Although the Scandinavian giant IKEA has been trying to come to India since 2000, it hasn’t been able to set itself up yet. And this was mainly because of the tight FDI rules in India until recently. But with the Indian government having finally shifted from a 51 percent foreign ownership cap to 100 percent foreign ownership of Indian single brand retail ventures, IKEA can finally start making its plans to revisit the thriving Indian subcontinent.
No formal announcements have been made as of now, but IKEA is expected to be one of the first large global brands to take advantage of 100% FDI in single brand retail! Let’s take a look at a few reasons why IKEA may be successful in India.
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IKEA offers all types of readymade household items in one store
From its trademark foldable, pre fabricated, light furniture, to household items to stationery, to an IKEA food store to the linen section to home accessories to kitchenware to decorative items, IKEA has it all. Worldwide, IKEA is known by its motto ‘Everything under one roof’.
Just like Reliance Fresh, Big Bazaar, Spencer’s and the likes are gradually taking over the kirana stores of India, IKEA too has the ability to easily take over smaller independent shops of furniture that have been reigning over the Indian furniture marketplace from the past many years. The typical Indian trait of getting furniture custom made by hiring a carpenter on contract too could heavily take a beating.
IKEA offers quick and maximum customization
Indians are used to consuming customized items – whether is their Banarasi meetha pan, a kurti stitched by the gali ka darji or a piece of furniture made by the local Rajasthani carpenter. With IKEA, customization will take a whole new meaning for Indians. Choose a lampshade with a handpicked lamp base, choose a Futon with a shade of your choice, chose an arm chair with a different back cover and so on. Whether you are colour coordinating your own home or simply want to get DIY (do-it-yourself) furniture, IKEA serves every need.
Arm yourself with an IKEA notepad, item list and pencil from the store entrance and start ticking off codes of the items you’d like to take away from their warehouse facility in the basement. This experience is likely to strike a chord with the needs of customization loving Indians instantly!
IKEA’s pre fabricated furniture and goods represent modern Indian lifestyles
More and more working Indians living in suburban metros want shopping hubs that offer quick service, a reliable brand name, wide options under one roof and quick delivery. Also, with cost of living in metros ever rising and rented pads becoming smaller and more expensive, people are only going to opt for home items that take up less space in the house, store more and are easy to move.
As far as the pricing is concerned, only time will tell how IKEA suits its Indian customers, because the general reputation of IKEA products even overseas is that it is fairly cheap!
IKEA is a familiar brand name amongst urban Indians
Most well travelled Indians from semi urban and urban cities know the brand name of IKEA fairly well. IKEA along with Starbucks and Walmart, has been made familiar to Indians because they keep appearing in the media due to their constantly changing plans of entering the Indian marketplace.
Additionally, IKEA being a classic international business case study of streamlining costs and developing an efficient supply chain, many B-school students are all too familiar with the brand name.
IKEA’s CSR operations in India
Current IKEA CEO Mikael Olsson has his eyes well set on India as the next big opportunity. His 2010 visit exclusively focused on assuring Indian people and the Indian government that IKEA is not one of those companies whose Indian suppliers engage child laborers, unlike many MNCs that were accused of doing so in the 1990s, BBC News reported.
IKEA has been sourcing many materials from India from a long time and to re-affirm its goodwill in the country, IKEA supports UNICEF’s water and sanitation program and funds initiatives in the carpet and cotton regions in the country, reported ET. In the coming years too, IKEA plans to spend in areas of women empowerment, education, health awareness and industry-based programs that aims to benefit about a 100 million women and children.
One thing for sure, If and when IKEA enters India, they have potential to change household furniture Industry in India!
Would love to hear your thoughts on this…