The secret behind mattress maker Vua Nem's remarkable turnaround

The company's latest financial statement highlights positive financial indicators for Vua Nem. Specifically, in the first seven months of 2024, Vua Nem's cumulative after-tax losses were reduced by VND16 billion ($648,496) ahead of schedule. Since June 2024, the company has shown encouraging signs with positive after-tax profits.

These impressive results have been achieved after one year of comprehensive restructuring and operational optimisation. In addition, the flexible pricing strategy and product diversification, adapted to the market during the economic downturn, have significantly contributed to this success.

Low pricing strategy amidst economic fluctuations

As a part of Vua Nem’s sustainable development goals, the company has expanded its product portfolio to meet the needs of consumers across all segments, from economy to premium. This move demonstrates Vua Nem’s flexible adaptation to market fluctuations and its commitment to provide the best quality products across every cost bracket.

Vua Nem’s “Valuable Sleep” campaign has proven effective, with 22 per cent growth in the product segment under VND5 million ($203) within the first eight months of 2024 compared to the same period in 2023. This is evidence that even in the low-cost segment, a business can achieve certain success if it knows how to position its products and manage pricing effectively.

The latest financial statement reveals that, as of the end of July 2024, 91.5 per cent of Vua Nem’s 130 stores had achieved year-to-date positive earnings before interest, taxes, depreciation, and amortisation (EBITDA), a 20.1 per cent increase compared to the same period last year. Notably, the number of stores with cumulative negative EBITDA has been gradually decreasing since the beginning of the year, and it is projected that by the end of 2024, all stores will achieve positive cumulative EBITDA.

Quality beyond low prices

A Vua Nem representative emphasised that its low-price strategy does not compromise product quality. "Our philosophy is not to chase after the market but to focus on developing products with high-quality materials, eliminating intermediaries, and delivering products directly from the factory to stores at the most reasonable prices for consumers."

As a result, a diverse range of affordable yet high-quality products, meeting the diverse needs of consumers, has been introduced. Some examples include the Magic and Elite Original Spring Mattress; Osaka, Akita, Hachi Foam Mattress, and the Gummi Lite Latex Mattress.

The Goodnight Hachi Foam Mattress targets couples at a mid-range price. With a sturdy two-layer foam structure, a multi-point massage surface and bamboo fibre antibacterial cover, this product offers long-term usability, meeting the needs of couples through various stages: newly-weds, pregnancy, and young children.

In addition, those who love spring mattresses but are concerned about their budget can opt for Goodnight Magic. Regarded as one of the most accessible spring mattresses, Goodnight Magic ensures quality with its independent pocket spring system, which minimises motion disturbance and noise, and provides excellent spinal pressure relief.

Over the past year, Vua Nem has also focused on diversifying its sleep care product portfolio by introducing items such as the Iyashi Herbal Compress Belt and MI Nightlights to expand its customer base, particularly targeting younger consumers aged 22 and up. Vua Nem’s representative shared, "We want all customers to find top-quality products at the best prices, whether in-store or through e-commerce channels."

This strategy has helped Vua Nem reverse its losses, increase sales, and grow a younger customer base by 30 per cent compared to the same period last year. With the current progress, Vua Nem is accelerating its profit growth rate and is on track to achieve positive results this year.

Vua Nem JSC, Vietnam's biggest mattress retailer, is officially debt-free and achieved its profit target in the first four months of 2024.

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