The latest financial report showcases promising financial signs for Vua Nem, Vietnam’s leading mattress retailer. Specifically, for the first seven months of 2024, Vua Nem’s net profit showed a remarkable reduction in losses by 16 billion VND compared to the initial plan. Starting in June 2024, the company witnessed a positive turnaround with net profits in the green, a trend that continued into July. These are positive indicators that the company is well on its way to achieving a net profit for the entire year.
This impressive reduction in losses and improved financial health is a result of a comprehensive restructuring and operational optimization strategy implemented over the past year. Additionally, a flexible pricing strategy and product diversification, timely adapted to the market during the economic downturn, have also contributed significantly to this success.
AGILE PRICING STRATEGY IN A VOLATILE ECONOMIC ENVIRONMENT
As one of Vua Nem’s sustainable development goals, the company proactively expanded its product portfolio to include items under 5 million VND to cater to a diverse range of consumer needs, from affordable to premium options. This move not only demonstrates the company’s agility in responding to market fluctuations but also underscores its commitment to offering the best quality products at various price points.
Vua Nem’s “worthy sleep” campaign has proven effective, with an impressive 22% growth in the first eight months of 2024 (compared to the same period in 2023) in the sub-5-million-VND product segment. This also illustrates that even in the budget segment, strategic product positioning and prudent price management can lead to success.
The latest financial report reveals that, as of July 2024, 91.5% of Vua Nem’s 130 stores achieved positive EBITDA, a significant improvement from the 71.4% recorded in the previous year. Notably, the percentage and number of stores with negative cumulative EBITDA have been decreasing since the beginning of the year, and it is expected that by the end of 2024, 100% of the stores will have positive EBITDA.
SUPERIOR QUALITY BEYOND “LOW PRICES”: A KEY FACTOR IN INCREASING CUSTOMER BASE
Vua Nem asserts that its low-price strategy does not compromise quality. “Our approach is to focus on developing products with superior materials, eliminating middlemen, and offering factory-to-store products at the most reasonable prices for consumers,” said a company representative. This commitment to quality is evident in their range of affordable yet high-quality products, such as the Magic and Elite Original spring mattresses, the Osaka, Akita, and Hachi foam mattresses, and especially the Gummi Lite latex mattress line.
The Goodnight Hachi foam mattress, designed for couples, offers a mid-range price point without compromising on quality. Its two-layer foam construction, multi-point massage surface, and antibacterial bamboo fiber cover provide durability and cater to the changing needs of couples, from newlyweds to expecting parents and those with young children.
For those who prefer spring mattresses but are conscious of their budget, the Goodnight Magic mattress is an excellent choice. Rated as one of the most accessible options in the spring mattress category, Goodnight Magic maintains quality with its independent spring system that reduces motion transfer and noise while providing superior spinal pressure relief.
In the past year, Vua Nem has also diversified its sleep care product portfolio, introducing the Iyashi herbal compress belt and MI night light, among others, to appeal to a younger demographic, specifically those aged 22 and above. “We want all our customers to find top-quality products at the best prices, whether they shop in-store or online,” the Vua Nem representative added.
This strategic approach has enabled Vua Nem to turn its finances around, increase sales, and attract a younger customer base, with a 30% increase in young customers compared to the previous year. With its current trajectory, Vua Nem is well on its way to achieving profitability and sustained growth.
