Simmons Ranked No.1 in Sales Last Year
Ace Bed, King for 30 Years, Drops to 2nd
Successful Targeting of MZ Generation... Operating Profit Margin Improvement Remains a Challenge
The domestic bed market has been reshaped. Ace Bed, which had held the number one position for decades, has ceded the master bedroom to Simmons Bed. This marks the first reversal in sales scale.
The throne was taken... Younger sibling Simmons ranks first in sales
Simmons announced on the 2nd that its sales last year reached 313.8 billion KRW, a 10% increase compared to the previous year. This is the highest sales since the establishment of its Korean corporation in 1992. On the other hand, Ace Bed's sales last year were 306.4 billion KRW, down 11.5% from the previous year, marking two consecutive years of decline. Based on sales scale, Simmons has risen to the top position in the domestic industry, while Ace Bed has dropped to second place for the first time in over 30 years.
Ace Bed and Simmons are sibling companies with the same roots. The late Chairman An Yusu, founder of Ace Bed, established Simmons in Korea after transferring the trademark and technology from Simmons in the United States. In 2001, the eldest son, CEO An Seongho, inherited Ace Bed, and in 2002, the younger son, CEO An Jeongho, took over management of Simmons.
Ace Bed maintained the number one position in the industry for over 30 years. Simmons always remained in second place. However, the situation began to change starting in 2019. Ace Bed focused on maintaining its top spot by emphasizing premium quality and technology. In contrast, Simmons converted all its stores into directly managed outlets in 2019 to nimbly grasp consumer trends on the ground. Moving away from the B2B (business-to-business) model of selling products through dealerships in the bed industry involved significant risk.
Rather than promoting the beds themselves, Simmons focused on building its brand. Since 2019, it has made bold moves with "bedless bed advertisements." In April 2020, it opened the "Simmons Hardware Store," a so-called "socializing popup store," and the following year renamed it the "Simmons Grocery Store." Instead of showcasing beds, it sold unique goods and hosted various media exhibitions, creating scenes where people lined up as soon as the store opened. This popup store has attracted over 200,000 cumulative visitors over three years.
It also concentrated on targeting the MZ generation (Millennials + Generation Z), the future core consumer group. Simmons introduced Korea's first vegan mattress collection, N32, which gained popularity among the MZ generation, with N32 sales increasing more than threefold compared to the previous year. The MZ generation's recognition can also be seen in Instagram followers. Simmons has 73,000 followers, while Ace Bed has only 45,000. These changes translated into sales, providing Simmons with the foundation to surpass Ace Bed.
Fierce competition ahead
The domestic bed market is expected to see even fiercer competition going forward. Although Simmons has risen to the top position in the industry based on sales, it still trails Ace Bed in operating profit. Last year, Simmons recorded an operating profit of 31.9 billion KRW, a 170% increase from the previous year. Meanwhile, Ace Bed posted 57 billion KRW in operating profit despite a 12.7% decrease during the same period, maintaining a lead over Simmons.
Simmons' increase in operating profit is considered a temporary phenomenon resulting from a special situation last year under an emergency management system, which included a significant reduction in TV advertising expenses. Efforts to improve operating profit margins are still necessary. Meanwhile, Ace Bed has started using the message "Bed is Science" again after 30 years, featuring actor Park Bogum. This aggressive marketing reflects their determination to reclaim the number one spot.
Competition with latecomers is also intense. Furniture companies such as Hanssem, Hyundai Livart, and Shinsegae Casa have entered the bed market. Additionally, rental appliance companies like Coway and SK Magic have joined, causing a seismic shift in the market. Coway's mattress division sales last year approached 250 billion KRW, closely trailing the second place.
An industry insider said, "With the market competition overheating, it is difficult for any single company to maintain a dominant number one position. As more consumers invest in quality sleep, competition in premium beds will become even more intense."
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