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. Since June 2024, the company has been consistently profitable, indicating a high possibility of achieving positive net profit for the entire year.
This impressive turnaround, with a significant 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.
LOW-PRICE 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 adapting 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 segment. This success highlights that even in the low-price segment, strategic product positioning and prudent price management can lead to notable achievements.
The latest financial report reveals that as of July 2024, 91.5% of Vua Nem’s 130 stores achieved positive EBITDA, a substantial increase from 71.4% in the previous year. Notably, the percentage and number of stores with negative cumulative EBITDA have been steadily declining since the beginning of the year, and the company expects all stores to reach positive EBITDA by the end of 2024.
SUPERIOR QUALITY AT “LOW PRICES”: A KEY FACTOR IN ATTRACTING MORE CUSTOMERS
Vua Nem emphasizes that its low-price strategy does not compromise quality. “Our approach is to focus on developing products with superior materials, eliminating middlemen, and offering the most reasonable prices directly from the factory to our customers,” affirmed a company representative. This commitment to quality and affordability has resulted in the introduction of a range of cost-effective yet high-quality products, such as the Magic and Elite Original spring mattresses, the Osaka, Akita, and Hachi foam mattresses, and the standout Gummi Lite latex mattress.
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 long-lasting comfort and support for couples during various life stages, from newlyweds to pregnancy and parenthood.
For those who prefer spring mattresses but are conscious of their budget, the Goodnight Magic is an excellent choice. Rated as one of the most accessible options in the spring mattress line, the Goodnight Magic still delivers on quality with its independent spring bag 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 items such as the Iyashi herbal compress belt and MI night light, 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 our stores or through our e-commerce channels,” the company representative added.
This strategic focus on quality and affordability has enabled Vua Nem to reverse its losses, 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 on track to achieve positive profit growth this year.
