Wakefit: A Case Study

Wakefit is a mattress manufacturing company that offers innovative sleep solutions along with other sleep-related products such as pillows, bed frames, neck pillows, back cushions, and comforters.

On the way to becoming India's number one sleep destination, Wakefit is promoting a healthy sleep culture and transforming the sleeping habits of millions of people.

History of Wakefit

Wakefit was founded by Ankit Garg and Chaitanya Ramalingegowda in 2016. Being a chemical engineer graduate, Ankit started his research on the mattress business while working at Bengaluru-based startup Tapzo. He noticed that the sleep industry is highly fragmented, and established companies focused only on the sales of mattresses, downplaying the importance of quality.

In 2015, Ankit bought a few hundred mattresses and sold them on Amazon as an experiment to understand the unit economics. He made a profit of Rs 60 lakh in this trial period.

But he was not satisfied just selling mattresses online. He wanted to make superior quality mattresses with no adulteration, longevity, and construction that enables good sleep and luring for a nap.

So he officially launched Wakefit as an online retail business in 2016, quitting his job, along with his colleague Chaitanya. With e-commerce gaining popularity and health awareness rising, the market was all set for them.

Business Model of Wakefit

Wakefit has a customer-centric business model. Their sales are driven through their own website or through popular e-commerce platforms like Flipkart and Amazon. They do not plan to provide any offline experience centres, and follow an omnipresent business model. The company thinks that without using a bed overnight, customers cannot really know if they are comfortable. And most people are not comfortable lying on a bed in front of people.

Almost all of the raw material is imported from Europe and the Middle East to ensure world-class quality in terms of consistency and chemicals used. Manufacturing is done in Bengaluru, and quality checks take place in Europe.

Wakefit has got the highest sales from Bangalore with a monthly average order ranging from 55-66. They ship 250-300 units a day across India, adding up to 7,500-9,000 mattresses in a month.

Wakefit claims that its mattresses are made of a protected "open-cell structure" for cool summers and its high-density foam helps give a complimentary support to the backs of customers.

Wakefit mattress review.

Marketing Strategies of Wakefit

Wakefit, unlike other companies, does not believe that marketing is all about releasing glamorous ad campaigns once in a quarter. On the other hand, their principle is to ensure that they got the basics right. They have focused on effective yet affordable strategies that other digital brands have quite ignored-SEO, SMM, performance marketing on Amazon, Google, Facebook, and Instagram among others.
Nearly 40-50% of potential customers come to Wakefit via family or friend referrals. This is possible because of heavily investing in word-of-mouth marketing. Wakefit often requests users to write reviews and share their experiences. This keeps the company in a positive outlook in consumers' minds and drives conversions for people that are looking for mattresses.
Since Wakefit is an established D2C Brand, lack of middlemen enables Wakefit to provide prices that are 50 percent lesser than their competitors - between Rs 5,000 and Rs 26,000.

To overcome competition, Wakefit made customer support teams that catered to the customers 24x7. Moreover, they provide a 20 year warranty period on their mattresses which is unmatched in the industry.
The masterstroke played by Wakefit which made them stand out far ahead of the competitive crowd is the 100-day trial period for their products. That way customers get used to a high-quality product which was rather difficult to say no to after 100 days of affordable luxury.
The extensive research conducted by Wakefit gave them deep insights. They found out that 48% of people in India complained of back problems. Wakefit includes and considers such insights while designing their products.
Many people in metro cities, especially millennials nowadays, prefer renting. So Wakefit has made ties with online furniture and home appliances rental platforms to provide Wakefit’s mattresses along with their beds.

Growth of Wakefit over the Years

Wakefit has witnessed an exponential revenue growth in these five years.

In 2018, the growth increased by 350%, in 2019 it increased by 200%, and in 2020 it further increased by 147%.

This growth can be attributed to Wakefit's consumer-focused business plan and a steady approach toward marketing their products.

Expansion Opportunities for Wakefit amid the Pandemic

Despite the pandemic hitting business hard, Wakefit managed to bounce back. While it had Rs 25 crore of revenue in August 2019, it almost doubled to Rs 50 crore of revenue this August 2020, pre-GST.

In the last three months, Wakefit claimed to earn revenue from 2-tier cities like Mysore, Lucknow, Surat, and Kanpur among others, accounting for 50% of its total sales.

Wakefit is expanding beyond mattresses, to become a furniture brand and retailer during this pandemic. It includes manufacturing study tables, sofa, bookshelves, shoe racks, etc. And it is also prospering in the business, selling hundreds of furniture pieces every day. Today, 15% of the revenue generated by Wakefit comes from selling furniture products. Since India's furniture market is 15% larger than mattresses, the revenue will further increase.

Wakefit has expanded its businesses to multiple hubs, including Bengaluru, Hyderabad, Mumbai, and Delhi NCR. It looks to deliver all its products in less than 24 hours across the country.

Goals for the Future

India’s mattress market is estimated to be worth Rs 10,000 crore. Wakefit plans to monopolize the Indian mattress market and then move globally with its high-quality product and high-service experience. Asking the co-founder Chaitanya, he aims to have a revenue of Rs 1000 crore in the next two years with happy and satisfied customers.

Wakefit will continue setting up more warehouses and logistics support, and hence expanding and achieving happy sleeping across the whole country.

Author: Rishita Jain

Source : https://startuptalky.com/case-story-of-wakefit/

Date : 2020-09-30T17:35:55.000Z