.
I had a look at the websites of Sleepwell, Kurlon and Centuary as well, Sleepwell’s and Centuary product range I found to be a little time-intensive to understand, as they have their own sub-brand names for different products. Kurlon website was still easy to navigate as they group their mattresses by Coir, Spring and Foam type.
The startup’s product range is easy to understand as they mostly offer memory foam based mattresses, probably because of ease of delivery. What I liked was that in the product range they explain the layering of the inside of the mattress, the need for cool gel top layer to counter the heating of memory foam and other quality parameters.
A few of these startups offer really good stuff like imported Belgian Latex mattress which adhere to European standards. Coming to standards, a few even offer CertiPur US certified foam mattresses. Due to the extended product range of established offline players I was unable to ascertain whether they also offer similar certified products. Perhaps, @nikhildoshi can shed more information on this and accompanying price tiers to make a full comparison.
Beside these parameters, if one looks at the mattress providers in the developed markets, one understands the huge lack of product information in the Indian market. While mattresses here are being sold as orthopedic or therapeutic, granular detailed information about the comfort levels provided by the mattress is missing.
In the American market, a lot of importance is given to the provability of such claims. Therefore, the mattress manufacturers use terms like foam thickness, foam density and ILD (Indentation Load Deflection) parameters to gauge its softness and comfort.
Reference:
https://www.amerisleep.com/memory-foam-buying-guide
I have seen some of the Indian startups disclose the foam density, thickness and international certification. Most of these startups are selling medium firm foam mattress as their foam density is around 55Kg/m3. Softer ones are more expensive, and maybe offline players offer that. @nikhildoshi any comments on this?
So overall, while online startups do have a price advantage due to lower distribution costs, low mainstream advertising spend, as they are highly dependent on online, SM reviews and referrals, it seems their product category may be limited to foam mattresses.
One of the startups was offering 10% discount on price for posting their product video and tagging 5 friends on FB.
These are just a few of the top online mattress sellers in India. I am sure there are many more. Given, the competitive landscape between Unorganized Domestic, Organized Domestic, Online Branded, & Chinese Imports, it is difficult to decide in whose favour the market is moving. So while the TAM is big, the competitors fighting for their fair share are no less.
It is great to own a business that converts commodities to branded products, but the pricing power of the brands also seems limited as the margins follow the opposite trajectory of crude prices and the competitive intensity of the industry is heightened in the past few years.
PS: Last statement is only based on the margin profile of Sheela Foam, yet to see overall industry margin movement over a business cycle.
Disclosure - Not Invested.
This is pretty big post and you have raised a lot questions,
Let me share what I know…
I have read all the article regarding how mattress industry in USA is being disrupted by new startup.
But if I remember, Casper is still not profitable and neither it was on verge of being profitable (similar to flipkart / Amazon, chasing sales over profit).
Now online product available in India.
I bought two products just to see how good they are -
Price listed on Wakefit website was Rs 999 but on Amazon it was showing Rs 1299 (mrp) and then after offering 25% discount, final price will be same as the original price Rs 999
I ordered one in Dec 2017.
Pillow came in very small package. It was basically folded in half. I opened package couple of days later to find that pillow now has permanent partition where it was folded.
I complained to Amazon which said it was Wakefit responsibility. I called Wakefit, they said since it was purchased from Amazon, they can’t do anything. I called Amazon again but now they said return window has been closed because it was more than 7 days since pillows was delivered.
Thus after spending about 1000 bucks and couple of hours on customer support, I was not able to use pillow at all. It is still lying, unused.
It is also now lying in my cupboard, unused ever since.
I complained to Sunday mattress customer support, they said they understood my problem and it might be that mattress topper might not be comfortable with me.
But,
Still they won’t take it back or exchange it because their policy clearly indicates that being an an accessory product, it cannot be returned.
Thus another 7000 get wasted.
Now, about retail overhead contributing to 50 % additional cost…
Well this is been true for most the product that get sold offline.
In face, I would say barring transport, Indian retail distribution network is pretty solid and one can get almost everything essential in every corner of India.
We indian (most Indian) still consider mattress purchases as luxury.
I have dealt with many client who spend 30 - 40 lakh on interior but they won’t spend more 15 k on mattress.
Awareness is low and that’s where retailer come in.
In 80% cases, we are able to sell higher range mattresses than the customer originally wanted. Thus salesmanship plays important role here.
Sometime we sold twice or maybe thrice customer budget.
That’s why everyone mattresses manufacturers is trying for retail presence.
Selling mattress online is not big deal. On Amazon, many Sleepwell mattresses are available for good discounts.
What’s important is to choose which one is good for you.
For that, specifications alone are not sufficient.
As you said, Indian manufacturers doesn’t provide all the information. This is true.
I asked my Sleepwell Area manager, same question. He said, after doing lots of research, they have decided to focus more on other aspects of product rather than simply providing specifications and let customers compare.
I initially disagree with him but now after selling more than 2000 mattress, I do agree.
Thank you for your insights Nikhil. Your last point makes sense, when the customer is not interested in comparing the data, why give it to them. Though, over the long term this will change, but status quo for now.
Nice to see Sheela foam standing strong in the big bearish mkt. Axis n Edelweiss have recently started coverage on it
Can someone help with valuations on this company. TDI prices are expected to stay around 220/kg ( drop from 350 levels not to long ago ) and company is talking about price increase. They have approx 150 cr in cash on books and generating around 35 cr of free cash flow each year. Current Mcap is around 6000 cr and on face it looks very very expensive but with TDI prices down ( 60% of the raw material) and company talking about price increase, interesting days are ahead for the co. Extremely low float stock with 85% with management.
Disc - invested from IPO.
Can anybody put somelight into an an ultramicrocap company MM Rubbers which is into foam matresses. its promotor is same family of MRF tyres. Could they make MMRubbers as big like MRF. Huge price action happened in 2018 during the mid and smallcap carnage period
Online penetration seems low-At ASP of 5k and market size of 9000 Cr , we are currently seeing about 18 million mattresses sold in a year. Google search volume for mattresses is only about 100k a month, which will translate to a maximum of 1 lac in sales (at a generous 10% conversion) through Google SEO and SEM. Total online sales could be 4-5 lacs (assuming a conservative contribution from Google)
IMO, we are still sometime away from the startups becoming a force to reckon with. And when they do, we may mimic the US market. One of the incumbents (Serta Simmons) joined forces with the disruptor (tuft and needle); the other (MattressFirm) filed for bankruptcy 
What do you guys think about Kurl-on. It is available for a better valuation (PE 15) than Sheela Foams through various brokers
Industry is certainly is being disrupted. Traditional players don’t have any moat or differentiation compared to these new age startups. Earlier the moat was staying close to the consumer ( since logistics was a huge cost for transporting the mattres ) and they were giving user experience in the store along with a salesperson to allow an consumer to make informed decision.
With new age packaging ( compressed mattress ) and readily available distribution reach from like of amazon, that is no more an advantage. Besides brands itself is loosing its relevance as consumer are ready to experiment new products purely based on user reviews and feedback.
I personally bought Tuft & Needle mattress without ever seeing any advertisement purely based on customer reviews on amazon and I am happy with the purchase.
Recent analyst concall suggest company is aggressively getting in to exclusive stores to give that experience of look and feel to consumers. Wonder how long before Amazon come with their Amazon basics mattress or any startups to enter this space.
I just bought wakefit mattress. initially got a back pain for 30 days. thought to return as purchased from Amazon. but seeing review thought to try for 100 days. now it’s comfortable. no back pain.
can anyone help about mattress.
till now I was using the traditional mattress of cotton and coir.
which is the best mattress for use.
while staying at good 5* hotel, i liked the mattress they use. one of the shopkeeper told me that these hotel mattress is 10 to 12 inch spring mattress and not good for spine. so don’t buy for daily use. don’t know why he staying so. it’s truth or just wanted to push for local brand .
so many online product and offline brands. really confused which is best. online have also good review.
any person who have used all these and give feedback or dealing in mattress product. which is best with regard to comfort and back pain. also wanted to know about pillow. never find the same quality pillow which I used in hotel in market.
disclosure: I am not invested in sheela foam but planning to add
please help as one fourth of life we spent on these mattress
I would not agree with the shopkeeper’s comment on using spring Mattress at home. Both me and my spouse are in services sector so had lot of back pain issues earlier. Our close relative who is a doc suggested spring mattress. I have heard it doesn’t suit everyone though. We got custom built Sleepwell 8 inch spring mattress to fit the bed and using it for the last 8 yrs+ and thankfully not a single complaint of back pain so far. The mattress has not lost its shape and looks as good as we bought it. No investment here but I hardly consider any other brand except Sleepwell. Most of the products look good, generates good return ratios but not sure it trades at justified multiples.
No investment
thanks dear. any other opinion
