See a great opportunity in "Digital Marketing”
Established in 2005 by P Manjunath, Peps is India's largest inner spring mattress company. Crafted with 100 per cent imported raw materials, Peps offers products, solutions geared for supreme sleep comfort. In an interview with Paulami Chatterjee, K Madhavan, Managing Director of Peps Industries, throws light on the company’s journey over the past 16 years, the way it has beat competition from coir and foam mattress brands of India, and future plans for 2022 and beyond.
Please give us a background about Peps, its founders, footprints in India.
Peps was founded by P Manjunath, a renowned industrialist of that time. He was assisted by G Shankaram way back in 2005. Later after a few years, I stepped in as the managing director. In 2006, we cashed on a golden opportunity and took over a sick manufacturing unit that was for sale. Further to bringing in cutting-edge technology to India, we associated with M/S Restonic USA, the fourth largest spring mattress brand in the world.
Coir and foam mattresses dominated the market when we made an entry in the market. At that time, out of the total mattress market share, spring mattresses had a share of less than 2 per cent. Educating the customer about spring mattresses was a major challenge as people in India had a firm belief that only a firm mattress is good for sleep. Over a period of 12 years, we have established ourselves as India's top selling spring mattress brand with a CAGR growth rate of around 33 per cent. In the year we started our operations, the company turnover was ₹4 crore and today, Peps has a turnover of ₹450 plus crores.
We have four facilities in Pune, West Bengal, Delhi and Coimbatore, a workforce of 650 and a network of 5000 dealers. In the last three years, we have made inroads to go pan India.
How did Peps fight the pandemic? What was the growth opportunity posed by the challenge called COVID?
The pandemic, of course, as stated above, had affected us. But after the onslaught, the market now appears to be promising. We are recouping steadily. One great thing was we went all out to help our esteemed employees. We haven't held or deferred their wages and benefits. On the contrary, we put the increments, bonuses, and promotions back into action as things normalised. A trend that emerged out of the pandemic was the digitisation of services. We were able to bring down costs by using modern digital technology and continuous improvements to our advantage.
One new norm that the pandemic has brought was to "cut costs'' by putting the use of digital technology and continuous improvements to our advantage. We started investing more on digital platforms and e-commerce models, so that our customers can buy the products from the comfort of their homes. We came up with this keeping in mind the risk of moving out and for the ease of our customers.
What is unique about your mattresses? What is the technology and raw materials that Peps mattresses use?
When it comes to our offerings, we emphasise on innovation. We hold patents for many of our offerings that do the job for our customers. For example, it is the only brand that is "sag-free", "cool and lighter" among the spectrum of mattress segments. In addition, we hold a large number of patents and registration for look and feel.
Take, for instance, our flagship product "Spine Guard". It is India's first innerspring mattress with "Memory Foam" which is meant to support your back and protect you from backache. It has a patent for its marvelous middle construction, which takes care of 1/3rd portion of your body where you exert more weight!
Denim fabric is known for its ruggedness and soft cotton that fall with a longitudinal stretch. We first got the material modified to be used in the mattress and our unique "Zenimo" is a patented product. We were the first to construct multiple comfort layers, a style and finish you usually see in the European market known as “Foux Top”. Our popular top-end mattress "Grand Palai'' is an output of extraordinary comfort and luxury. We are the only brand that offers a set of products with international flavours in luxury and comfort directly manufactured under the technical know-how of our licensee Restonic.
How did Peps touch a turnover of 450 crore over the past 16 years?
16 years back when Manjunath started the brand, it was not easy for him to reign with a bit of product knowledge, background and external resources. With time we figured out new ways and options to make our brand stand out. All the products from the House of Peps are built on the principle of excellence and consistency. We don’t negotiate our quality compared to the price. We provide our customers with the best quality products. We always attempt exclusivity in our marketing methodology from all viewpoints and work in the direction of zero customer dissatisfaction. Our experience centre tactic in presenting our product selections for a" touch & feel" is a great success. Another point that I want to highlight is we started with spring mattress and till date we are still focusing on the same. We have not mixed our product hygiene and always try to provide the best spring mattress to our customers. Over a period of 12 years, we have established ourselves as India's top selling spring mattress brand with a CAGR growth rate of around 33 per cent. In the year we started our operations, the company turnover was ₹4 crore and today, Peps has a turnover of ₹450 plus crores.
How has the journey been so far including the various ups and downs the company faced from time to time?
To begin with, it was not a cakewalk to be the first in the industry with a bit of product knowledge, background, and external resources to turn the situation upside down. The initial journey was quite tough, with many ups and downs, despite having years of experience and expertise in the retail market and operational excellence. Though metal spring mattresses were the only sleep-related products known and used for centuries in developing countries, Indian consumers were not so familiar with it. A metal spring mattress is an engineered product. It has no inherent defects like sagging and lumping that is common with rubberised coir or developing excessive heat due to static charges in PU Foam. It was a challenge as a disruptor to position the product and the brand, which was unknown in the market.
The technology was inspired by the international fourth largest selling brand "Restonic" from Restonic Corporation of USA. We have 30 years of license agreement in utilising their technical know-how and marketing their product in the SAARC nations.
We started positioning our brand, and gradually we started rising from the bottom, displaced other brands, created a segment and finally became leader in the domain. Today in the spring category, we have a market share of 52 per cent, and from per annum sales of 4000 mattresses, we have crossed over 3,50,000. We have a retail brand and over 150 experience centres across the country known as "Great Sleep Stores", which operate as Company Owned and Company Operated (COCO) and Franchise models. It is a one-point sales outlet where you can buy all accessories that go into your bedroom. We have a brand called "Dream Decor" that deals with varieties of pillows, bed linens, duvets, fitted sheets, pillow covers etc. We are present across all e-commerce platforms. We have an entire website and an accommodating customer service centre.
How has Covid changed the consumer demand for mattresses and how are you leveraging the same?
We see that consumers are a bit liberal in spending on health-related products. The mattress is considered as an investment simply because of its longevity in service and heavy weight of owning it. But all said and done, sleep is as essential as food for well-being. Covid has demonstrated this across all products.
Which are your key markets in India and abroad? Which markets do you wish to explore?
Though Peps is a pan Indian brand, over 80 per cent of our revenue comes from the states of south India. We have our dominance in almost all forms in South India. The metros like Bangalore, Chennai, Kerala and Hyderabad are in the lead. Since we focus more on internal markets and institutions, we haven't attempted to chase exports to a sizable extent.
What are the sleep solutions/products in your basket?
Peps as a brand has positioned its product for customers who wish to graduate themselves from the conventional mattresses and are looking forward to indulging in international sleep comfort. Our products are positioned and priced keeping in mind the Indian pockets as well as their comforts. Our products are well balanced, neither soft nor hard. It is engineered to be "firm" and highly "price competitive". We have our products ranging from ₹14,000/- to 36,000 and ₹1,50,000/-! Some of our products are Peps Caspia, Peps Allura, Peps Cameo, Peps SpringKoil, Peps Restonic, Peps Spine Guard, Peps Organica, Peps Crystal, Peps Vivah, Peps Double decker, and many others. Bed making and designing are considered as "art and science''. The mattress you sleep in is more personalised, we figured this very much from our experience. A good mattress becomes a great mattress if it is associated with well-designed accessories like ''bed linen, fitted sheets and bedsheet ''. We cater to all these to make a goodnight’s sleep comfortable and luxurious. Peps is the first to develop an extensive “Experience Centre'' for their target audience to choose their product.
How has Peps fought against coir and foam mattresses to be leaders in the spring mattress industry?
As said earlier, Peps is a typical example of a "Disruptive Innovation" in the mattress industry, otherwise it is rubberised coir and PU foam. Today you see a large extent of significant brands having “drifted” towards spring mattresses. What else one can say about the challenge the brand has given to the segments.
Tell us about your marketing strategies. What percentage of your sales is through, brick & mortar, exclusive online store, and e-marketplaces?
Our critical success factor is in our positioning and brand discipline that goes with certain philosophies and processes. We always strive towards uniqueness in our marketing approach from all perspectives and work towards zero customer dissatisfaction. Our experience centre approach showcases our product portfolios in a “touch and feel way" which is a great success. As India's top-selling spring mattress brand, we lead, rather than be shown, to be precise.
What are your future plans for 2022 and beyond?
The future seems to be a road to growth and profit. We see a great opportunity in "Digital Marketing" needless to mention that our basic framework of marketing and sales is from the perspective of the channel and is built by a large number of trustworthy and loyal dealers and distributors. They are the backbone and will be strong supporters of our future growth. We are also into the e-commerce market; it is yet another opportunity and we are now focusing on it. Creating an extensive infrastructure in our operation to strengthen our service factor to the customers is in our anvil; simultaneously, we are focusing on the efficiency factors across the value chain for cost-cutting.
What percentage of sustainability and circularity does your products promise?
All the products from the House of Peps are built on the essence of quality and reliability. We don’t compromise our quality compared to the price. We provide our customers top-notch quality products.
This is one of the contributing factors for the growth. We closed at a rate of 30 per cent, except for the onslaught of the devastating pandemic. We give around 5 to 10 years of warranty and guarantee with conditions applicable to our range of mattress products and adequate to its accessories across the portfolio.
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