It is the journey of only a few decades that made IKEA a multinational corporation. The Swedish furniture retailer offers a wide range of products at affordable prices. Started by Ingvar Kamprad, IKEA originally sold things like wallets, pens, jewelry, and watches. Furniture was included in the range in 1947. It positions itself as a service provider that gives a unique experience to its customers. As soon as the customer enters an IKEA store, he/she is made to explore the store by following the arrows that leads you through a path that highlights the components of the store. In this way, the customers are encouraged to interact with the products.
With strong economic development, Indian middle class has made some strong aspirational choices, the market is expected to grow and employ 8% of the population. The transcultural exchanges have increased multifold which led to Indians emulating the western lifestyle. Indians are now ready to impulsively used their credit cards on foreign brands. The younger generation doesn’t mind spending on material good as compared to their older counterparts. IKEA wishes to explore this opportunity and lure the Indian market with its international branding and creative products. At present, the organized retail sector of India has a huge potential for the entry of foreign countries looking to expand. The priority lies in planning the right location at the right price in the major cities of India.
Though IKEA is on its way to open the stores physically in India but it has been IKEA sources products of worth €315 million every year in India. In 2013, the IKEA group received FDI approval to set up stores in India and with an estimated investment of Rs, 10, 500 crore IKEA intents to open its stores in cities like Hyderabad and Mumbai. Although, the strategy is to sell the products online and offline, while maintain a global experience for its stores in India and abroad.
While the expansion plans are in place, IKEA is constantly researching to find out about the Indian way of dealing with the home furnishing products, as it differs greatly from the European way. Indians have pushed washing machines to the balcony, while the Swedes place them in their bathrooms. Shoe racks are generally placed at the entrances in India, while the Portuguese people happily position the racks in their bedrooms. IKEA is carefully studying these differences and trying to customize the products according to the India needs.
Researchers have studied the Indian homes in multiple cities of India to understand the product usage pattern and issues specific to India. The Swedish company is set to open its first store in India by the spring of 2018 in the IT hub of Hyderabad with the biggest IKEA restaurant.
According to a report published by the The Hindu on August 29, 2017, Patrik Antoni, Deputy Country Manager, IKEA India, said:
“Apart from Hyderabad, we have acquired land in Mumbai and Bengaluru, and are scouting for land in Delhi-NCR, Pune, Ahmedabad, Surat and Kolkata. While the Hyderabad store will be ready by Spring next year, work on the Mumbai project will commence in November”
But it remains to be observed, whether Indians will be open to the idea of lingereing around the store to experience the usability of the products, and will make efforts to put together the items with instructions, when they are habitual of getting it made and delivered to the home.