How Duroflex is scaling up to be a Rs 2,000-cr company by March 2025
Duroflex has seen rapid growth in two years – from Rs 500 crore in 2020, the company is today a Rs 1,000+ crore company. With this milestone, the company is now moving towards a Rs 2,000 crore sales plan by March 2025. In order to meet this demand, they have invested heavily in expanding the capacity of their mega foam and mattress manufacturing plant in Indore, which alone has exceeded Rs 500 crore exports this financial year. As a result, they are now the only company to have a fully owned export subsidiary manufacturing of latex and a full range of latex sleep solutions.
Duroflex had set a goal of becoming a Rs 1,000 crore company by FY23, but crossed their target a year ahead of schedule. The company developed an aggressive multi-pronged growth strategy that doubled its turnover in just two years. This includes diversification into new business verticals, new product launches, venturing into e-commerce, and expanding their retail presence.
In conversation with Adgully, Smita Murarka, Chief Marketing Officer, Duroflex, speaks at length about the performance of Duroflex company, how has consumer behaviour has changed during the pandemic, post-pandemic expansion plans, and much more.
How has the sleep solutions industry performed in the past few years, and especially during the pandemic period?
On a large scale, we were the ones who started calling it a sleep solution post-pandemic, because the knowledge around the importance of sleep has improved and a lot of our efforts went into that. Even through the pandemic, we spoke about how sleep builds immunity, and what is the way to analyse your sleep and look at the right products around it. So, Duroflex brand is one of the leading brands nationally. What we do is we make mattresses, but we don’t make them based only on materials, we make them more based on consumer needs. That’s a solution, a foundation for somebody’s good sleep and we have a wide range for that. In terms of the content, in terms of the kind of conversations we are making, it's more about understanding sleep, How it impacts your health, how it impacts your wellbeing, and therefore how you can invest your time, money and efforts to improve that, because ultimately it impacts your life. We are trying to put out a lot of information around that. We are also working on tech-enabled innovations and thinking in our products and services, on how we make sure that we understand the consumer a lot better and offer the right products.
In terms of industry, more than 50% of this industry is unorganised, which is the sad part that till today, consumers are not aware of what is the reason for going in for a better branded product, what is the difference. More than 50% is unbranded and that’s something that's reducing, with brands like us talking about the difference and the innovations we have in our products. Consumer awareness is something that is helping the divide between unbranded and branded reduce, however, it's still over 50%. So, we have a large role to play in converting that into a fully branded industry. In terms of our growth, we have grown over 70% last year and more than doubled our business in very difficult times. Our growth has been much above category and industry average as a brand. We have been one of the fastest-growing brands in the sleep solution industry.
How do you put technology into sleep solutions?
We have our entire innovation design centre, new product development centre, we have a lot of consumer data that comes in, where we analyse what is the kind of pleasure points, what is the kind of weight, what is the kind of needs that the consumers have and then we develop our products. Post developing our products, we get it tested by applying pressures on the products, by going through a lot of tests, so that we ensure that the product has life, and we also have a lot of automated manufacturing processes. All this is through technology, even the way we supply and sell to our consumers is through technology. So, we can reach out to our consumers in a much more advanced way vis-à-vis probably a lot of other players. We have also started researching and working on tech-enabled products, which will have tech within the product. So, that’s something that we will launch soon. Technology, for us, is much beyond just product offering. It is across what we do and, therefore, we can make better products.
The pandemic has brought in a shift in consumer behaviour and preferences. Have you noticed that in this category? Please share some of the trends that you have noticed.
Pre-pandemic, the occasions to purchase were very limited – it was either marriage or buying a new house, it was very much like a must-do kind of an activity. Post pandemic, our research shows that replacement is the biggest reason why somebody changes the mattress, where they actually want to replace the mattress because it's so bad. Beyond these four occasions, they want to replace it because they think their current mattress is not innovative enough, it does not have much thinking gone behind it, and it is something that does not relate to them anymore. Hence, there is awareness about what they are sleeping on, because eight hours is one-third of the time of your life, and also because work from home happened. Even in the post-pandemic period, most will try to do more work from home, which was not the trend earlier. Working from home has made people aware of what they are sitting on, what they are spending time on, and then they realise how bad their product actually is. That has really helped brands like ours, where it has been organic realisation.
Then people start searching where we are giving all information, our social media is very active, our website is also very active, where we are giving meaningful information on why this is important. We also have our experience centres, which are very well designed, very well laid out, and where you can come and spend more than an hour in really understanding what's right for you versus going and buying a mattress in not such a great environment. Thus, we have really invested in experience centres across India. We are going to be more than a hundred stores by the end of this year and that’s something post-pandemic. We were really the first brand to set up centres like these.
How has the journey been from Rs 500 crore in 2020 to Rs 1,000+ crore in 2022, and you are now planning to reach Rs 2,000 crore by 2025? What are the factors driving this growth?
It has been overwhelming and encouraging. We are taking in a bulk of the opportunity of consumers’ awareness about the right place and right time. It comes from having an extensive product range for really catering to different kinds of consumer needs vis-à-vis selling just one type of product. So, we were able to understand consumers and have a wider offering beyond mattresses. Product portfolio is one thing, we have gone beyond sleep and sleep accessories. We have also gone into comfort furniture offering as an extension, which include sofas, recliners, and beds. With this product expansion, we really own the sleep space as well as the comfort space. Along with product expansion, there is also national geographical expansion – we were primarily a regional south brand, but today we are a leading online + offline, real omni brand in the category nationally. The whole geographical online expansion happened post-2020. We are also selling through D2C, which includes out website and our experience centres, which accounts for almost 30% of our business.
All these avenues have been really what we have been able to scale and establish post-2020 and our efforts are only going to increase in that. We have already grown our exports and we are growing our exports much more. Today, we are exporting to the US and Europe, and have started to export to the Middle East. Exports also form a large part of our business. Most of the leading brands, in some way or the other, source from us. Thus, we are the OEM partners for a lot of brands as well in India and internationally. As a group, we have multiple divisions: there is Duroflex, the main brand and we have a B2B division that exports all these supplies to the rest of the country. We have an online brand, which is Sleepyhead, which is our Internet-first young brand. Thus, as a group we have been able to take the whole opportunity and scale it.