Ikea's first store in Hyderabad will open by the end of next year, a store in Mumbai six months after that and it is scouting for properties in other cities. In total it plans to open 25 stores by 2025. The company says the focus is on understanding life in Indian homes so that brand communication and the product line-up don't miss their target audience. "Prior to the store opening, we will launch experiential centres to give people the opportunity to touch and feel our range," says the company spokesperson.
Ikea wants to change the way Indians manage their storage problems in their homes. But given that the size of homes varies widely across cities, Antoni says no two stores in the country can be alike, in terms of the merchandise stocked.
Ikea stores will house around 70 rooms with different kinds of furniture and furnishings relevant to local markets. "In Mumbai where homes are smaller, we need to showcase how to do things better in a compact way," says Antoni.
Ikea has already visited 500 homes in the country to help the brand connect with customers more closely and understand the differences within the country and with respect to global tastes. Antoni explains how the company plans to use some of the insights generated from its research.
For instance, Indians store tonnes of pulses inside their kitchen, he says. Ikea will have something for them. Plus in India, washing machines are kept in the bathroom, in Russia in the hallway and in Portugal, in the kitchen. "In India, balconies are used to keep washing machines and hang clothes. Hence we will show buyers the best way to optimise the space and do that," he adds. And in cities such as Delhi, Ikea stores will have small carpets to be placed at the foot of the bed so that the first step out of bed is not on a cold floor. "The idea is to make everyday life easier," Antoni says.
Furnish it right
The company is bringing its range of home furnishings into the country. "We want to offer relevant, affordable home furnishing solutions. We are now doing home visits in different cities to create a relevant offer," the company said. The initial studies have been conducted around the priority markets of Delhi NCR, Mumbai, Hyderabad and Bengaluru, mainly with Hyderabad in focus. A consumer culture and values study is on in Hyderabad where it will open its first store.
The company has decided to present its line of furnishing products in special rooms to showcase their best use and offer suggestions on decor. Devangshu Dutta, chief executive at Third Eyesight says that while most consumers are aware of the space limitations of their homes, they often can't figure out how to furnish and decorate the space. "Room concepts help to place the products sold in context. This helps to firmly position IKEA as a 'solution' provider and also drive sales of products that carry higher margins," he says.
By doing this, Ikea is perhaps also looking to help familiarise people with its do-it-yourself aesthetic. Most Indian homes are used to ready-made furniture and may be hesitant to pick up furniture that needs to be assembled together at home. Baqar Naqvi of Wazir Advisors says that in India, "People need to be told and educated on how to use the products. They need a visual display because consumers find it hard, otherwise," he says.
A similar strategy has been adopted by many online retailers in the category, where they present virtual theme rooms. Ikea believes that it is not standing in the same corner as these brands as it has an omnichannel approach to the market, its stores are points of connect with consumers and the website is meant to build on the relationship between the brand and its users.
Globally Ikea is known for its affordable products, which will be an important differentiator for the brand in India too. However for that, local sourcing is a necessity, not just because the government stipulates so, but also because it helps stay competitive. Ikea says it has been sourcing from India for 30 years. "Today we source products for approximately ¤315 million every year, the aim is doubling it in the next few years," the company said. "The more we source here, the quicker we can become profitable," Antoni says, adding that whatever they produce will be for local stores and exports.