Sweden’s IKEA delivers affordable home furnishing to customers. It was founded in 1943 and is spread over 49 countries. Almost after a decade’s struggle, IKEA entered the Indian market with its first retail store in Hyderabad.
The retail store is built on 13 acres of land spanning over 400,000 sq ft. Its ‘theme park for furniture‘ style ensemble employes 800 personnel to cater to the customer’s needs.
The Indian market mantra
According to the Outlook Business magazine, IKEA surveyed the Indian markets to understand the requirements of the customer. ‘We conducted over 1,000 home visits to understand the culture and the demands of consumers, and ensure affordability,’ says Ulf Smedberg, country marketing manager, Ikea India, who has spent the past four years in the country.
Suitably, IKEA came up with solutions to stock both local and international goods. Indian specific products like kitchen cutlery, bed sheets would be sold at affordable prices. ‘We haven’t changed our entire product line as we believe that more than 90% of our range is our identity,’ says Peter Betzel, CEO IKEA India.
IKEA will sell 20% goods from local manufacturers which will be sourced from 60 suppliers. Slowly over the years, IKEA plans to source 50% goods locally to boost domestic manufacturers.
IKEA has also opened a restaurant which serves ‘Swe-desi’ (Swedish food with Indian touch) cuisine to its customers. IKEA intends to collect 10% of its revenue from food business owing to the country’s love for food.
Vision 2025
IKEA plans to attract 7 million customers to the store annually and to set up 25 stores in 9 major cities. IKEA has invested ₹ 105 billion in India.
‘Coming years, we will exponentially increase our efforts into the digital interface with the customers,’ Jesper Brodin, the CEO said. About 5% of IKEA’s 38 billion euros global revenue in 2017 came through online sales.