As synonymous with high-end mattresses, and Simmons once led the market. So much so that the American economic community uses it as a prototype and regards the "mattress index" as an important indicator to observe whether the economy is booming.
But in recent years, Simmons’ life has not been easy. After experiencing seven bankruptcies and reorganizations in the past two decades, Simmons has recently been rumored to be in bankruptcy again. It is reported that it will submit a bankruptcy application as soon as January 2023.
Just as the old nobles stand at the door of the new era and are unable to move forward, Chinese national brands have continued to accelerate their expansion in one round of changes to this day.
【"High-end" is finally redefined】
Not only Simmons, many established mattress manufacturing and sales companies in the United States are experiencing a cold wave. Since the beginning of this year, the U.S. mattress e-commerce company Resident Home has laid off major layoffs, the third largest mattress group Corsicana has declared bankruptcy, the online mattress company Purple's operating losses have reached six times last year, and the e-commerce part of the DTC business has been cut in half...
In comparison, Chinese brands present a completely different picture. According to survey data from company Chacha , Zhiyan Consulting and other institutions, since 2019, the number of registered mattress companies in China has declined rapidly, and new entrants have been cut in half year after year. But correspondingly, the growth rate of leading brands has increased instead of decreasing. Leading companies such as Xilinmen are in good operating conditions, and the Matthew effect in the industry has further accelerated.
Thompson, chairman and CEO of American mattress giant Silian, said that due to macro factors, the overall industry sales dropped by more than 20% on average, but Chinese brands led by Xilinmen are rising against the trend. According to Xilinmen's 2022 quarterly report, Xilinmen's operating revenue in the first three quarters of 2022 reached 5.741 billion, which is still a stable growth of 13.85% compared to 2021.
On the other hand, Simmons’ domestic sales have become increasingly bleak. According to data from its Tmall flagship store , the number one product sells just over 100 pieces per month, and the number two only sells 48 pieces. Eleven of Simmons' 19 branches in Shanghai have been cancelled.
The reason is that the changes in domestic consumers’ consumption concepts towards high-end brands are one of the root causes of differentiation in the leading market structure. In other words, consumers’ criteria for purchasing mattresses, especially high-end mattresses, have changed.
After quickly opening up the Chinese market with the report " declared " in 1933, Simmons' "foreign mattress" is almost synonymous with high-end mattresses. Even when an elephant steps on it, it still remains elastic, and when a bowling ball hits it from a height, the surrounding pins remain motionless... Continuous advertising and marketing have closely connected Simmons with the "sense of high-end" and "sense of quality", so that in the following decades, consumers often do not talk about the product, but only recognize the brand.
In fact, it was not just Simmons. Almost all foreign brands at that time followed this routine, relying on advertising and marketing to establish a high-end mentality, and then continued to reap the brand dividends . But in recent decades, consumers have become more and more clear about what they need and want, and their purchasing criteria have also changed from simply "foreign monks can chant sutras" to now paying more attention to the core attributes of products.
According to public data, in 2021, the market share of Nike, the number one player in China's sports brand market, has accelerated. Anta has overtaken Adidas and jumped to second place; domestic new energy vehicles have launched a massive counterattack, and the traditional BBA's luxury fuel camp has also gradually collapsed with technological iterations.
Similarly, the “high-end” of mattresses is also being redefined by consumers. The once blind worship of brands is being broken down into more subdivided levels such as technology, research and development, design, and materials. Improved experience, improved aesthetics, improved taste... The changes in demand and consumption concepts have handed over the problem to companies, and companies that can plan ahead of demand will eventually change the market structure.
From a more macro perspective, this is the reason why Simmons stood out in the first place, and it is also the reason why China's mattress industry is now accelerating its expansion.
[Innovation deeply, the road to high-quality development of national brands]
In 1870, the founder of Simmons led 9 employees to create the world's first spring bed, which has since changed human sleeping habits; in 1983, Serta launched the continuous spring system "Miaoke" in the flagship product "Perfect Sleeper" for the first time, successfully gaining fame in the market. Soon, the "Sealy" brand, which was born outside Houston, Texas, also joined the wave of spring innovation. In 1988, Sealy successfully reached the top of the mattress market with its independently developed PostureTech induction spring.
Later, as soon as these foreign brands entered China, they relied on their technological and manufacturing advantages to achieve dimensionality reduction in the domestic high-end mattress market.
From this perspective, it is not difficult to explain the decline of American brands headed by Simmons and the expansion of national brands headed by Xilinmen. Most of the Chinese brands that have achieved counterattack have achieved independence in technology and products, especially the best among them, and have achieved catch-up and leadership in multiple product dimensions.
Taking the earliest Xilinmen as an example, in 1984, Xilinmen, which had just started, anchored the road of scientific research and innovation. Twelve years later, Xilinmen developed the first ultrasonic pocket spring mattress in China, achieving a breakthrough in this technology in the domestic mattress industry.
In 2018, Xilinmen, which was already leading the industry, formally determined its digital strategy and carried out the industry's first 5G+ industrial Internet practice; in 2020, Xilinmen's production workshop has basically become unmanned and intelligent, which also means that the domestic furniture industry's intelligent manufacturing has officially entered the 5G era.
In the same year, Xilinmen released air spring technology, completely breaking the era of "technological monopoly" of foreign mattress brands. Smart 1 equipped with this technology has also become the most patented mattress product in China.
The rapid growth of technology has led to a rapid increase in market share. China's mattress industry, like the automobile industry, is rapidly advancing on the road led by technology.
To sum up, the changes in consumption concepts provide external conditions, and the continuous development of core technologies creates internal motivation. Under the dual internal and external cycles, national brands represented by Xilinmen are rewriting the market structure.
Deeply cultivating innovation and following the trend have allowed such national brands to take the initiative in high-quality development over a longer period of time. At the same time, they have also left a unique mark of the times for Chinese companies in the several waves of high-end mattress products.
Disclaimer
This article involves content about listed companies and is the author’s personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); the information or opinions in the article do not constitute any investment or other business advice, and Market Value Watch does not assume any responsibility for any actions resulting from the adoption of this article.
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