Ikea, the world’s largest furniture retailer, is checking a new country off the list: India. They have recently opened a the 400,000-square-foot store in Hyderabad. Things don’t end there. By 2025, the company hopes to have 25 stores in India, some traditional and some in a new & smaller format. Other international companies aren’t sleeping on this but rather watching closely to evaluate how Ikea arrives at either success or failure.
The population dynamic of India is complex. “With a growing middle class, its 1.3 billion people buy about $30 billion a year of furniture, lighting and household items like bed linens and cookware. The consumer in India is kind of pampered,” said Ankur Bisen, who heads Technopak’s retail and consumer products division, an Indian consulting firm. This seems ironic for Ikea to pursue as their stores are contrary to that. Half showroom half warehouse and miles away from city centers. Their brand owned furniture signals: mass produced, simplistic, inexpensive and lightweight due to use of cost efficient material use. Traditional Indian furniture is instead rather heavier and bulkier.
If you’re like me you’re thinking, “why then, Ikea?!” Apparently, those differences aren’t necessarily deal breakers. “In India, a lot is driven by the price of the goods and not so much about the quality,” said Anil Talreja, a partner at Deloitte’s India arm who works with retailers. The company knew if they wanted to succeed in this new landscape they would have to rethink and reshape their product lineup and store operations for the country. A few ways they tailored to local tastes:
- Lower price points: given India’s lower income levels then where other Ikea stores operate, they introduced new products like spice jars at less that 100 rupees ($1.45 USD) and are selling existing products for less than elsewhere.
- Dining: when eating, Indians primarily use spoons rather than knives. The ditched traditional cutlery packs and instead sell four packs of spoons.
- Family Gatherings: in the country’s culture, families and friends spend a lot of time together with people often popping into the household. Ikea added more folding chairs for flex seating.
- Height: On average, Indian woman are shorter than Americans and Europeans. The company intentionally highlights cabinets and countertops at lower heights.
- Bedroom: Children and parents often sleep all together in the same room until the child is in grade school. Ikea showcases master bedrooms with a child’s bed amongst the rest of the room’s furniture.
They arrived at these learnings through sending Ikea employees to visit over 1,000 homes in various Indian cities to understand how people lived and what they needed. Ikea approached this new landscape both in a humble and calculated manner. They knew they had to adapt to the local user experience to succeed.
Learn more here:
https://www.nytimes.com/2018/08/07/business/ikea-first-india-store.html
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