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IKEA changes India strategy with multi-channel approach

By IANS | Updated: August 9, 2019 21:25 IST

Changing its strategy for India, Swedish home furnishing multinational IKEA is now looking at a multi-channel approach with focus on ensuring accessibility.

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On completion of one year of its first India store here on Friday, the home furnishing retailer said that it would open stores across formats and start e-commerce journey.

IKEA India CEO Peter Betzel told reporters that the store in Hyderabad had a footfall of four million people in the first year, with an estimated million being buyers.

On completion of six months, the store officials had revealed that the store had lower than anticipated footfall but that it sold more. They were originally looking at seven million footfall a year.

Betzel, however, said that they had not fixed any target and were excited about the one-year journey in Indian market.

On the eve of the launch of its first store, IKEA officials had said that they planned to open over 40 stores across different formats as against the 25 stores planned earlier.

The furniture giant had earlier announced plans to invest Rs 10,500 crore to open 25 stores by 2025.

Stating that there was no change in their plans for the number of stores, Betzel said the strategy had changed in tune with the changing needs.

"We are trying to be more accessible to many people. Big stores were the criteria five years ago when we talked of 25 stores. Now we are talking about more meeting places in different formats in cities," he said.

In addition to big stores coming up in Mumbai, Bengaluru and Delhi, IKEA is also looking at opening small format stores.

IKEA's next store will be opening in Mumbai. "It will open soon," he said, but declined to give a timeframe.

He said before opening the store in Mumbai, the company would go online. It also plans to soon launch its e-commerce channel in Hyderabad, followed by Pune.

Betzel said smaller stores and online presence will bring IKEA closer to the people. "Our goal is to meet 100 million customers with our affordable home furnishing solutions in the coming years," he said.

Betzel also evaded queries about the timeframe for IKEA to reach the break-even point in India. "We have long-term commitments in India. We will invest, will be accessible and grow. We are not predicting when we will be profitable. Affordability and accessibility are our priorities," he said.

IKEA currently has 403 stores in 49 countries with a sales volume of 38.3 billion euros. As many as 936 million customers visited IKEA stores in the financial year 2017 and more than 2.3 billion people visited IKEA online.

( With inputs from IANS )

Tags: IkeaindiamumbaiHyderabad
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