The mattress market: The battle for a market share of trillion VND

The current mattress market is not only a race between big enterprises and some famous foreign enterprises, but it is also an opportunity for start-up businesses.

Huge potential

According to statistics of the Center for Information Technology, under the Ministry of Culture, Sports and Tourism, in 2016, Vietnam has about 420,000 rooms registered for accommodation services. Thus, the demand for bed sheets and mattresses for hotels is about 3,000 billion VND.

Not to mention, on a larger scale, Vietnam currently has about 25 million families and according to incomplete statistics, about 40% of these use mattresses. With the average lifespan of each mattress being 7 years, the Vietnamese market will need at least 4 million new mattresses each year, not to mention the needs of new families. As an average purchase price of each bedding set is 4 million VND, the market for mattress retail will be about 16,000 billion VND. This is considered a very good potential market for domestic and foreign enterprises.

In order to meet the needs of consumers, many enterprises have focused on improving technology, production process, creating quality products which can compete with foreign brands, and even send Vietnamese mattresses for export. Domestic famous brands include Kymdan, Lien A, Kim Cuong, King Mattress...

With foreign mattresses, South Korea is showing its “dominance” in Vietnam’s mattress market with three famous names, Hanvico, Everon and Vikosan. These 3 mattress brands are leading the market with spring mattress products, antibacterial cotton mattresses, rubber mattresses and water mattresses. They are also popular among Vietnamese consumers. Other brands such as Kingsdown (USA), Dunlopillo (England), Therapedic (USA) are for high-income consumers.

Ms. Nguyen Thi Van Anh, Managing Director of Kim Cuong Mattress Co, Ltd., said that the company's revenue is about 1,200 billion VND, an average growth rate of 25% per year, with the capacity of the company at 20,000 tons of mattresses/year. Kim Cuong mattresses serve the needs of consumers through more than 3,000 sale agents across the country.

In order to achieve the above results, according to Ms. Van Anh, the products of her company must create real value for the community and consider quality as the leading factor. “Over time, the company has invested to build modern production lines, catch up with the technological level of the world to serve consumers with quality products, diverse in models and costs,” she said.

Mr. Hoang Tuan Anh, Director of Mattress King Joint Stock Company, said that there are 40 stores in 23 cities and provinces nationwide, mainly in Hanoi, Ho Chi Minh City, Hai Phong, Can Tho. “The plan of the company in this year is to develop the system to 70 stores and launch from 60-100 new stores per year. Besides that, the company will focus on building and training teams, perfecting models and information technology systems to serve the management and operation of the company,” the CEO of Mattress King said.

Mr. Lam Ngoc Minh, Director of Lien A Mattress Company said that the company always focuses on developing production and business to meet the domestic demand and export. By the end of 2017, Lien A has been present in 38 international markets. In the domestic market, the company has built up a wide distribution network with 52 sale agents with mattress products that are rich in designs and prices.

With export markets, according to Mr. Lam Ngoc Minh, the US is one of the largest and most fastidious import markets in the world. However, with continuous efforts to improve technology and product quality, Lien A continued to build prestige and conquer the market with 98% of the export of rubber mattresses to the US market. In particular, Lien A is the only company to achieve Eco Institute certification 2018-2020 because the company has researched and developed the technology of producing rubber mattresses separately.

As for Dong Phu mattress company, Mr. Dam Duy Thao, General Director, said that in addition to traditional markets such as China and Cambodia, the strategy of the company is to bring 100% processed natural products of Vietnam to conquer Russia, European and American countries.

In addition, according to Mr. Thao, the company will continue to improve technology and production lines to improve product quality, while expanding production scale, increasing the capacity of the factory to double the current rate to meet the demand of domestic and foreign markets.

“At present, the production plants of the company have invested in the production line and modern technology of the Federal Republic of Germany, and Malaysia in closed loop production processes from the stage of planting, exploitation and processing”, said Mr. Thao.

Professional investment

According to research from Ken Research Company of India, the growth rate of the mattress market in Vietnam increased by 7.6% between 2011 - 2016. It is predicted that by 2021, the value of Vietnam's mattress sector will be about $US 291 million.

Therefore, the mattress market is not only the race of large enterprises as well as some famous foreign companies but it is also an opportunity for start-up enterprises. Recently, Ru9 Co, Ltd., has officially entered the market with the form of online selling with special preferential policies. Accordingly, Ru9 allows its customers to test the mattress within 100 days, and its customers can return and will be refunded 100% if they are not satisfied.

In contrast to the traditional business models, Ru9’s strategy is to sell directly from the factory to the customer, eliminating most of the costs incurred, such as commission, distribution systems and operation showroom.

Ms. Dang Thuy Trang, Managing Director of Ru9, said that the company can do this because the company’s mattress products are small and convenient, reducing maximum transportation costs.

With the potential of the mattress sector as many economic experts have said, in the coming time, more mattress enterprises will enter this fierce competition to develop. However, for domestic enterprises to compete with the current large foreign enterprises, mattress businesses needs professional investment in the whole system, from raw materials, equipment and technology, and quality management of output.

Besides, according to Mr. Lam Ngoc Minh, the credibility in business with information transparency are important factors to help a firm grow strong. The reason is that when companies publicize quality standards, if the management agencies come to inspect and determine the products of enterprises do not achieve the quality level as announced, in addition to being punished for violations of product quality standards, the manufacturer may also be fined for false advertising, be boycotted and lose the home market.