Ikea steps up online presence, to roll out shopping app
Swedish retailer Ikea will launch a shopping app in India on Thursday in a bid to expand operations quickly in a market it considers as key.
Delivery services will commence from cities such as Mumbai, Pune, Hyderabad, Vadodara, Ahmedabad and Surat, Ikea's country commercial manager Kavitha Rao told Business Standard. Cities such as Delhi and Bengaluru will be added later. The move to launch a shopping app in India comes as digital adoption, triggered by the pandemic, pushes big-box retailers, such as Ikea, to expand their online presence fast.
While Ikea has a website in Maharashtra, Telangana, and Gujarat, where consumers can shop and have products home-delivered, a shopping app is expected to boost e-commerce sales significantly. “The share of online sales to total sales for us has seen a twofold growth, since the pandemic began last year in the country. The rationale for an app is linked to consumer behaviour in India. People here in general prefer an app over a website for their shopping needs. This is why we felt an app would be an even better way to engage with consumers,” said Rao.
The app will be available on both Android and IOS platforms and will offer 7,000 products at competitive price points. It will also offer home decor ideas and concepts at a time when people are looking to improve their living spaces, as many remain confined to their homes, owing to the lockdown restrictions.
A survey by the Retailers Association of India (RAI) on Wednesday showed that categories such as durables, home appliances and electronic products remained the least affected by the second wave, reporting a sales decline of 31 per cent in April 2021 over the same period in 2019. April 2020 is not comparable since a national lockdown was in place at that time.
Segments such as footwear, beauty and apparels saw a sales decline of 66 per cent, 59 per cent and 47 per cent each in April 2021 versus the same period in 2019.
Consumer durables, RAI said, was the only category which had reported growth of 10 per cent in sales in March 2021 versus the same period in 2019. This came even as overall retail sales across out-of-home categories such as food services, beauty, wellness, apparel, and sports goods in March and April showed a decline of 12 per cent and 49 per cent, respectively, said RAI. Rao said lockdown restrictions have been a challenge for most retailers including Ikea, though lower caseloads in key cities would aid the unlock programme, going forward. Cities such as Mumbai and Delhi are expected to unlock in June in a bid to get business on track.
Ikea will be counting on the unlock programme, since work on two city-centric stores in Mumbai is expected to be completed this calendar year. Ikea is also looking to unveil the two stores in 2021, though Rao did not specify timelines for the opening.
The Swedish retailer has two large-format stores in India, one in Hyderabad and the other in Navi Mumbai, which was opened to customers in December last year.
In February, Ingka Centres, part of the Ingka group, which also owns most Ikea stores worldwide, had said that it was setting up its first shopping centre in India at an investment of ~5,500 crore. The proposed mall, to be launched in Noida, Uttar Pradesh, would add to Ingka Centres’ growing list of properties across the world and also house an Ikea store. The group said it was bringing its ‘meeting places’ concept, providing a sustainable mixed-use destination that would bring ‘many people’ together for multiple reasons.