We work hard to make sure the furniture is still affordable, says Hornell.
After launching large size stores in Mumbai and Hyderabad, IKEA is betting heavily on small size stores to expand its range. War Hornel Dice Vaishnavi Gupta Once the city’s stores open, the furniture chain expects to serve 500 million homes in India by 2025. Edited excerpts:
What prompted IKEA to switch to smaller form stores in India and around the world, and to expand its stores?
The shop shape of the city responds to the constant changes in customer buying behavior and allows us to adapt to smaller spaces in the urban environment. People in big cities live life exhausted by time; They want to buy everything they can afford. The possibility to use different store formats allows access to new locations. Our goal is to always be close to our customers, more accessible, convenient and to create a better Ikea experience anywhere. The release is in line with IKEA India’s goal of reaching 200 million homes in two years and about 500 million homes by 2025.
In this new store structure, we have focused on 6,000 products, of which 2,200 will be carried and the rest will be delivered at home. We have been working on this development in India and globally for the last three years. Worldwide, similar stores have been established in cities such as New York, London, Paris, Moscow and Shanghai.
How is your offline retail expansion plan in India?
In the first phase of our expansion, the priority will be Mumbai, Bangalore and Delhi, where we will expand our overall omnibus presence. In Mumbai, we opened a large format store last year and this year we will be coming to Worli with our first store. We plan to launch a second city store in Mumbai in the spring of 2022. In Bangalore, IKEA’s third largest store is expected to open in the middle of next year, followed by the city store. As our third target market, two projects are underway in Delhi. In addition, we will be expanding our new small format stores in cities like Pune, Chennai, Ahmedabad and Surat in the second phase.
Ikea is lowering the price of its products. Will this be done across the board?
We have announced a 20% discount on almost four dozen products, of which home decor is the most important. We work hard to make sure the furniture is still affordable. Our economy ensures that customer love for our products and local and sustainable resource efforts can provide benefits to our customers at reduced prices. We plan to further reduce prices by making our resources more efficient, introducing better transportation solutions, and sometimes affecting our profit margins slightly.
It follows a cluster based expansion strategy for online stores. When will this service be launched across India?
The cluster-based approach allows the IKEA brand to build, focus more on the customer through the continuous development of the shopping experience online or through the IKEA application, and ensure that it is supported by services such as delivery, delivery and assembly. In the future, powered by 200 million households, we may launch an e-commerce channel across India, but it is not on the cards now; We will continue to focus on a cluster-based approach to building our online presence.
Ikea aims to get 12% of its retail sales from the kids segment. How are you going to do that?
In most mature markets, the child limit is 6 to 8% in our business; This will increase to 12% in India in the next few years. More than 80% of families in India live with children. From a local resource perspective, we are exploring different possibilities for our range of toys and children. We believe in partnerships with local suppliers to bring Ikea knowledge and local competition together. Despite the range of domestically produced toy products, we are looking to expand the range of soft toys in India as India has a strong base in the textile industry.
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