Published: Thu, August 09, 2018
Economy | By

Patriotic tunes but no bedlam for Ikea's Indian debut

Patriotic tunes but no bedlam for Ikea's Indian debut

"We've been looking for a sofa, outside they cost 15,000 or 16,000 rupees ($233), but in here I saw one for only 11,000 ($160)".

The store was opened amidst cheerful Ikea management and staff with the ribbon cutting by a customer.

Price is a key factor for the Swedish chain as it plunges into India, a huge new market where the average annual salary is less than $2,000.

Ikea will offer more than 1,000 products under 200 rupees ($2.91) but experts say it faces a hard balancing act between setting prices low enough to attract cost-sensitive consumers but high enough to reel in the status-conscious rich. According to consulting firm, Technopark, 1.3 billion Indians end up buying $30 billion worth of furniture and household items including linen, kitchenware and lighting but 95% of that is sold by small furniture stores.

Differences between Hyderabad and the furniture giant's 355 outlets elsewhere will include a 1,000-seater restaurant, which is its biggest worldwide. Let's see whether it rules the interiors of Indian homes soon. "And we're here to give them another option when it comes to their homes".

Indian workers walk at the warehouse area of the new IKEA store in Hyderabad on 8 August 2018.

Speaking to CNNMoney two hours after the store's 10 a.m. opening, Achillea estimated that almost 3,000 customers had already come in.

IKEA has so far only said it will charge more than UrbanClap if its in-house assemblers do the job. Ikea is known for their trademark ready-to-assemble furniture.

After the first store in Hyderabad, IKEA will launch its online presence, store and touch points in Mumbai in 2019.

Many Indians are used to having their furniture built by local carpenters, so Ikea is tweaking its business model to suit the market.

Like IKEA, Danube Home of United Arab Emirates (UAE) is also opening its first store in Hyderabad.

The company's efforts in India haven't been without hiccups. The plan is to open retail stores in more than 40 cities across the country.

The company is expecting a footfall of 60 lakh visitors in a year at their Hyderabad store.

The company also said it plans to open 25 locations by 2025 and start e-commerce operations from Mumbai next year. "Our suppliers are long term partners who share our vision and values", IKEA mentioned on its website, talking about its relationship with India. The company is bringing its classic IKEA range along with a small percentage of locally relevant products for the Indian market like masala boxes, pressure cookers, tawas, idli makers, colourful sheets and mattresses made with coconut fibre centre. "We saw that it was very strong and these are the strategies, which will be our first step in going forward", he added.

"We have a long-term commitment to India, which is an important market for us", said IKEA Group Chief Executive Officer Jesper Brodin.

Like this: