The Swedish company is expanding in India. So, what does the firm have in cards for our country?
What’s New?
IKEA will be opening its Navi Mumbai store on December 18 and this will be the company’s second physical store in India after it set foot in the country over two years ago with its first store in Hyderabad. The company stated that the customers will now be able to test, try and purchase some of IKEA’s iconic products like BILLY Bookcase, MALM Bed, EKTORP Sofa, among others in the new store.
Ikea’s India Journey
Ikea opened its first store in India in August 2018, and it is said 40,000 shoppers turned up on the first day, resulting in two-hour long queues just to get inside the store while traffic built up outside. That’s the kind of overwhelming response Ikea received in India.
The company generated a total revenue of ₹407 crore in seven months in FY19. Ikea’s revenue stands as a record for any brand in the country with just one store and that too in its first year. In its first year of operations in India, the company sold goods worth ₹2 crore every day on an average.
Pandemic & Problems
While IKEA had bigger plans for India, the coronavirus had something the opposite planned for everybody. According to the company’s press release, footfall at its flagship store in Hyderabad halved to around 2 million between September 2019 and August 2020 (FY20) as compared to 4 million in FY19.
However, that’s where the company’s online presence came in handy. With footfalls decreasing in the physical store, its website, which was launched in India in August 2019, saw more than 25 million visitors in FY20.
The CEO and CSO of IKEA India was quoted by Quartz India saying, “It has been a significant year for IKEA India…New services like Click & Collect, remote planning, and home furnishing consultancy was launched in Hyderabad. We have been lowering our prices for many articles to become even more affordable for our consumers”.
Future Plans
In the next year, the firm is hoping its omnichannel strategy will help deliver a strong performance. By implementing the omnichannel strategy, the firm wants to strike a balance between digital and physical presence, and it looks to open 25 stores by 2025 in nine cities across India. The company has a target to reach 100 million people in India by 2022 via an omnichannel approach. Bengaluru, Mumbai, Delhi are some of the cities which are among the prioritised cities for Ingka Group for fast expansion. Ingka is handling the global retail operation for IKEA.
Betzel also said, “We look forward to a strong and positive FY 2021 (September 2020-August 2021) with our new IKEA store and also smaller formats coming up in Mumbai”. Betzel added, “2021 is also the year of sustainability for IKEA, and we will continue to enable and inspire more people to live a more sustainable life at home.”
IKEA is looking to open several smaller shops that will have the same look and feel of a larger store. Usually, IKEA is known for its huge stores, spanning over 300,000 square feet. However, IKEA’s strategy of opening small-stores is not unique to India. The company has been experimenting with small-sized stores in Poland since last year. And this shows one thing — IKEA is changing its business strategy for India, and it is trying its best to compete with players like Urban Ladder, Pepperfry, Godrej.
We understand the rethinking of the company’s strategy, the expansion and the eagerness to grow big. Why? Because India’s furniture industry is estimated to surge to $61 billion by 2023 and who wouldn’t want a piece of that pie?
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