COVID-19 Impact and Recovery - A peek into the Bedding Industry - India Mattresstech Expo
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July 2020 ₹200/- Volume 2 | Issue 3
INDIAN SLEEP
PRODUCTS FEDERATION
COVID-19 Impact 35
ISPF Sleep Trends Survey Report
Sleeping well in the
and Recovery – COVID-19 Times!
59
Mattress Industry Research Findings
A peek into the
Indian Retail Market
Performance- Modern
Mattress - Round 3
Bedding Industry 27
New Business Opportunity
Demand for Medical
Mattress zooms in Corona
times
PRIVATE CIRCULATION ONLY
Content 3
Cover Story 11
Editor
S. Sundaresan
Editorial & Advisory board
Indian Sleep Products Federation
A/5, Veerabahu Nagar,
Pettai, Tirunelveli - 627 004
India
Project managed by
eMpulse Research and Data
Analytics (I) Pvt Ltd
What a Bug!
Printed at
Aditya Graphics and Printers
Editorial correspondence
may be addressed to The Impact of COVID-19 on
the Mattress Industry
Editor,
Indian Sleep Products Federation
A/5, Veerabahu Nagar, Pettai
Tirunelveli-627004
India The pandemic has shaken up a lot of
OR
email: ispf.0813@gmail.com businesses all over the world. While many
https://www.ispf.co.in/ industries struggle to find tiny signs of survival
and resilience, how much spring does the
Price 200
Copyright © 2020 Indian Sleep Products
sleep-industry need to bounce back? Or is it
Federation. All rights reserved already up and about?
4 Content
Interview 32 Feature 54
Home is now a priority Mattress: Some outlook,
Kurlon Leaderships speaks to Comfort Times some introspection
Seller and Buyer – both struggle with
the explosion of ‘choice’ 53
Motilal Goel, MD and CEO, Pyare Lal Coir
Products Ltd
Online is a new medium for the next
phase of growth 58 The future of the mattress
industry is as layered as a typical
Pankaj Gupta, MD of RP Foam Home Pvt. bed – there are some short-term
Ltd. changes and some long-term
directions worth making room for
Feature 22
Survey Report 59
Aatma-Nirbhar Mattress: From survival
to success Mattress Industry Research
The Covid19 period has pushed the local Findings: Indian Retail
industry to support the life in this pademic
crisis period and “Atma-Nirbhar” in mattress
Market Performance-
industry is the challenge and the opportunity. Modern Mattress - Round 3
ISPF Sleep Trends Survey Report:
Sleeping well in the COVID-19 Times! 35
ISPF did a survey to understand the scale
and shift in sleep patterns brought on by the
COVID-19 on how Indians are coping up with
the epidemic in terms of sleep-cycle. ISPF organised survey to
Work-from-home: The evolution estimate the quarterly sales and
towards a saner lifestyle 45 growth of mattresses in India
Due to the pademic COVID-19 the new era of
Work-from-home culture has begun. We are
trying to analyse the pros and cons, the impact OTHER STORIES
of this new necessity-built culture.
Editorial 5
New Business Opportunity 27
India News 8
New Business Opportunity: Demand for
Medical Mattress zooms in Corona times
In this Covid crisis as the need of beds for Global News 10
patients is increasing day-by-day, let us take a
look at the industry’s response to the situation Back of Book 62
in providing the Medical Mattress
5
FROM THE
EDITOR
H
ow are you feeling today? It is extra taking centre stage. It is fascinating to see how
special to say ‘Hello’ to you amidst legacy players are embracing technology and
this unique phase of lockdown, online models with strength and creativity.
uncertainty and social distancing that It is impressive to see how some players
we all are going through. God knows, when we have already started working on health as
will shake hands again and share a conversation a key plank for serving customers better. It
face-to-face in some meeting – like old times. is also interesting to unfold the unexpected
But till then, I am glad to see that people from ramifications that mainstream changes have
our industry brethren are marching ahead with injected into our industry. Everything from
unprecedented will-power, patience, hope, Work-from-Home models, remote work,
resilience and agility. Yes, we have suffered home improvement projects, binge watching,
some dents. True, we have gone through some lockdown recipes, real estate shake-up to
really abrupt surprises. For sure, the business heightened health awareness has brought
has been weaving its way through some strong and positive ripples into the industry.
unfamiliar terrains of chaos, confusion and
economic challenges. Also, a bigger surge of positive side-effect
is coming our way as shifts like work-from-
But as you can see in this issue, the home, demand for medical mattresses and
lockdown has brought in some unexpected hygiene products, focus on ergonomics etc.
positive changes for the industry. An gather more traction.
interesting customer survey reveals that
people are finally realising the importance of As we get ready to enter the Six-Feet Office,
sleep-health and value of investing time and we are already experimenting with the Six-
money in a good mattress. The same epiphany Feet Store in our industry. Radical marketing
is being reflected in the kind of demand, needs and servicing approaches have emerged
and trends that industry players have been during the lock-down. Customers should be
witnessing in these last few months. ready for better experiences, stronger service
and innovative offerings as lockdowns ease.
In fact, the industry has learnt some of The path that the industry has picked during
its best lessons through this crisis. We have the pandemic will continue and strengthen as
understood new layers of customer demand. things get better.
We have morphed our way confidently and
creatively from bricks to clicks. Amidst all this I speak on behalf of so many experts,
disorientation, we have managed to survive, to players and customers when I say that the
innovate and to serve our customers. future is full of new and sunny possibilities.
We are going to come out stronger, brighter
In this issue, we bring to you some of these and better from this unusual phase. We are
insights that companies and brave leaders all hoping for that ‘tomorrow’. Let us keep
share with a lot of candour, generosity and learning – from each other, from customers,
positive perspectives. Our cover story, industry from other industries and from the crisis. I am
interviews and ensuing features examine the very sure that the next issue would be about a
impact that COVID-19 has caused – and that fresh injection (pun intended) of positive news
includes the good, the not-so-good and the – in every way, for our industry, and beyond.
new. We also uncover how new shifts are Keep reading!
S. SUNDARESAN
6
INDIAN SLEEP PRODUCTS FEDERATION
MANAGING COMMITTEE MEMBERS
Sheela Foam Limited
Centuary Fibre Plates Pvt. Limited
Kurlon Enterprise Limited
Tirupati Foam Limited
Duroflex Pvt. Limited
Godrej & Boyce Mfg. Co. Ltd.
Sobha Limited
M. M. Rubber Company Limited
Real Innerspring Technologies Pvt. Ltd.
Nilkamal Limited
www.ispf.co.in
7 ISPF VISION To promote the sleep products industry by enhancing consumer awareness on quality sleep, while setting benchmarks for its products and services. To represent the industry with a commitment to the society and the environment.
8 India News
Duroflex puts across
Sleepwell Offers
positive message on
a Cocoon
Lockdown
Sleepwell’s latest mattress
As the COVID-19 pandemic has hit offers different feel on two
every industry hard, the the sleep sides of same bed.
and wellness industry too is trying Cocoon Mattress that
out newer strategies to cope with its offers different feel on
impact. Mathew Chandy, Managing two sides of the same bed
Director, Duroflex – one of the leading has been launched by the
mattress brands in the country, said country’s leading mattress
in an interview to a business news brand Sleepwell.
website that the company’s focus has With this, partners can
shifted from profitability to liquidity in customise their side of the
these times of crisis. mattress by interchanging
With a majority of professionals the top two layers of the
working from home, Duroflex has been mattress. They can change
putting across a positive message in it from firm to gentle or the
these times of gloom, focusing on the other way, depending on
importance of sleep hygiene to stay their preference.
focused on work. To further help its Cocoon is a triple-
customers keep anxiety at bay, the layered mattress with
company organized Sleep Therapy customisable top two layers and core bottom layer for support. The top two
sessions and launched a campaign layers have a different feel on either side – gentle and firm. The customer can
called Better Tomorrow. When all change the feel of the mattress by interchanging the layers – from gentle to
other companies are going the digital firm or the other way. It allows partners to have the mattress of their choice,
way to promote their products, just by interchanging the top two layers.
Duroflex opened an retail outlet and an
experiential centre in Bengaluru on
July 1. Startups think of new strategy
to grab market share
Wakefit.co introduces The startup storm has taken over the and commissions by offering their
sleep industry too, with a flurry of products online at a lower price.
second round of ‘Sleep brands using the direct-to-consumer They have adopted the – Mattress In
Internship’ marketing method to push their a Box – to appeal to the customers
products. These companies, which and grab the market share. As of now,
Wakefit.co, has announced the include Wakefit, Wink & Nod, NAP established brands like Sleepwell,
pre-registration process of the Cloud and Flo, etc. have worked out Kurlon command almost 50 percent of
second season of its programme, a strategy to cut out the middlemen the market share.
‘Wakefit Sleep Internship’. Under this
programme, selected candidates are
required to sleep for nine hours every
night for a period of 100 nights. After
the success of its first season that saw
over 1.65 lakh registrations.
Like last year, Wakefit.co is looking
for the best ways to round up the
sleepyheads from across the country.
Pandit Janardhan Dhruve famous Face
Reader from the Netflix show ‘Indian
Matchmaking’ along with Naveen
Kaushik, the ‘boss’ from last year’s
Sleep Internship, will review set of
profiles to determine which candidates
can make it to the final interview round
of the internship.
Neem Fresche is a technology that protects your home furnishing against
dust mites that cause skin problems and breathing disorders.
All Sleepwell products come treated with Neem Fresche.
Mattresses | Bed Sheets | Pillows | Comforters | Blankets | Mattress Protectors | Furniture Cushioning
www.mysleepwell.com • Toll Free: 1800 103 6664
10 Global News
NapCity offers COVID-19 wreaks havoc on sleeping patterns
personal sleeping COVID-19 has wreaked havoc on the Dr. Raymond Gottschalk, medical
spaces global economy, public health systems
and industries from tourism to summer
director of the sleep disorders clinic at
McMaster University. “We know that
NapCity, which makes pods mostly camps. Now, doctors say they’re seeing sleep restriction, sleep deprivation and/
used in airports for travellers to take an influx of patients with disrupted or sleep disruption can shorten lives,”
a quick nap on the move, has started sleep patterns linked to financial Gottschalk said.
offering these pods as safe private anxiety, fears of the virus or a lack of
areas for sleep without coming in daily routine. In China, researchers
contact with anyone in these times surveyed 801 frontline healthcare
of COVID-19. Company president workers and found that compared to
Stephen Rosenfeld said the pods the general population, they tested
are being sold as “private space as a significantly high on a scale used to
service”, and the company is pitching measure insomnia. Left untreated,
with hotels, offices and wellness insomnia could lead to lasting health
centres for the product. Rosenfeld repercussions, including weight
said that firms will soon be looking gain, heart disease, hypertension
for ways to use spaces like Napcabs, and diabetic predispositions, said
which takes up a mere 50 sqft area.
25% of US adults report of sleep deprivation
Dow giving new Life to
Chronic sleep deprivation is common in Lack of sleep leads to detriments in
Old Mattresses the workplace. About 25% of US adults job performance, productivity, career
If stacked, mattresses discarded reportedly suffer from insomnia, and a progression and satisfaction, and
in Europe every year would exceed similar number report regular patterns an increase in job-related accidents,
the height of Mount Everest – by of excessive sleepiness. Unsurprisingly, absenteeism, and counterproductive
678 times. Approximately 30 sleep disturbances increase the risk of work behaviors.
million mattresses are thrown cancer, depression, and heart problems. Conversely, better sleep has been
away, and most of this bulky, non- They also decrease productivity. linked to improved memory, knowledge
biodegradable waste-stream ends Meta-analytic studies show that sleep acquisition, and learning. Even
up in the landfill. Through its RENUVA deprivation is a strong inhibitor of short naps have been found to have
Mattress Recycling Program, Dow workplace performance, primarily by significant positive effects on work
aims to reduce this mountain of deteriorating mood. performance.
waste by giving polyurethane (PU)
foam from end-of-life mattresses
a new life. The program will take Virus impacted children’s sleep too
discarded mattress foam and turn
it back into raw material (polyols) The coronavirus crisis is having a early warning sign about the long-term
through chemical recycling, the significant impact on children’s sleep, negative impact coronavirus is having on
process of converting waste into with anxiety and lack of routine causing children’s sleep.
feedstock. The new raw material serious disruptions, experts have It supports a newly published paper
will then be used in flexible or rigid warned. The Millpond Sleep Clinic in from the Journal of Child Psychology and
foam products to go into applications London says there has been a 30 percent Psychiatry that suggests the potential
such as building insulation boards rise in sleep inquiries from parents for sleep problems to emerge or worsen
and even new mattresses.To make about children aged five to 13 compared during and following the pandemic is
this happen, Dow Polyurethanes with the same period in 2018-19. A high. The survey found that 70 percent
has been working with recycling common issue is that children are going of children under 16 are going to bed
companies, equipment and material to bed later and sleeping in more. A late – but are also waking late (57
manufacturers, brand owners and survey of 2,700 people in April gave the percent).
other value chain participants in
Europe to put in place a new business
ecosystem to create a circular
economy for polyurethanes. The
program aims to divert up to 200,000
mattresses from landfills in France
every year.Cover Story 11
What a Bug!
The Impact of COVID-19 on
the Mattress Industry
The pandemic has shaken up
a lot of businesses all over the
world. While many industries
struggle to find tiny signs of
survival and resilience, how
much spring does the sleep-
industry need to bounce back?
Or is it already up and about?12 Cover Story
A
s the world waits with bated But Ankur Bisen, Sr. Vice President
breath for a vaccine, some of - Technopak Advisors also reflects on
us may have been tempted at COVID-19’s Ripples on the new experiences that the customer
some point to search about the Economy and Consumer has gone through and which are going
evolution of the very idea of a vaccine. to define lifestyle in a big way. Home
Interestingly, most vaccines are nothing Index improvement is a key consumer interest
but some doses of the bacteria or virus • 55 percent consumers are most area now. “People are spending more
itself. When administered carefully, likely to buy groceries online. time at home. They are ready to spend on
and with a proper plan, even a harmful Even traditionally dominated space and visibility. Functional categories
element can change into a helpful sectors were forced to go of household segment will see a jump.
antidote. digital. Compact-seized bed solutions or bed-
• There is a trend of selectiveness cum-workstations or any such innovation
No one would understand that in spending – would be something that a customer
better than players in the mattress • In the scenario of highly will willingly spend on.” It is a good time
industry. For years and years, both effective economic to ride on the wave of new trends – like
top-tier and emerging businesses here interventions and effective storage-beds, hygiene products and
have struggled with many deep-running public health response, return concept-beds, he illustrates.
issues – a dominant unorganised texture to trend growth with strong
of the market, lack of standardisation, world rebound returning output Indeed. If we thumb through
customisation challenges, distribution to 2019 Q4 levels in late 2021. McKinsey & Company COVID-19 US
problems, lack of innovation and absence • Even if health response stays Consumer Pulse Survey, we will notice
of customer awareness, to name a few. effective, the situation will that Consumer confidence index dipped
What was the most unwieldy one here, change in case of partially- 7 percent in March YoY, but consumers
however, was the perception of ‘sleep’ effective interventions – this overindex for healthy products: 75
per se. Neither the average customer means showing slow long- percent are showing strong preference
bothered about the importance of a term growth and muted world to exercise and healthy eating.
good mattress or a sleep-accessory, recovery for rebound returning
nor the marketers talked about sleep- output to 2019 Q4 levels in late K.Senthilprabhu,
health as part of their promotions. 2022. Vice President, Sales
• In the case of ineffective Mattress & Cover
So when everyone was forced to not economic interventions, division, Global Textile
just stay indoors but also work from slow long-term growth with Alliance India Pvt Ltd.
there during the lockdown, a strange insufficiency to delivery full reasons that there is not much difference
shift happened. People suddenly rebound returning output to during the crisis. “As lockdowns open up,
realized that the more time they spent 2019 Q4 levels only until 2026 people are buying mattresses for increased
at home, the more they paid attention usage at home and weddings. It is a
to the comfort and quality of that thing Source: McKinsey & Company COVID-19 US positive side for the industry. A lot of new
Consumer Pulse Survey
called ‘mattress’. Among other home companies, specially online ones, are doing
renovation efforts; spending on, and good.”
upgrading, products related to sleep
also came on the top of the Indian Sanjeev Kapoor, CEO, Indian Silks
customer’s radar. At the same time, the Advisors about the overall retail also feels that crisis has been a blessing
industry was grappling with general landscape and consumer mood that in disguise for the industry. “The online
issues that were causing trouble in the pandemic has created and he gives segment is doing very well. The People
other business segments due to the a peek into a segment that is helpless are investing in a good mattress due to
pandemic – like lukewarm economic because of economic constraints. “The quarantine periods and work-from-home
outlook, dip in overall spending, a long collapse of demand and dip in household scenarios. Online segment will dominate
pause on retail activity, logistics and income are aspects that have affected the industry and unless it is a high-
supply-chain bottlenecks. So has the the total money scenario for an average involvement purchase with a strong brand
crisis worked like a vaccine or as a virus? household. That means a suspension of pull in the customer’s mindspace, people
Did the pandemic emerge as good news discretionary consumption – like holidays, will lean towards online orders and price
or bad news for the industry? weddings, tourism, jewellery, luxury attractiveness.”
activities, hotel stays etc. The focus on
Consumer Behaviour – value is suddenly becoming paramount. Mahesh Narayanan
It all begins and ends People are either suspending those Gopalasamudram,
there purchases or toning it down – like a used Chief Operating Officer
Ask Ankur Bisen, Sr. Vice car or a lower-priced car instead of a new (COO) in Sheela Foam,
President - Technopak one.” and Chairman of Indian14 Cover Story
Polyurethane Association (IPUA) echoes
this shift. “There are two ways to look at
the impact. People are now upgrading and
that is helping the furniture and bedding
industry. We are witnessing a spike in the
European and Australian markets. This
is because people are saving time and
money from other activities - like eating
out, vacations etc. This surplus time and
cash has awakened people that they need
to invest in essentials. When you are sitting
on a chair or couch or bed for long hours
during the lockdown, you want to upgrade
it. In India, we are still on a rebound to
a certain level for the online segment.
The organised segment is not as strong
because of uncertainty, containment and
lockdowns.”
Mathew Chandy,
Managing Director,
Duroflex Pvt. Ltd
points out at another
interesting shift – sleep
has got comfortably perched on the me more aware of things that needed
health plank now. “It is now more widely doing”. Not-so-Side
understood that good sleep can boost your Effects of
immunity from viruses by 4x. Previously It was also observed here that home COVID-19
seen as a lifestyle industry, the pandemic improvement project intent during the
has helped to place the mattress and sleep next year is actually up slightly despite 1. Supply chains take a hit
industry closer to the health and wellness the pandemic. 2. Logistics becomes a challenge
space.” due to fluctuating lockdowns
So the wave had already started. It will 3. Job uncertainty and economic
Even the latest U.S. Census Bureau not subside after the pandemic and may, environment affects
report is a big hint here. Turns out that in fact, find more force as people look at discretionary spending
home centers, hardware stores, garden their homes differently and for longer 4. Increased awareness and
centers and building materials suppliers hours now. It is not hard to imagine the respect for sleep products
realized a year-over-year sales spike of depth and volume of spending that will 5. Consumers start paying
22.6 percent. This dominated all retail come into home-improvement spill-over attention to, and start spending
categories except for online purchases. areas. Mattresses and home comfort on, home improvement
Retailers are now serving the home products would ultimately gain from the 6. Online sales pick up on the
improvement market as homeowners positive ramifications of the surge that is demand side
are doing projects during the pandemic. being witnessed in home improvement 7. Players start diversifying
Another research, from Consumer space. Customers have been woken up heavily towards online offerings
Specialists (a research and consulting to the vast realm of possibilities and 8. Redundant marketing expenses
firm specializing in home improvement needs that they are now realizing due get wiped away
related industries) and the Home to the extended lockdown. The spending 9. Brand value loyalty manifests in
Projects Council, notes 57 percent of on mattress as a category can be a strong way
homeowners putting an emphasis on discretionary and replacement-oriented 10. New health-oriented offerings
home improvement during the first also but it would, nonetheless, be a in high demand and more
three months of COVID-19. segment where customers are paying launches in progress
attention. Unlike other businesses
Looks like these homeowners spent that have been deferred to a ‘post-
$1,750 making home improvements. lockdown’ category in the customer’s Supply Chains and Factories –
A lot of them ((66.9 percent) explained mind, this space would find a new wave Surviving the Blow
time as the primary reason driving of demand that has to be met with the It is not hard to dismiss the dent on
their efforts. As many as 50 percent of right offerings, experience, service and manufacturing and logistics that has
homeowners said - “time at home made innovation by the players of the industry. been felt due to the pandemic. But theCover Story 15
Bain Macro Trends Group raised
the Coronavirus Situational Threat
Report (SITREP) Index from level
6 to 7. This level implies that
businesses should activate second-
level contingency planning.
The index is scaled to facilitate
the calibration of business-
contingency policies along a
stepped continuum—from normal
operations (level 0) to severe
global recession with global-scale
operational disruptions (level 10).
It is adjusted to take into account
a continuum of milestone events
that reflect the increasing severity
of the epidemic’s effects on the
business operating environment.
Source: Bain & Company
impact suffered by manufacturing is Home and health has so they are still not affected badly. But at
only serious on the supply-chain side
while for other functions the impact is
taken a priority - now the end of the day if demand does not pick
up, it will affect everything.”
starker, deeper, multi-dimensional and more than ever - which
less temporary - as shared by Mahesh He is also noting a shift in the way
Narayanan Gopalasamudram, COO, has made people product quality and component-focus
Sheela Foam, “In manufacturing, we are realize the importance will be embraced now. “Our company, as
70 percent of where we were. But sales an adhesive maker, has an opportunity
and marketing are a tad stressed out. of sleep, that has been to work with a cross-section of the
However, post-lockdown lot of things will
change forever.”
a blessing in disguise industry - like dealers, unorganised
players, organised players etc. We see
for the industry. Online that, going forward, those companies
Speaking on the lock down effect on that will become nimble with cost
logistics and supply chain, he says that segment will dominate structure and go-to-market strategies
the lockdown has impacted logistics the industry will fare better than traditional networks
and supply-chain majorly. “We realized and approaches. We have already
two points when government imposed started witnessing a transformation
lockdown. First it would be hard to get all, a lockdown brings down customer from brick-and-mortar to omni-channel
contractual employees and logistics would mobility to a significant degree. models; and this trend will only amplify
be difficult due to non-availability of ahead. A lot of ecommerce start-ups will
drivers and restrictions at check post and Brijraj Chaitanya proliferate ahead. Aspects like semi-
vehicular movement etc. So, we decided Desai, Business automation, and quality consumables
to simplify most of our manufacturing Manager, Industrial will get stronger. So consider that
and supply chain process increased more Adhesives, Pidilite adhesives may make five to seven
automation. This helped us in maintaining Industries Limited percent of mattress manufacturing but
supply-demand equation. Even our supply surmises that the short-term outlook in terms of risk of failure, the impact is
chain partners could manage in sending is bad but the mid-term and long-term very significant.
required raw material with the existing and view is good for the organised segment.
available stock”, he adds. “There is a direct impact on manufacturing Another change will be that of
and logistics because of frequent industry consolidation in favour of
He explains that consumer-side lockdowns. The supply chain has suffered organised players. This is because some
facing business areas have been from erratic production and scheduling unorganised players may not have deep
severely affected while manufacturing issues due to lack of clarity on inter- pockets to survive the pandemic. Going
areas are not laden with as many state transport movement. Functions like ahead, the real craft for any company
worries as those functions have. After marketing can still be remotely managed would be in its business model. The16 Cover Story
because we are shipping with disclaimers
and with demand-based quantities. A
major help here is from availability of rolled
format of mattresses. Both customers and
transporters find the rolled version better.”
Ankit Garg, CEO and
Co-Founder of Wakefit
is of the opinion that
as People spend more
time on a sofa or a bed,
they are realising the ergonomics of
furniture. “ Conversations have moved to
aesthetics, ergonomics and the value of a
mattress now. People spend more time in
their house so they realise the importance
of the home products. Overall, demand
in the online segment has gone up (30-
40 percent in the last four months). It is
a tectonic shift in the mindset of people.
before spending the same way they did People are forced to choose online for even
Families are making homes more before the Covid crisis. There is a heavy smaller-budget items so this has led to a
comfortable – that means a uncertainty hanging in the air about decent acceptance of the online model in
demand for furniture, specially jobs, retrenchment and income stability. India. India is experiencing a big shift that
antibacterial or non-corrosive Savings, as a word, has acquired new way. It will affect the online segment with
materials and serious connotations now. How can a strong growth rate.”
Sales of items from hand soap we expect mattresses, which are still
and mouthwash to vitamins have part of non-essential and discretionary Mahesh Narayanan Gopala-
gone up 29 to 162 percent since category of consumer spending, to not be samudram, COO, Sheela Foam reflects,
February 2019 in countries around affected? We have to operate in a lean and “In the past, a dining chair or bed was not
the globe: mean fashion now. Overheads have to be an office desk - and not for eight hours.
reduced in a drastic way. At the same time, But now the thought is different. It is a
Source: Nielsen and Kearney transport is not easy when different states drastic change which will spill-over to real
follow different guidelines. Logistics is not estate segments. Similarly, the mattress
the same anymore because containment industry will see a big shift. This is a good
organised segment would be able to zones differ for every region. This is a time change and will bring 20 to 40 percent
bounce sooner than others because of constant flux. Not much planning is transformation in the industry, I reckon.”
of financial resilience and better brand possible in such a period. It is a wait-and-
equity.” watch phase.” Strangely, but strongly, the cash flow
has changed a lot during the pandemic.
The Bitter-Sweet Reality A strange corollary of this situation is Raghav Menon, CEO Mattress Division
While people may have realized the the way online segment has picked up. at Sobha Ltd. reasons how online sales
importance of home comfort and Raghav Menon, CEO Mattress Division at is all about upfront cash. “There is no
products like mattresses during the Sobha Ltd. also cites how the company delay or 60-90 days waiting period that
lockdown, it would be imprudent to has introduced different offerings for the offline dealer model usually has. Also,
shrug away the hard changes that this leveraging the online momentum. “We the big and glossy sops that companies
period has inflicted on the industry. have launched new variants so that it is used to offer dealers and distribution
easy for customers to understand what are absent. International travel, fancy
Raghav Menon, we offer. Also, people have realized the holidays and hotels – all that unnecessary
CEO Mattress Division significance of a mattress during the expenditure and marketing weight has
at Sobha Ltd. presents lockdown so some of them want to replace thinned down. Online is definitely the way
a candid picture of a really-worn-out product. We are catering forward. That said, the degree of control
the scenario when he to that demand with online sales. Online available for offline model is higher than
explains the 50 percent impact that the options have been a saving grace for many online format.”
market has suffered. “Stores are closed. companies. If we lost 50 percent business
People are reluctant to go for a touch- offline, we captured 40 percent online so So home-improvement spending
and-feel shopping. Except for groceries the net loss impact of Covid crisis is just and online channels seem to have come
and staples, people will hesitate for long ten percent. Logistics is also easy here into the spotlight during the lockdown.18 Cover Story
Give them simplicity,
safety, transparency
and accessibility when
consumers return
Kearney investigated four potential
recovery scenarios for society and
the economy
• A rapid return to business as
usual - no major second wave
of cases materialises and a
rapid consumer confidence
recovery happens
• Disruption and recovery –
with multiple waves, social
It is evident in the Mckinsey survey as innovation-led growth. Investments in distancing restrictions,
well that the speed of going online has innovation are suffering. Most executives consumer adjustments to the
accelerated for consumers – with 20 feel that they will return to innovation- new scenarios
to 60 more consumers who are now related initiatives once the world has • Disruption hits hard -
digital. This indicates a metamorphosis stabilized. They want to secure the core Consumers don’t adjust. ‘No
of demand – and turns out that it is first until the path forward is clearer. But normal’ state for confidence
unlikely to reverse quickly. All that is may be the smart thing to do is what recovery
manifesting into new behavior patterns merely a quarter of these executives • Slow consumption engine - no
– like switching has accelerated. are doing - capturing new growth as a major second wave of cases but
top priority (first- or second-order). It ongoing economic crisis affects
Interestingly, as per Moengage, is easy to belong to the 60 percent that recovery
North America and India have seen did so before the crisis hit. But that’s Kearny research reckoned that only
a notable jump in active users not going to drive businesses into the scenarios C and D are probable.
respectively, on online shopping apps. post-survival set of challenges and Disruption can hit hard and
Consumers in Southeast Asia have opportunities. It is easy to lose sight of consumption will be suppressed for
showed some hesitation to shop online innovating when all hands are on the a sustained period of time.
because conversions have plummeted deck. But this is exactly the time to look
to its lowest. for the new swathe of customer needs
and market gaps that will unfold once continue and build up on the momentum
What Next? the storm is past and once the dust after the lockdowns ease out. Once the
Let’s look at what ‘Innovation in a Crisis’, settles. The industry should make sure lockdowns lift properly, there would
a report from McKinsey & Company that it is riding the waves of ‘attention be two segments that will be strong
told recently. This survey of more than to home’ and ‘health’ in a strong way and will grow from value-addition by
200 organizations across industries and with the right offerings. That is mattress makers: hygiene and offerings
indicated that over 90 percent of something that cannot be postponed like anti-bacterial or anti-mosquito
executives expect the fallout from until the lockdowns ease out. products as Sanjeev Kapoor, CEO, Indian
COVID-19 to fundamentally change the Silks tells.
way they do business over the next five Innovation is the best way to move
years. Most of them are asserting that forward. Many players are moving to K.Senthilprabhu, Vice President,
the crisis will have a lasting impact on significant value engineering and are Sales Mattress & Cover division, Global
their customers’ needs. trying to also bring hygienic products Textile Alliance India Pvt Ltd also feels
anti-microbial qualities in their portfolio. that in the next few months when things
Ironically, the most important need Companies are also ensuring that when normalise, we expect good momentum
here – innovation – can easily be put it comes to the store experience, the in the retail segment. “There is a lot of
on a back-burner as businesses focus buying process is done in sanitised, demand in the online segment.”
on ‘survival’. The report notes that spacious, well-aerated and low-risk
executives are busy weighing costs, environments. Consider how Vivek Iyer, Partner,
driving productivity, and implementing Financial Services, PwC assesses the
safety measures against supporting The industry should be prepared to scenario here. “There is a lot of pentCover Story 19
• About 46 percent of Indian
businesses feel ‘very strongly’
impacted by the pandemic
• Almost 54 percent felt they
were as well prepared as they
possibly could be
• Some 29 percent Indian
businesses indicated they are
operating as normal
• About 73 percent of them
talk about either having a
management that is sufficiently
agile or being strong overall and
able to manage with a number
of adjustments
• Two percent businesses in India
feel that their long term survival was unable to spend during the lockdown. The mattress industry
is threatened
• The most important aspect for
As mentioned earlier, so far as the mode
of delivering the demand is within the
should look for value
around 42 percent of Indian acceptable parameters of social distancing, addition in the hygiene
businesses - is to review their the discretionary-spending will be back.”
suppliers’ ability to weather offerings in coming
future uncertainty. As to how India Inc. should respond days. The new designs,
As many as 64 percent of Indian to the new set of challenges and how
businesses see the current industries like wellness, mattress, innovation with health
environment ensuring positive
changes to their products /
home improvement and lifestyle should
re-orient themselves, Iyer opines
benefits like anti-viral
services that wellness and lifestyle is a great offers could be the new
industry to be in. “Never has having a
Source: HSBC’s Navigator report ‘Building strong immunity been in higher demand path of the industry.
Back Better’. As per a survey conducted on than what it is today. So I think it’s a great
more than 2,600 companies across 14 global
markets - including 200 firms from India
space to be in and any services that can be and differently. The view of work has
delivered keeping immunity to the core will changed, in a quintessential sense.
do well for the industry.” This change will affect how people look
up demand that will see some traction at their homes – their family time and
as people emerge out of the lockdown. In his prognosis, home improvement household expenses. This might lead
While the lockdown has surely impacted and mattress will do well, because the to interest in minimalistic furniture and
the medium of delivery of the demand, work-from-home model needs home to functional items. That is a good hint for
the demand exists. I will try to explain be a far more comfortable place today major players which are considering
this with an example. If there is a than what was expected in the past. serious innovations. Customers will
demand for a pair of t-shirts, the same “On what India Inc should do overall - be eager to embrace any solution that
would be ordered by a digital app ( turn this adversity into an opportunity by frees up space but gives comfort.
Myntra for example) rather than buying accelerating digitisation. That’s the theme
it from a store. The demand for clothes I think India Inc should go with and then As Bisen captures well, the ‘new
is there, but the medium of delivery is dovetail all initiatives to this theme.” normal’ may not mean that economic
digitally enabled. The Z shaped recovery uncertainty will go away. “Sustenance
basically stems from many examples Bisen also augurs that e-commerce and conservation of energy and resources
like this where pent-up demand would and work-from-home would be strong are deep impacts of the pandemic – they
explode and then settle back to the for some time, for many white-collar will remain as strong traits of consumer
long-term trend level. people. That means the idea of an behavior in the future too.”
office is going to change in a big way,
Consumption is not affected specially for industries like telcos, IT- If we look at how Mercer dissects
in a hard-to-redeem way during ITeS, entertainment etc. it in its study of the estimated impact
the lockdown, the way he sees it. of COVID-19 on financial performance
“Discretionary spending will be back to its “The consumer is more liberated and for 2020, we will see that low impact,
original levels, as discretionary spending independent now. The forced-lockdown financial performance is expected to be
came from a certain demography that has forced many people to work digitally on or above budget for 15.55 percent.20 Cover Story
• 90 percent executives believe
that the COVID-19 crisis will
fundamentally change the way
they do business over the next
5 years
• 85 percent are concerned
that the COVID-19 crisis will
have a lasting impact on their
customers’ needs and wants
over the next 5 years
• 21 percent have the expertise,
resources, and commitment to
pursue new growth successfully
• Nearly three of four executives
agree that changes brought
about by COVID-19 will be a big start to ease in a gradual way. “People that invested in innovation delivered
opportunity for growth, with do not want to risk themselves. Recovery superior growth and performance post-
variation across industries may be reassuring but the expenses of crisis. Numbers show that organizations
• Commitment to innovation has exposure to the disease - financially and that maintained their innovation focus
decreased as companies work physically- are high. Job uncertainty and through the 2009 financial crisis, tended
through the COVID-19 crisis financial issues will continue to have the to emerge stronger and outperformed
and focus on short-term issues spill-over effect here. We will have to wait the market average by more than 30
• Exception: pharmaceuticals and for at least three quarters till the situation percent. They also continued to deliver
medical products – that show improves considerably.” accelerated growth over the subsequent
a 30-percent increase in the three to five years.
immediate focus on innovation It seems that the industry has
• Two in three executives believe experienced a lot of new factors and Businesses should be ready for
that this will be the most learnt a lot of new strategies during new sales models, new competitors
challenging moment in their the pandemic. Some of these shifts will from different industries and the
executive career survive even after the crisis is over. As need for new offerings if they are
long as players remember what worked serious about conquering the crisis.
Source: McKinsey & Company – and what failed, the crisis will leave McKinsey & Company outlines in a
Innovation in a Crisis
something of value for the industry – report that competitive advantages
long after it is over. shift dynamically as business models
“Recently, we have adapt to new market realities. That is
seen how natural and Going forward strategy why the core capabilities that made an
human-led disasters What is especially important to bear organization distinctive may suddenly
have caused many high in mind and in strategy maps is the be less differentiating. It is also
profile events as well as unwavering momentum of innovation. important to realize that while the rise
significant losses of life and property. All As experts from McKinsey & Company of digital has been mounting similar
this has underlined business vulnerabilities also advise, this is the time for pressures for more than a decade, what
to environmental factors. That’s why identifying and quickly addressing the current crisis is doing is significantly
many players are implementing business new opportunity areas being created exacerbating and accelerating its
continuity plans and adopting more by the changing landscape. The crisis disruptive forces.
sustainable business processes. Business time means actions that are about
continuity and sustainability have long and reevaluating the innovation initiative In Ancient Egypt, the beetle was
distinguished histories. We see a strong portfolio and ensuring resources are considered a sign of good luck because
momentum for sustainable strategies and allocated appropriately. Businesses of this silent hard-worker’s ingenuity
innovations ahead.” adds Pankaj Gupta – should be building the foundation for and ability to always find new life
MD of RP Foam Home Pvt. Ltd. post-crisis growth in order to remain through the sun. A bed bug bites
competitive in the recovery period. humans but a good beetle is a recycler
Tighten the belts now – advises that chews plants and fibre. Whether as
Raghav Menon, CEO Mattress Division If you want to gain long-term a good-luck charm or as a reset button,
at Sobha Ltd. He does not mince any advantages, there is a need for this crisis has turned out to be quite a
words when he says that it will be a understanding such shifts and the beetle for this industry. Hope the dots
tough time ahead because the fear opportunities they present. It is hard to are going to a sunny place as we step
factor will still haunt even as lockdowns dismiss how in past crises, companies out to the ‘new normal’.22 Feature
Aatma-Nirbhar Mattress:
From survival to success
T
The Covid19 he COVID-19 global pandemic World Bank’s report mentions, “stringent
has truly disrupted our lives like measures to restrict the spread of the
period has had nothing else ever did in the past virus, which heavily curtail activity, will
many decades. As the scourge contribute to the contraction.”
several types of of virus that emanated in China and
impacts on our spread over the world refuses to abate,
countries have had to evaluate their
Amidst the gloom and doom, Prime
Minister Narendra Modi on May 12
life. It has pushed position in relation to the epidemic.
The epidemic has been an unequivocal
addressed the nation and spelt out a
plan for economic revival. He urged
the local industry disaster for the Indian economy.
The condition of our economy was
Indians to follow the route to ‘Aatm-
Nirbharta’ or self-reliance. And so,
to support the life already in a vulnerable state when the he launched the Aatmnirbhar Bharat
epidemic struck India. With quarantine initiative. This appeal was made along
in this pademic measures in place that resulted in the with an announcement of an economic
world’s biggest and stickiest lockdown stimulus package of Rs. 20 lakh crore
crisis period and the economy took a big hit, like some that is around 10 percent of the GDP. The
hence there is a collateral damage. Experts opine that
with the traditional supply and demand
primary intention behind the scheme
was to boost demand and improve the
voice rising for chains broken, the country is likely to
face a protracted slowdown.
supply chain in different sectors of the
economy. During his speech, PM Modi
self-reliance. The length of the COVID-19
spoke about how “India stands today at
a point where it has to decide to become
“Atma-Nirbhar” in pandemic will dictate the scale of self-reliant”. He also gave a slogan, i.e.
the economic hardship, the longer it “Be vocal to be local” which practically
mattress industry is stretches, and the worse the impact will means to adopt and use products made
be. Recently the World Bank had stated in India instead of foreign ones. This
the new challenge that based on financial performance, would lead to import substitution and
and the new India’s economy in the current fiscal
year is expected to contract 3.2 percent,
lead to growth.
opportunity. downgraded from its previous forecast
of 5.8 percent positive growth. The
As part of his policy announcement,
PM Modi also laid down five pillars forFeature 23
Aatmnirbhar Bharat initiative:- Atma-Nirbhar Bharat the next five years to constitute 37.5
First pillar: An economy that takes
is also very relevant percent of the market by 2022.
quantum jumps and not incremental for the mattress Prompted by economic growth over
change the past couple of years, the home and
industry, as many of decor industry grew in strength as well.
Second pillar: Infrastructure that should the manufacturers, Interior decoration as a career option
be world-class and becomes the identity has become viable and fashionable only
of India that is synonymous with the distributors, etc. fall in the past few years. Yet, a mattress,
idea of modern India.
into that category. which plays an essential role in a person’s
life, used to be the last thing on priority.
Third pillar: A system that is based on Experts opine that with People were unaware of the different
the technology-driven arrangements, types of solution that are available, and
fulfilling the dreams of the 21st century, the traditional supply more importantly, they were ignorant
not the policy of the past century. and demand chains about the impact a right mattress can
have on their sleep patterns and thus
Fourth pillar: Demography which is the broken, the country their health. Thankfully, the scenario
source of energy for a self-reliant India. is likely to face a is changing now, people are becoming
aware of what a mattress is, and the
Fifth pillar: Demand, whereby the protracted slowdown difference between buying a cheap local
strength of India’s demand and supply brand versus buying a branded product.
chain should be utilized to full capacity. Primarily, the organized mattress
He underlined the importance of Enterprises (MSMEs), Government markets comprise three types of
strengthening all stakeholders in the of India, had issued a notification mattresses, namely, coir, PU foam and
supply chain to increase, as well as asking all business entrepreneurs and Spring mattress. All the popular names
fulfill, the demand. suppliers to inform the government like Orthopedic Mattress is a generic
whether they are dealing with essential term and any bedding that provides
Avoiding dependancies items required for fighting coronavirus lumbar support is ortho mattress.
The Micro, Small, and Medium outbreak. The ministry has released
Enterprises (MSMEs) sector is at the a list, and the mattress industry fell According to ‘India Mattress Market
heart of this domestic push by the in the auxiliary supplies list. This was Overview, 2016-2022’, market share
Modi government. The MSME sector especially necessary as governments of unorganized players is expected to
employs close to 40 percent of the were ramping up the hospital to create drop drastically in the coming years.
Indian workforce and has a significant beds for COVID-19 patients. And hence Nowadays, consumers have even started
contribution to the GDP and export bedding or mattresses were an essential buying from international brands because
sector. Little wonder, even in his speech commodity. of their high quality and contemporary
PM Modi emphasized the role played products. In India, organized players
by the MSME sector and how it will The changing market sell mattresses through two mediums,
play a critical role in the economic The mattress industry in India has one is offline, and the other is online.
revival. The industry too included the changed much in the last couple of Offline mattress market consists of
Atma-Nirbhar Bharat Abhiyan, with the years. Accounting for more than Rs. retail sales of mattresses from dealers/
Finance Minister subsequently making 11,000 crore, it is projected to reach Rs. distributors or own franchised stores.
announcements for the sector. The idea 14,000 crore by 2021 with a CAGR of 9 On the other hand, the online mattress
is to shore up the industry, and use it as percent. The growth of the industry has market consists of transactions which
a catalyst for economic resurgence. If been boosted by the expansion of the occur through e-commerce websites like
the segment is revived, it will contribute online retail industry that has aided the Flipkart, Amazon, Snapdeal, FabFurnish,
significantly towards employment and manufacturing to grow at a healthy rate. Urban Ladder etc. or company’s
increasing liquidity flow in the economy. This is a sterling achievement. Because personalized website.
the industry has gone a significant shift
The push for Atma-Nirbhar Bharat over the last few years from a mostly Customers’ way
is also very relevant for the mattress unbranded market to a branded one. Generally, Indian customers have an
industry, as many of the manufacturers, The branded market comprising large, inclination of going to the showroom,
distributors, etc. fall into that category. mid-size and smaller manufacturers feeling the product and then deciding
Many manufacturing companies constitute around 34 percent of the on the purchase. The Indian buyer
fall under the ambit of MSMEs. The market, with about 20-25 players is also very price-sensitive, and any
importance of this sector can be gauged spread across the geographies. The last-minute price cuts can be a deal-
by the fact that even under the lockdown, branded mattress market is expected clincher. This is one of the reasons why
the Ministry of Micro, Small and Medium to grow at a CAGR of 13 percent over the offline channel is very popular with24 Feature
consumers, and this is the reason why for Service MSMEs and Rs 25 lakh for
big brands have also expanded their manufacturing.
retail footprint across the length and The Domestic
breadth of India. Branded mattresses
are broadly sold to two end users viz.
Small units: For an MSME to be defined
as a Small unit, its investment limit
Gameplay
residential and institutional. With the has been raised from Rs 5 crore to Rs The introduction of Atma-Nirbhar
spurt in the housing sector, demand 10 crore with a turnover of fewer than Abhiyaan could be a game-changer
for branded mattresses has been on 50 crores. This applies to all MSMEs for the mattress industry in India.
the rise, as this segment of customer is including the Service enterprises which With the emphasis on domestic
keener on quality than merely on price. earlier came under the investment of up manufacturing and the benefits
According to the survey, among various to Rs 2 crore. that will be provided to the MSME
sizes available, King size mattresses are sector, there are a lot of players
the most preferred one, and comfort is Medium units: Enterprises with in the mattress industry that can
an essential factor while choosing them. investments up to Rs 20 crore with a avail the various benefits from
turnover of less than Rs 100 crore will the government scheme. One of
Institutional demand comprises now be called Medium units. Earlier, the the first things that the Finance
products sold in hospitality, real estate investment limit for Medium units was Minister did was to standardize
and other segments. For instance, as up to Rs 10 crore and Service enterprises the definition of MSME, previously
of now, the most significant demand up to Rs 5 crore. the characterization centered on
for the mattress is coming from the investment and not turnover. Also,
medical side. As hundreds of beds Based on these definitions, the the minister made it clear that
are being created across India to deal government has announced some there will be no distinction between
with COVID-19 patients, there is an exciting benefits that can be availed by service and manufacturing MSMEs.
enormous demand for mattresses that the companies:
are the right fit, namely, cost-effective • Collateral free automatic loans of • Emergency Credit Line to Businesses/
and also good quality. INR 3 lakh crores will be provided MSMEs from Banks and NBFCs up
for business, including MSME’s to 20 percent of entire outstanding
Here is how the new which are badly hit by the pandemic credit as on February 29, 2020;
definition looks like: and requires new funding to meet • Borrowers with up to INR 25 crores
Micro units: MSMEs will now be called operational liabilities, buy raw outstanding and INR 100 crores
Micro units if they have investments up materials and restart the company. turnover eligible;
to Rs 1 crore and turnover of less than • Following benefits are provided • Loans to have 4-year tenor with
Rs 5 crore. The definition earlier was on under the collateral-free loan a moratorium of 12 months on
investment criteria of up to Rs 10 lakh scheme: principal repayment;You can also read
