“Sleep is the best meditation,” said the Dalai Lama, highlighting the importance of sleep in modern life. The mattress industry has responded, that in 2024, the revenue in India’s mattress market is projected to reach approximately $254.60 million, with an expected annual growth rate of 4.86% from 2024 to 2029, according to Statista. It is believed that the market has seen a surge in demand for orthopaedic mattresses, driven by increasing awareness of the significance of quality sleep and spinal health. This is further proven by the roll-out of a wide range of products, from memory foam and hybrid mattresses to AI-powered mattresses, as companies seek to differentiate themselves in a crowded field.
Wakefit, a sleep solution company’s revenue from operations rose 28.4% to Rs 812.62 crore in FY23 from Rs 632.59 crore in FY22, as per regulatory filings accessed by Tofler. Its net loss widened 36.7% to Rs 145.68 crore in FY23 from Rs 106.52 in FY22.
In conversation with BrandWagon Online, Kunal Dubey, CMO, Wakefit, talks about the company’s road to profitability, product category expansion, and use of AI in mattresses, among others. (Edited Excerpts)
Can you share Wakefit’s overall growth trajectory over the past year and your expectations for the upcoming year? What strategies are you implementing to drive further growth and strengthen your market position?
When we talk about growth, it’s important to recognise that we’ve seen substantial growth from FY23 and achieved EBITDA positivity, becoming a profitable company. We reported a revenue of Rs 1,017 crore for FY24, reflecting a 24% increase from FY 2022-23. We have returned to EBITDA profitability with an EBITDA of Rs 65 crore and have crossed the Rs 1,000 crore revenue milestone. Looking ahead, we aim for double-digit growth for FY25.
Our founders have always emphasised, that achieving consistent growth today isn’t just about hitting product-market fit (PMF) with one product and coasting on that for three to four years. It’s about making pivots every 12 to 24 months. This can involve launching new categories, expanding into new geographies, or adopting new channels. Wakefit has been consistently making those pivots.
For example, we started with mattresses, expanded into sleep solutions, and then moved into furniture and décor, all within the broader home segment. Each of these categories behaves very differently. Some companies specialise in just mattresses, others in furniture, but Wakefit has managed to transition smoothly across all these categories, keeping everything under the ‘home’ umbrella. This seamless transition is one of the key reasons behind our consistent growth.
The Indian mattress and furniture markets are on an upward trajectory, contributing significantly to our revenue. We’ve also increased our offline retail presence, which has been a new channel of diversification, particularly in furniture. Last June, we had about 10 to 15 stores, and now we’ve crossed 80 stores across 26 cities in just one year. We’re on track to grow to over 120 stores in the next eight months. This offline expansion has been a huge success story for us over the past year.
Additionally, our own D2C platform has been performing well. So, the key to our consistent performance has been a strategic, methodical approach to diversification—new products, new channels, new categories, and new markets. For us at Wakefit, consistent performance matters more than short-term spikes.
Looking ahead, we plan to broaden our range by adding more subcategories and product variants to meet diverse customer preferences. This approach will continue to enhance our overall portfolio.
Can you tell me more about the sleep internship? What is it exactly?
The Sleep Internship is an initiative we launched four years ago, now in its fourth season. Initially focused on the mattress category, we have evolved into a sleep solutions company and expanded into the broader home segment, offering furniture, décor, and more. However, a significant portion of our business still centres on sleep solutions.
Our primary goal is to address the growing issue of sleep deprivation, which affects an increasing number of people due to work pressures, anxiety, and competition. We aimed to initiate a conversation about the importance of sleep and its impact on daily life.
We created the Sleep Internship to raise awareness about sleep issues. The concept of hiring interns to ‘sleep’ and paying them for it caught public attention. Initially, I thought it might be a gimmick, but after participating in the second season, I realised it sparked meaningful discussions about sleep health.
This year, we received over five lakh applications for the fourth season, highlighting the initiative’s growing momentum and public interest. The Sleep Internship is not just a one-time event but part of an ongoing conversation about sleep health, and we are excited to see it grow stronger each year.
How do marketing initiatives like offering a sleep internship contribute to driving sales and revenue for the company?
Every marketing activation ultimately links back to sales, but if that were the sole goal, we could rely on traditional methods like performance marketing or competitive pricing. With a budget of $100 for the year, one could easily allocate all of it to pricing to drive sales for a specific month or day. However, in today’s digital landscape, staying relevant in your category has become more crucial than merely selling. Selling is now an outcome, not the primary objective.
Having been part of the Internet startup ecosystem in this country for over 12 years, I’ve witnessed its evolution—from the early days of Twitter and Facebook to the present. Today, remaining relevant and true to the problem you’re addressing significantly impacts a brand’s role. When you communicate your message honestly and consistently, you can achieve organic growth over time.
Take the Sleep Internship, for example. We don’t measure a direct sales spike after each activation; instead, we focus on addressing the category and the underlying problem without hard selling. This approach has led to organic growth for Wakefit. Our brand narrative relies heavily on content marketing, which is why I’ve been a fan of Wakefit for years. Few brands in the country have built their entire narrative through content and sparked meaningful conversations in such a fun and engaging manner.
Overall, it’s not about the immediate sales impact of a single activation. It’s about being true to your core values, understanding your mission, and consistently communicating that message.
How does Wakefit determine its mattress pricing strategy in a competitive market, and how does it ensure its pricing aligns with product quality and customer expectations compared to competitors?
In the evolution of e-commerce in our country, value plays a more significant role in a product’s success than pricing alone. Having been part of Flipkart’s early journey, I’ve seen how value propositions have shaped consumer behaviour over time.
It’s rare for any category to succeed solely based on pricing; value truly makes the difference. For example, Flipkart’s introduction of cash on delivery was a game-changer and Myntra’s instant returns policy significantly enhanced user experience. These value constructs go beyond mere pricing.
Wakefit also embraced this approach with its 100-day trial for mattresses, which was revolutionary and added substantial value beyond competitive pricing. Consider how mattress shopping typically involves visiting a store, trying a few options briefly, and making a decision. This is surprising given that a mattress is a product you’ll use for a third of your life over the next seven to eight years. Casual decisions often lead to regrets. That’s why we introduced innovations like the 100-day trial, which transformed our business and drove exponential growth.
Our pricing strategies are designed to support a strong, value-driven marketing approach that emphasises quality and creativity. While pricing is important, it doesn’t always cut through in a competitive market. We’ve learned that effective positioning relies more on value propositions than on pricing alone. As the market has become hyper-competitive, aligning pricing with key marketing strategies and making strategic investments in areas of greatest impact has become essential.
Given that mattresses are a long-term investment typically purchased every seven to ten years, what strategies does Wakefit employ to acquire new customers while ensuring retention of existing ones, and how does this approach contribute to capturing a larger market share?
First, it’s important to note that we’ve been the undisputed leaders in the online mattress segment for quite some time. Our goal now is to regain leadership in the overall market, both online and offline. The mattress category hasn’t seen much disruption or narrative around sleep quality until recently.
For years, people, including myself—I’m 41 now—thought that sleep issues were due to lifestyle or weather. It wasn’t until about 18 months ago that I realised my mattress was the real reason behind my poor sleep quality. Wakefit has been working to educate people on the importance of sleep and how a good mattress impacts that. Once customers understand this, acquiring them becomes much more seamless.
The market is still huge, and we’re only at the tip of the iceberg. Our strategy also involves ongoing innovation—we’re launching new products soon—and expanding aggressively into offline retail. This has led to exponential growth in customer acquisition. The key to all of this growth is talking about the category itself, educating consumers, and innovating, rather than just trying to sell a mattress.
In the last year alone, our offline retail presence has driven significant growth in new customer acquisition, which shows how adding a new channel has been highly effective. We believe this is just the beginning, and customer acquisition will remain a strong opportunity for the next five to six years.
When it comes to the online vs offline debate, where does the majority of your sales come from? Is it online or offline?
Our sales are still predominantly from online channels. Offline is a relatively new distribution channel for us. While we currently have over 80 stores and plan to cross 120 in the next eight months, online remains the mainstay of our business. This includes both our D2C website and the marketplaces where we sell our products. So, yes, we are still an online-first business and have been undisputed leaders in that space for quite some time.
Can you tell me more about your marketing strategies beyond internships and educational initiatives? How do social media, influencer marketing, or performance marketing fit in? How do these tactics help you?
Our top-of-the-funnel business has been built on very effective, low-budget strategies, which Chaitanya, one of our founders, has termed ‘zero-budget marketing.’ Before I joined, Chaitanya had been leading the demand and marketing efforts for years. It’s fortunate for me to step into a system where the founders were directly involved in shaping demand and marketing.
Our current marketing strategy aligns closely with our business goals of promoting a healthy sleep culture and building customer trust. These aren’t just buzzwords for us. When I joined, I saw firsthand how we are truly in the business of promoting better sleep, not just selling mattresses. Customer trust is central to everything we do. We are in a hyper-competitive home and sleep solution space, so it’s essential to focus on customer satisfaction, not just resolving complaints.
We’ve built a strong digital-first presence, backed by innovative content marketing and customer engagement strategies. Content marketing and education have been a crucial pillar for Wakefit over the years. Campaigns like our ongoing ‘sleep internship’ or previous efforts like the ‘Great Indian Sleep Scorecard’ are examples of how we use insight-driven campaigns. These initiatives are backed by a mix of SEO, performance marketing, and digital marketing.
Additionally, customer-centric strategies, like offering a 15-year warranty, were unheard of in our category and helped build trust. This focus on educating and engaging customers drives not just awareness but meaningful growth. In the coming years, we’ll continue to double down on our digital marketing efforts while expanding our offline presence as well.
How many offline stores do you currently have, and how many e-commerce websites are you present?
Right now, we have nearly 80 stores across 26 cities, and we plan to expand to 120+ stores in the next eight to nine months. As for online, we’re present on almost all major e-commerce websites, besides our own D2C platform. D2C is a core focus for us, but we’re also available on all leading marketplace websites and apps for selling.
Which cities contribute the most to your sales and revenue? Is it mainly metro cities, tier-one, or tier-two cities?
Historically, for any major category, and especially in the online space, metro cities or the top 10-12 cities contribute the majority of business, following the Pareto principle. However, the new wave of growth is coming from tier-one and tier-two cities. Our offline presence is expanding in that direction as well. But in terms of overall revenue, the bulk still comes from those top 10-12 cities.
What are your expansion plans, both in India and globally?
For now, our focus remains largely on India. We’re experimenting and testing the waters for international markets by researching to identify potential opportunities. While we have a small team exploring these markets, any major expansion plans abroad will only materialise if we see a significant opportunity. However, the primary commitment and focus will remain on the Indian market for the foreseeable future. Expansion within the country, either through product range or market reach, will be our key growth driver for the time being.
Are you using AI technology in your mattresses?
Yes, we recently launched Zense, India’s first AI-powered sleep solution, which is entirely developed in-house. This product addresses the growing sleep issues in India. We introduced two innovations: Regul8 and Track8. Regul8 is a temperature-controlling mattress cover that lets two people set their desired sleep temperatures on each side of the bed. Meanwhile, Track8 monitors and adapts to your sleep patterns, analysing your deep sleep, sleep cycles, and movements to adjust the mattress temperature, ultimately enhancing your sleep quality. This is a true innovation, and while similar international products exist, ours is far more affordable. We’ve soft-launched these products and will expand on them in the coming months.