Will Ikea adapt to India?
A 38,000-square-meter facility in Hyderabad sealed the landing of the giant of Swedish origin; by 2025 the company plans to have 25 stores with different new and small formats. Ikea, the largest furniture retailer in the world, is betting that millions of Indians of middle and upper class are similar to the Lambas.
Six years after its first planning, the 38,000 square meter store in Hyderabad is the first step to fulfill Ikea's ambitions in the country where in the next two years it plans to open stores in cities such as Mumbai, Bangalore and the Delhi area. By 2025, the company expects to have 25 stores in India, some with a new and small format.
It is likely that the opening of Ikea in India will become a case study for other international retailers.
The retail landscape of that market is complex. With a growing middle class, its 1.3 billion people buy around $ 30 billion a year in furniture, lighting and household items, such as bedding and kitchen utensils, according to Technopak, an Indian consulting firm.But despite the efforts of some local chains, 95% of those products are sold through small stores that offer customized products, usually specialized in a category, such as furniture or wood lamps, and free assembly and delivery.
They are extensive areas with showroom and warehouse, which are far from the city centers, have labyrinths of giant containers and shelves from floor to ceiling. The signals of the Ikea brand are affordable, mass-produced and functional, and its aesthetic design is light and thin, in contrast to the heavier and bulky furniture traditionally preferred in Indian homes.
However, Ikea, with its reputation for good value, also attracts the bargain-seeking nature of the Indian buyer. Given the low income levels of India, the store presents hundreds of products, from dolls to jars of spices, with a price of less than Rs.100 or US $ 1.45
.In some cases, Ikea sells a product in India for less than it charges elsewhere. In others, the company adapts it to local tastes. For example, most Indians do not use knives to eat and mainly want spoons, so the company abandoned the plastic cutlery packages and instead sells four spoons for 15 rupees, or US $ 0.22.
