Ikea Will Open Small Outlets Across India: Use Website/Apps To Sell Products Directly To Customers

Food, clothing, and shelter are three essential necessities for humans. Speaking of shelter, there are people who look for beautiful house and then there are those who create one!

This story covers IKEA, the one that makes the house beautiful! The largest furniture retailer in the world is in the news today as it plans to open small city outlets along with its mega format stores in India supported by online channel. 

As per a senior company official, this comes as a strategy tweak amid changing consumer behaviour.

For the unaware, IKEA and India date back to 2013! Yes, it was then, that the furniture retailer put aside Rs 10,500 crore in order to open stores in India. Over the period of 10 years, IKEA planned to set up 10 furnishing and home-ware stores as well as allied infrastructure. 

The number has now increased by 15.

As we speak today, there are three mega format stores in Hyderabad, Navi Mumbai and Bengaluru and two city centres in Mumbai.

Speaking of the impact of pandemic on the company’s expansion plans, IKEA India CEO Susanne Pulverer said that the response is albeit slowed down due to the COVID period, but the company is learning from the first markets that they have opened.

She said, as the way forward, that “We need to be close to where people are. So that’s when we also looked at smaller formats that are still relatively big for Indian retail.”

Omnichannel : IKEA’s way Forward

Speaking of the tweak in strategy, she said that “Yes, it is. Not only in India, it’s also a global phenomenon that we see. It’s not enough with the big store outside (city). People don’t have time, maybe not having a car, they are not always willing to take all the things home, they want it delivered. Then we can be closer to people and have different ways of meeting them.”

So, it will be omni channel, she said adding, “It’s the big IKEA full experience and it’s smaller formats, maybe even smaller, where you can come and plan and get service for designing your home.”

Though the investment phase of its approved FDI and further investments have not been lined up, as per the India CEO, the furniture retailer is committed to the Indian market in the long term.

She said that “We believe we will have many more stores and we will have omni channel because we see that is the future. The combination, and how many, what year I’m not ready to share yet. We are working with these plans”.

30% of Total Sales Comes From Online

Speaking about the online expansion, she said that the company wants both. She said “We want to go physical and online together, that’s the best. We have done some pilots in the three cities in Gujarat with online only. We are evaluating but we know it is a full experience to get the inspiration and then you need to come to an IKEA store. So, it’s never as good just to put it online.”

She revealed that currently the online sales contribute to 30% of total sales and the same has increased during the pandemic and has stayed high only.

India CEO is optimistic about the increasing trajectory of the online channel, however physical experience will be important as well. She said that “We believe it will continue to be increasingly important, but we believe that physical experience will also stay. So the combination I think is perfect actually. People choose when to shop from home and when to come out and have the experience. So, it will be the mix for the future that will be needed”.

Ikea is also offering products online through the website or App to its customers in cities such such as Bengaluru, Hyderabad, Mumbai, Pune, Ahmedabad, Surat, and Vadodara.