Q] Wakefit is known for its very witty advertising. Be it the proposition of ‘sleep interns’ or the welcome message for Ikea when they just came to Bangalore about two years ago. As a less than 10 years old brand, do you think that the only way to stand out in the market is through clever advertising?
I don’t know if it’s the only way, but for us, it has always worked. We ensure that the marketing department follows the brand DNA. Number one is to entertain because nobody wants to be bored with a preachy brand. Number two is to always leave some knowledge in the campaigns, anything about sleep quality, how it improves performance, how it improves your day, etc. As a young brand, the lack of a legacy is a blessing because you end up pushing the envelope on things that other big brands might think twice before doing. We like to take things head-on and have fun with marketing.
Q] Wakefit has adopted the zero-based budgeting approach for marketing. Would you give us a sense of how you decide this year-on-year? Moreover, what percentage of your overall revenue have you devoted to advertising in the past few years?
If you look at the last eight years, every single year, the budget percentage has varied. Marketing as a percentage of net revenue has always been in the low single digits. Zero-based budgeting has been our DNA. Both Ankit and I have been failed entrepreneurs in the past, we don’t like to throw money at a problem. We don’t like to solve problems with a money-first approach. Instead, we like to solve problems through principles. Only then do we get aggressive with spending money. The reason why zero-based budgeting came into play is that right from the beginning, we used to get all kinds of marketing agencies pitching – ‘Tell us your budget, and we will design a campaign for it.’ This is surprising because the idea is more important than the budget. But if an idea is good, we’ll spend crores on it, otherwise, we will not even spend a rupee on it.
Q] What was the logic behind adding actor Ayushman Khurana into the equation and putting strength and money behind a brand ambassador?
Ayushman is our second brand ambassador. In 2022, when we first wanted to try out a brand ambassador, we opted for Rashmika Mandanna, and this was before she found national success with Animal. At that time, she was only popular in the four Southern states. We are very strong in those states, and she was making her Bollywood debut. The partnership was a very good one, and she generated a lot of awareness and interest in the brand. We ran that for a year. Brand tracks clearly showed that we were fairly well known, with good awareness and consideration in South India. But then we needed a lot more coverage in the North, so, that’s why we did our research and again chose somebody who’s like us.
Ayushman is known as ‘Mr. Original.’ He did not grow up with godfathers or industry-backing, but came from Roadies, a boy from a middle-class family. In recent times he’s reinvented himself, and we believe that we are the same. We started with mattresses, then came sleep, furniture, and now home. The relationship with Ayushman is an ongoing one.
Q] About three years ago you decided to expand into the furniture and home decor space. Was that a natural extension for a mattress brand? How did you decide to tackle competition from established names like Pepperfry, Urban Ladder, etc?
We were quite happy doing mattresses. But consumers started asking for bedsheets, pillows, etc. So, we got those products. Then in 2019, people started saying, ‘We bought the mattress from you, and now would you recommend where can we buy a bed from? And where can we buy a side table next to the bed from?’ So, we were very naïve and thought that we could replicate mattress success in furniture. We jumped in and set up a small furniture unit, but soon realised that furniture is a very different beast. People require a lot more choices, and delivery is not just delivery, you have to deliver and install it. But over the last four years, we’ve learned our way through that. It wasn’t at all a natural extension for us.
Q] Wakefit recently launched its Happy Home Index (HHI) report for 2024, as a reflection of the evolving Indian home. Tell us, how you’re going to use some of the findings to address the consumer’s needs.
Our HHI report shows that older people are much happier with their homes. In terms of gender, our findings suggest that men are more comfortable making changes in their homes as opposed to women. Chennai and Mumbai have the lowest happiness score, while Hyderabad has the highest. These learnings are fascinating, and we decide how we can potentially fulfil those needs. Our job is to educate you on everything. You don’t have to buy from us, we are here for you as a partner.
Q] What kind of market share do you enjoy in the furniture space today?
We honestly don’t have an idea because the overall furniture market is supposed to be anywhere between 36 billion to 50 billion dollars. You peel the layers and realise that the whole thing is completely unorganized. Branded companies barely account for 3 to 5 billion dollars.
Q] From an online-only brand, you transitioned into having 50+ stores in about 20 cities. With COVID behind us and yours being a high investment category, do you think offline can never lose its prominence?
You are right. It’s not that you cannot survive only with online, because the online channel is still growing in double digits. But when you are offline, you see that the behaviour is vastly different. You will see a family of four or six walk in and spend 45 to 60 minutes in the store, touch the products, talk to the salespersons and make decisions. They come to the store with photos of their living room or photos of the old furniture that they have so that they can match it. And then once they do all of this, they’re very willing to spend a large sum of money. Online, they end up buying one product at a time, testing the brand. So that way, I think the role of offline is strong, at least in this category.
Q] When it comes to online, do they prefer cheaper products? Test the waters and see what kind of quality they’re going to get before they put in more?
They’re not looking for cheaper products. They’re looking to buy fewer products. If they need four items, they’ll only buy one. They test the brand, check for delays, see if their calls went unanswered, and check the response time in case of an escalation. So, they take all these signals to say whether this is a trustworthy brand or not, and then return for the next purchase.
Q] Is mattress still your number one product amongst the categories that you offer on your D2C site? If so, then do you think the USP is also the low price point, which is rather rare in this business? How are you doing that?
Mattress is still the number one product on the D2C site. Our queen-size mattress with high-end orthopaedic memory foam would only cost about INR 9000 to 10000. While the same product with an organized retailer would cost anywhere between INR 20000 to 25000. The reason is that the specifications of our products are better. We have a 10-year warranty and a 100-day trial. The affordable price point is possible because we do not have any middlemen. In a traditional retailer, you will have a state-level distributor, and then a region-level stockist, a pin code level dealer manager, and finally there is a retailer. Of course, each of these people takes a cut, but they’re not adding any value to the product. For us, price and frugality are very important, but that’s not what we go after. What we go after is an excellent quality product. The consumer should never think of Wakefit as ‘use and throw.’
Q] There used to be a time when Kurlon by default was the go-to brand for mattresses, thanks to advertising. In the past 5-6 years, you’ve seen the competition and ad wars intensify with new players entering the space. Who do you consider your biggest competitor?
We don’t look at companies as we are already number two or number three in India as far as mattress is concerned. What we worry deeply about is an unorganized to organized conversion. Growth is not going to come from capturing or getting it from some other competitor. They all have their structural complexities and structural issues. We have our own growth needs. So, the biggest concern is that 50 percent of the mattress sector is unorganized where there’s neither a label nor a warranty, the foam is adulterated. For us, the dream is to convert more of the unorganized into organized because that’s where the best ROI for the efforts lie.
