Transformations in the Sleep Industry in India Post-Covid: A Focus on Premium and Entry-Level Markets

The sleep industry in India is undergoing a significant transformation, with a notable shift towards both the premium and entry-level segments post-Covid, while the middle mass segment remains stagnant. According to industry experts, the middle segment, which has traditionally been a key market for many digital companies, has been experiencing sluggish growth for the past 8-9 months.

One of the primary reasons for this slowdown is the increasing financial burden on the middle class. With household savings on the decline and rising interest rates, middle-class consumers are finding it harder to afford mid-range products without taking on debt. This economic environment has led them to prioritize spending on aspirational items like smartphones and vehicles, while cutting back on purchases such as mid-range furniture and sleep products.

On the other hand, the premium segment, which includes high-quality mattresses and furniture priced above ₹20,000, is seeing strong growth. Affluent consumers are willing to invest in products that offer superior comfort and aesthetics, driven by a growing awareness of good health habits. Premium orthopedic mattresses, in particular, are in high demand, with prices ranging from ₹30,000 to over ₹1 lakh.

At the same time, the entry-level segment is also expanding as customers transition from unbranded, local products to branded goods for the first time. First-time buyers are increasingly opting for affordable branded mattresses and furniture, signaling a shift towards better quality products in the organized market.

The mattress industry in India has generated revenues of over $200 million as of 2023 and is expected to grow at a CAGR of nearly 8% by 2028, according to a report by Mordor Intelligence.

One of the bright spots in the industry is the resurgence of retail, with companies like Wakefit seeing success in the brick-and-mortar space. Wakefit, which has around 65 stores across the country, has experienced significant growth in retail sales, with the average ticket size nearly double that of online purchases. This resurgence is driven by consumers seeking an integrated omnichannel experience, where they can order online, pick up in-store, or have items delivered to different locations.

Overall, the sleep industry in India is witnessing a dual growth trajectory, with demand increasing for both premium and entry-level products. As consumer preferences evolve and the retail landscape transforms, companies in the industry are adapting to meet the changing needs of their customers.