Proven as one of the most reliable brands of mattresses in the country, Kurlon Limited, a Manipal Group Company, carved its niche as early as 1962. Started by Late Tonse Ramesh Upendra Pai, as ‘Karnataka Consumer Products Limited’ the company was renamed Kurlon Limited in 1995 and has currently reached a turn over of Rs 780 crore, headed by Sudhakar Pai, Chairman of the group.
As part of an industrial delegation for AIMO (All India Manufacturers Organisation), Late Tonse Ramesh Upendra Pai, travelled to Germany, in the 1960s, where he saw the benefits of small- and-medium-sized industries and also collaborated the technique of manufacturing rubberised coir from industry professionals. It was after the Second World War, during the 1940s, that horse hair was used extensively as cushioning for car seats, following this, the price of horse hair shot up. This was then replaced by pig’s hair which had also escalated in price. “It was after this that coconut fibre was used which was mainly sourced from Sri Lanka, Kerala and Indonesia. The technique of curling the coir was named Kurlon. Today, every car, especially the Mercedes Benz uses Kurlon fibre for seating,” explains Sudhakar Pai, “We started making rubberised coir for carpet underlay, for four wheelers like cars, jeeps, lorries and also the railways. So our tagline was ‘Stand on, Sit on, Sleep on, Kurlon’.”
The Kurlon mattresses was initially supplied through distributors and dealers across the country. Ramesh Pai soon realised after a market survey, that out of 100 Kurlon mattresses, 78 were duplicates. Following this, a couple of distributors were arrested for duplicating the brand, but this did not nip the problem in the bud. Later when Sudhakar Pai took over as Chairman of Kurlon Limited, he personally visited the dealers in Delhi, who immediately told him that the distributors operated with two different go downs: one for the original mattress and the other for the duplicates. So, sudhakar put an end to distributors. He says,”So now our company believes in direct dealer penetration in the market. We now have 6000 dealers. Also to attack the duplicates, I thought that the best method would be to open our own store. So at that particular moment we had called our stores ‘Kurlon Home Comforts’. 9 years ago, we had opened 8 stores, in Delhi, in one single day. All of them had an area of 600 square feet.”
Venturing into Retail
Today, Kurlon has 120 franchised outlets across the country and one exclusive company owned 2500 sq.ft store that was opened in Jayanagar, Bangalore, 9 years ago. Currently, following a per square feet cost and per square feet realisation, the newer stores are planned around 400-500 sq.ft, which is a much tighter format that can exhibit around 2-3 mattresses.
The company ran with the franchise model since 2011, as Sudhakar found it be more attractive to investors. The business crossed a mile stone by designing and building 100 operational stores till March 2013. Franchisees are provided with designs to lay out their stores as well as training and selling of products. Depending on location and rentals, a franchisee would have to invest between Rs 5- 15 Lakh. The break even period also depends on the location. Explains Sudhakar,”For instance in Mumbai, a franchisee had broken even in the first 5 days. In Bangalore, I had given a challenge to a franchisee that in the first one month he has to sell 100 mattresses. He just took 3 days to do it.”
Kurlon has 44 sales offices located all over the country. The Company products are also exported to West Asia viz; U.A.E., Qatar, Oman, Bahrain, UK, Europe, South and East of Africa, Indian Ocean rim, SAARC, South East and Far East Countries.
Some of the best performing stores are Karol Bagh and Mayur Vihar in Dehli and also Bandra, Dadar, Kharghar, Malad, Mulund, Navi Mumbai, Thane and Vasai, located in Mumbai.
Sudhakar’s goal was to convert a mattress company to a home comfort company and that was how Kurlon Nest collection had evolved. His idea was to cover as much as possible the entire home of a consumer. The only segments that were left out were the kitchen and the toilet.
Today Kurlon has broadly 3 categories of mattresses which are divided into spring, rubberised coir and foam mattresses, priced around Rs 1500-158000. The most expensive one is Rs 178000. Sudhakar has further plans of bringing another mattress at Rs 4 lakh. “People spend 1/3rd of their lives on a mattress. If you spend Rs 20-30 lakh or even a crore on a car, then there are people who are willing to spend. The most expensive mattress in the world is $64000.”
So far, Mumbai has recorded the most percentage of sales in the expensive range of mattresses. Apart from cities, Sudhakar is aiming at tiny pockets like Sholapur and Nagpur. The most popular mattress under Kurlon is the Spine care mattress that has the very first memory foam, invented in Germany for space shuttles used during zero gravity. The Spine Care mattress is currently the fastest moving category and is often picked up by the younger generation of below 30 years, who are more in tune with healthier living and often look for more info and knowledge for the right kind of mattress.
Kurlon has also come up with an exclusive product range of Mattress Xpress which includes mattresses and pillows. In order to increase the range, products like comforters, bed-sheets, mattress and pillow- protectors have also been added. In the year 2012-13, the company expanded Kurlon Mattress Xpress to tier II and III cities.
The largest part of the revenue comes from mattresses, followed by foam, then pillows and furniture. Categories like curtains had to be discontinued as the company found it difficult to keep up with the change in design trends.
50 percent of the chemicals are imported and the rest are sourced within India. The coir is sourced from Karnataka, Tamil Nadu and Andhra Pradesh.
According to Sudhakar, the coir from Kerala is too expensive as, retting, which is the process of obtaining the fibre from the coconut, is done in a different way. Kurlon uses brown fibre. Unlike in Kerala where coconuts are plucked off after a year, other areas wait for the coconut to fall after which it is stored in ware houses for a period of one year. This makes the coconut completely dry and very sweet. The husk becomes very brown and tough. The husk is then put through a machine for some days to get the desired brown fibre.
“This fibre is kept in a curled form, exactly how a women curls her hair. The result is what we call Kurl-on,” concludes Sudhakar.
“In the franchise model, we have noticed that the people who want to come into franchising are not yet matured. We are trying to segmentise our franchisees and dealers,” says Sudhakar, “ We also noticed that if we are locating the store in a high street, we find very high footfalls there. If it is out of place, then footfalls are definitely much lower. Today we have come up with a couple of other models like the SIS. The entire model is to see to it that the customers get what they want. One of the biggest challenges in a high-street is parking space. So a dealer will not able to provide a valet parking and this is the kind of training that is required as per market needs. Challenges vary from city to city. So it is very difficult to analyse certain stores and tell you the average growth rate. Other stores can’t really give customers what they want and that’s why they shut down.”
Other challenges that Kurlon faces is the fact that the company has to keep coming out with 300 different sizes every year. The main reason is that cot sizes vary from location to location. A carpenter does not use a cm or inch scale while building a cot. Explains Sudhakar,”We actually go to individual carpenters and take our measurements and the sizes are then emailed to the factories. This is the reason why we end up making different new sizes every year.”
Kurlon offers effective campaigns like the recent diamond promotions which gives consumers assured gifts like the diamond necklaces and cash prizes. Apart from advertorials, Kurlon also has plans of setting up a mock up interior at its SIS and new Kurlon Mattress Xpress stores, that will give customers an over view of how Kurlon products fit into their interiors.
Kurlon’s 9th factory has currently started production in Gujarat. The new factory is the company’s biggest investment with 36 acres of land, allotted by the state government a couple of years ago.
“All our 9 factories are not mattress factories, some of them are companion product factories. Some of them only make foam. The new one in Gujarat will be Kurlon’s biggest investment. Earlier to this we had put up a factory in Uttranchal and earlier to that at Gwalior and even earlier to that we had put a factory in Orrisa which was 20 years ago. Rest of the factories are in Karnataka. In the next one year, I want make sure the Gujarat factory runs well and crosses the turn over of a Rs 1000 crores. Last year it was almost Rs 780 crores,”says Sudhakar.