Moving from packaging business to mattress industry, Archit Gupta, Managing Director at Real Innerspring Technologies Pvt. Ltd has left no stone unturned to revolutionise India's mattresses industry by sealing the deal with US based mattress brand King Ko
What was the reason behind your brand's licensee agreement with Real Innerspring technologies Pvt.Ltd?
King Koil, an internationally acclaimed and magnificent mattress brand, has signed a sole licensee agreement with RITL India. At the pinnacle of being the fourth largest mattress brand in the world, the licensing has accrued from the authenticity of the fact that Real Innerspring Technologies Pvt. Ltd. Mattresses is India's first manufacturer of patented spring mattresses and is opined as a recognised brand name in the Indian retail and hospitality markets through a decade of intensive domestic and international exposure. The mattress making market is growing rapidly. In a developing economy like India, there are bouquets of mattress making brands and every brand caters to the different bunch of audience. Established in the year 1898 with six employees, King Koil is today present in more than 80 countries throughout the world, with its worldwide headquarters located in Chicago, USA. Over the years King Koil has become a mark of superior technology in sleep along with commitment to quality and service that remain the same everywhere in the world.
How much expansion are you seeking to tap via recently signed agreement with King Koil?
King Koil India has plans in the next five years of spanning into market expansion and investing Rs 400 crore in varied fields like facilities, human resources, channel management, indigenous R&D, etc. While envisaging strategic expansion, the company would also look at strengthening its presence nationally through distributorships, tie-ups with multi-brand outlets, opening of exclusive outlets and aggressive brand awareness. We have plans to introduce the King Koil brand to 300 to 450 multi-brand outlets this year. Moreover, it will open 13 dedicated outlets this year. By next year, it aims to make an overwhelming impact on the mattress industry and create a large consumer base.
Moreover, it will open 13 dedicated outlets this year. Starting from North India, with our presence in the markets of Delhi NCR, Mumbai, Gujarat and Punjab, we plan to focus on Southern India also.
Challenges that your company faced at the initial stage.
The mattress industry in India is still largely unorganised and there is stiff competition in organised sector. Being a new company, getting placement in the market during initial phase was challenging as it happens with any fresh start ups, but with persistence and patience we have stood the test of times.
What according to you is the market size of mattresses industry in India?
According to our data sources, the Indian mattress market size is approximately about Rs 5,000 crore ($ 900 million). Accordingly there should be above 12,000 retailers of different mattress product mix. Majority of retailers are in the unorganised sector (70-75 per cent) who are selling majorly low end cotton and foam fillers mattresses. Whereas the organised sector of approximately about $225-270 million comprises majorly of coir, rebounded foam and foam combination products which constitute to about 80 per cent of this segment. The remaining 20 per cent ($45-55 million) constitutes premium and high-end product mix comprising spring, premium foam combinations and niche products. The organised sector in metros typically generates volume in the range of Rs 3 15 lakh ($ 5500 $ 28000) per month.
Considering the inflation and rupee depreciation, how do you aim to keep your sales intact? How do you wish to beat the competition?
Rupee depreciation is rather good for the Indian mattress industry, as this will decrease further possibilities of imports that take place in this segment. We are looking forward to the season time which takes place from the beginning of October to offset inflation and other economic worries. Our international brand-presence in existing market along with our promotional schemes are sure to create a dent in competition with comfortable sales during these tough times.
What kind of market survey do you conduct before entering into new locations/cities?
Unfortunately, there is hardly any organised company which has conducted any intensive survey of the mattress industry throughout India. Due to this, we evaluate the current size and opportunity of the markets by our strong judgment by analysis of target market strengths and competition, dealers' network and other critical information through various sources.
What criteria do you follow before selecting distributors and dealers?
For distributorship, we need strong financial background in trade expertise and good connections with network. Whereas for dealership, we evaluate the location, clientage and payment terms of any potential dealer.
Where do you see your company's growth five years down the line? How much share of India's mattress industry are you planning to tap?
We are currently growing at a pace of 25 per cent compound annual growth rate and we wish to maintain this growth rate five years down the line. Currently, we see ourselves at about 6-7 per cent of organised premium mattress market share and over a period of five years, we wish to grow at about 10-12 per cent.
While envisaging strategic expansion, the company would also look at strengthening its presence nationally through distributor-ships, tie-ups with multi-brand outlets, opening of exclusive outlets and aggressive brand awareness.