IKEA opens First In­dia store in Hy­der­abad

Open­ing stores in In­dia is a land­mark mo­ment for IKEA after it got FDI ap­proval in 2013 that al­lowed 100 per­cent FDI for sin­gle brand re­tail­ers in In­dia and more so since IKEA has been sourc­ing from In­dia for its global stores for more than 30 years…

Images Retail - - CONTENTS - – By Charu Lamba

Fi­nally, the wait is over! IKEA, the world’s lead­ing Swedish home fur­nish­ing re­tailer has opened the doors of its Hy­der­abad store for cus­tomers on Au­gust 9, 2018. Ex­press­ing joy, Peter Bet­zel, CEO, IKEA In­dia says, “At IKEA the peo­ple, the com­mu­nity and our con­tri­bu­tion to safe­guard­ing the health of the planet is the big­gest pri­or­ity. Over the last five years Ju­ven­cio Maeztu and the team here have laid a very strong foun­da­tion and a solid base for IKEA to be suc­cess­ful. I thank all our friends in In­dia in­clud­ing the gov­ern­ment and of­fi­cials for all the sup­port and part­ner­ship to make this dream a re­al­ity.”

This is a land­mark mo­ment for IKEA after it got FDI ap­proval in 2013 that al­lowed 100 per­cent FDI for sin­gle brand re­tail­ers in In­dia. IKEA has been sourc­ing from In­dia for its global stores for more than 30 years. Its plan to open retail stores in 40+ cities across the coun­try, re­in­forces its long-term com­mit­ment and deep con­nec­tion with In­dia. IKEA has set out to be­come a truly unique, mean­ing­ful and trusted brand in In­dia, mak­ing ev­ery­day brighter and bet­ter for the many peo­ple.

Jes­per Brodin, CEO, IKEA Group, says, “It is a proud mo­ment as it marks a ma­jor mile­stone in a jour­ney that started more than 30 years ago when IKEA part­nered up with lo­cal man­u­fac­tures in In­dia. We have a long-term com­mit­ment to In­dia, which is an im­por­tant

mar­ket for us. We bring an in­spir­ing, af­ford­able and con­ve­nient home fur­nish­ing of­fer and awe are more than ready to meet and un­der­stand the needs, frus­tra­tions and dreams in the ev­ery­day lives of our cus­tomers in In­dia.”

Res­onat­ing Brodin’s thoughts, John Achil­lea, IKEA Hy­der­abad Store Man­ager says, “I am ex­cited to throw open the doors of the first IKEA In­dia store to the many peo­ple of Hy­der­abad and its neigh­bour­ing com­mu­nity. Te­lan­gana has given us a lot of love over the last few years and now we hope to wit­ness the peo­ple of Hy­der­abad truly en­joy­ing our store that has been built with love. I thank the lo­cal of­fi­cials who have made this day pos­si­ble. The big­gest value we bring is to the many peo­ple who have big as­pi­ra­tions for their homes and thin wal­lets. Our prom­ise is one of value, of qual­ity and of mak­ing the ev­ery­day life bet­ter at home for all of the many peo­ple in the state and beyond.”

Store Con­cept

The store is 4,00,000 sq. ft. large and is spread over 13 acres in the heart of Hy­der­abad’s tech hub HITEC City and prom­ises to be a

‘fun day out’ for the fam­ily. It of­fers 7,500 af­ford­able, good qual­ity, value for money home fur­nish­ing prod­ucts, all un­der one roof.

The IKEA store in Hy­der­abad of­fers ideas, in­spi­ra­tion and so­lu­tions. It ex­hibits two full homes that re­flect ‘Life at Home’ in Hy­der­abad, be­sides dif­fer­ent room sets based on dif­fer­ent parts of the home like bed­room, kitchen, chil­dren’s room and liv­ing room. It also has a mar­ket hall where you can find home kitchen uten­sils and ac­ces­sories, tex­tiles, rugs, light­ing, dec­o­ra­tion, sta­tion­ary and even live plants.

Ac­cord­ing to Pa­trik

An­toni, Deputy Coun­try Man­ager, IKEA In­dia, “The strength of IKEA Hy­der­abad is that we have brought all the global IKEA con­cepts here. We have not com­pro­mised on any­thing. We have got the great ex­pe­ri­ence that we are known all across the world – the in­spi­ra­tion, the cus­tomer ser­vice, the range – all this has come with us.”

“What we have done spe­cial is that how we have com­posed the prod­ucts in the room set­tings. What we are try­ing to do is to be rel­e­vant for the lo­cal mar­ket. We have done around 1,000 home vis­its and re­search was based on how peo­ple live and how they want to live and then we are put­ting our prod­ucts in a unique way that rep­re­sents the In­dian needs. If you com­pare the rooms in IKEA Hy­der­abad to IKEA Swe­den, the main dif­fer­ence is how the rooms are com­posed and prod­ucts are com­posed,” adds An­toni.

On the ba­sis of vis­it­ing

1,000 homes in In­dia, Chris­tian Kampe, Sales Man­ager, IKEA In­dia has nar­rowed down liv­ing room and kitchen cat­e­gories con­tribut­ing ma­jor chunk to the sales.

IKEA is plan­ning to change around 25 per­cent of the en­tire range every year.

Low Pric­ing

IKEA’S busi­ness idea is based on am­bi­tion of reach­ing the many peo­ple with thin wal­lets. As it sets a goal to reach 200 mil­lion peo­ple in the next three years, the foun­da­tion for a strong and rel­e­vant of­fer is af­ford­abil­ity and ac­ces­si­bil­ity. IKEA will at­tract the many dif­fer­ent seg­ments in so­ci­ety and not just the few. Ev­ery­one is wel­come to shop at IKEA where 1,000 prod­ucts are priced be­low ₹200.

In terms of the prod­ucts, the com­pany has brought its classic IKEA range along with a small per­cent­age of lo­cally rel­e­vant prod­ucts for the In­dian mar­ket like masala boxes, pres­sure cook­ers, tawas, idli mak­ers, colour­ful sheets and mat­tresses made with co­conut fi­bre­cen­tre. Cus­tomers will also be able to buy global clas­sics like the Billy book­case, Klip­pan­sofa, Lack ta­ble and POANG arm­chair among oth­ers.

THE STRENGTH OF IKEA HY­DER­ABAD IS THAT WE HAVE BROUGHT ALL THE GLOBAL IKEA CON­CEPTS HERE. WE HAVE NOT COM­PRO­MISED ON ANY­THING. – Pa­trik An­toni, Deputy Coun­try Man­ager, IKEA In­dia

Scan­di­na­vian De­signs

IKEA is known for cre­at­ing a low-main­te­nance home with a mix of classic Scan­di­na­vian de­sign and long-last­ing modern fur­ni­ture. The brand, which is plan­ning to repli­cate its suc­cess in In­dia, just like other coun­tries, has in­tro­duced Scan­di­na­vian con­cept to In­di­ans too.

“As you know we have been suc­cess­ful in in­tro­duc­ing Scan­di­na­vian de­sign in many mar­kets like China, North Amer­ica, Rus­sia, etc. where Scan­di­na­vian de­sign was not known at all. Sim­i­larly, we are in­tro­duc­ing it here in In­dia too and are hope­ful that as In­di­ans are always open to new things they will ac­cept it too,” states Mia Lund­strom, Cre­ative Di­rec­tor, Life at Home, IKEA In­dia.

The com­mon thread be­hind all IKEA prod­ucts is their ‘demo­cratic de­sign.’

This is a five-pronged idea: Sus­tain­abil­ity, form, func­tion­al­ity, qual­ity and price.

“IKEA range in Hy­der­abad is 90 per­cent go­ing to be the same as ev­ery­where else in the world. We are play­ing around for about

5 to 10 per­cent of the lo­cal

WE ARE IN­TRO­DUC­ING SCAN­DI­NA­VIAN DE­SIGN HERE IN IN­DIA TOO AND ARE HOPE­FUL THAT AS IN­DI­ANS ARE ALWAYS OPEN TO NEW THINGS THEY WILL AC­CEPT IT TOO.

– Mia Lund­strom, Cre­ative Di­rec­tor, Life at Home, IKEA In­dia

adap­ta­tion or mar­ket spe­cific range prod­uct,” she adds.

Dis­tri­bu­tion Cen­tre

In In­dia, the fur­ni­ture re­tailer has in­vested Rs 20 crore for 2.7 lakh sq. ft. dis­tri­bu­tion cen­tre in Pune, on leased land. This dis­tri­bu­tion cen­tre is in part­ner­ship with In­dospace In­dus­trial Park and go­ing for­ward, the brand plans to ex­pand this dis­tri­bu­tion cen­tre to 3.7 lakh sq.ft. by next year with an in­vest­ment of Rs. 100 crore.

Ac­cord­ing to Bi­mal Pa­tel, Dis­tri­bu­tion Op­er­a­tions Man­ager, IKEA In­dia, “Cur­rently, in Pune we have 170 co-work­ers, and as soon as we launch e-com­merce op­er­a­tions, the co-work­ers strength will go up to 400-500.”

The brand is also scouting for land in Ma­ha­rash­tra to build own ware­hous­ing fa­cil­i­ties over the next two to three years and has ear­marked an out­lay of ₹750 crore and cre­ate di­rect jobs of ap­prox. 500-600 peo­ple along with in­di­rect job cre­ation.

An in­vest­ment will be done keep­ing both au­to­ma­tion and sus­tain­abil­ity in mind where IKEA aims to im­ple­ment some of the most ad­vanced tech­nol­ogy. IKEA will op­er­ate a non-bonded ware­house for do­mes­tic goods, and a cus­tom ware­house which will stock im­ported goods, Pa­tel said.

Ur­ban­clap: As­sem­bly Part­ner

IKEA has tied up with Ur­ban­clap, a mo­bile-based ser­vices mar­ket­place. As part of this col­lab­o­ra­tion, con­sumers pur­chas­ing a se­lect range of IKEA fur­ni­ture from the store can book fur­ni­ture as­sem­bly ser­vices via the Ur­ban­clap app or the web­site.

Pa­tel says, “We want to en­able the un­or­gan­ised sec­tor to de­velop skills, to en­able our cus­tomers to build the fur­ni­ture and that is why we de­cided to go ahead with com­pa­nies like Ur­ban­clap where com­peti­tors can get trained by us and ac­tu­ally be cer­ti­fied to build IKEA fur­ni­ture. In­ter­est­ingly, that cre­ates an­other econ­omy for the lo­cal en­trepreneurs to do that and that is a busi­ness model that can be ex­panded across the coun­try.”

IKEA has con­trib­uted to the train­ing of the car­pen­ters on Ur­ban­clap’s plat­form, thereby, skilling them to be­come pro­fes­sional IKEA as­sem­blers. An­toni as­serts, “DIY or Do it your­self is still a new con­cept in In­dia and we will in­vest heav­ily to pro­vide af­ford­able and qual­ity ser­vices.”

The Ikea-trained car­pen­ters are listed on the Ur­ban­clap plat­form and cus­tomers can or­der their ser­vices. To fur­ther strengthen the ser­vices’ of­fer, IKEA also has an in-house team of 150 as­sem­blers, of which to­day 75 are women.

“In IKEA we are ex­tremely trans­par­ent with our op­er­a­tions. Cus­tomers have power to take the de­ci­sion if they want to pay for the ad­di­tional ser­vices - de­liv­ery, as­sem­bly and in­stal­la­tion as these ser­vices comes as an ad­di­tional cost in IKEA’S terms. What dif­fer­en­ti­ates us from other re­tail­ers is that we give the cus­tomer the choice,” states Pa­tel.

Pur­chas­ing Strat­egy

IKEA has been sourc­ing from In­dia for more than 30 years. There are more than 50 sup­pli­ers in In­dia and IKEA has long term partnerships with many from past decades.

15 new sup­pli­ers have as­so­ci­ated with the brand in last two years in new cat­e­gories be­sides tex­tiles.

In fu­ture, IKEA is look­ing at ex­plor­ing new cat­e­gories like ce­ram­ics, glass­ware, wood, nat­u­ral fi­bres, bam­boo etc.

Mar­ket­ing Strat­egy

IKEA in­tro­duced its first TVC in July re­volv­ing around the ev­ery­day fam­ily mo­ments. It very clearly showed the prices of the prod­ucts as and when they ap­peared.

Ac­cord­ing to Ulf Smed­berg, Coun­try Mar­ket­ing Man­ager, IKEA In­dia, “We men­tioned prices in the ad with the pur­pose to show that the prod­ucts are nice, high qual­ity and to en­sure that we of­fer af­ford­able so­lu­tions.”

He fur­ther adds, “When any for­eign brands comes to the coun­try, most of the time they are very ex­pen­sive, that is what we be­lieve that the per­cep­tion will be for IKEA. That is why, we de­cided to high­light the af­ford­abil­ity fac­tor from Day 1. Be it dig­i­tal ad, TVC or any other medium to ad­ver­tise, we have high­lighted it ev­ery­where.”

IKEA will be rolling-out new ad cam­paigns based on dif­fer­ent sea­sons and fes­tiv­i­ties in In­dia. The next cam­paign will be rolled around Di­wali.

The brand which be­lieves that dig­i­tal is go­ing to be the ef­fec­tive way of com­mu­ni­ca­tion in In­dia, plans to en­gage cus­tomers with IKEA fam­ily club.

“IKEA fam­ily club is for our best cus­tomers where we give them some­thing more than points. We give them ben­e­fits, in­vite them to home fur­nish­ing classes and they can also fol­low us and be the first to buy dur­ing dif­fer­ent cam­paigns. We are build­ing this re­la­tion­ship with our fu­ture cus­tomers,” as­serts Smed­berg.

WE MEN­TIONED PRICES IN THE AD WITH THE PUR­POSE TO SHOW THAT THE PROD­UCTS ARE NICE, HIGH QUAL­ITY AND TO EN­SURE THAT WE OF­FER AF­FORD­ABLE SO­LU­TIONS. – Ulf Smed­berg, Coun­try Mar­ket­ing Man­ager, IKEA In­dia

IKEA Restau­rant

The store houses a 1,000-seater restau­rant, IKEA’S largest and pos­si­bly In­dia’s largest restau­rant, a cafe which of­fers cof­fee, bakes, frozen yo­gurt and many more for pur­chase.

The IKEA restau­rant of­fers 50 per­cent Swedish spe­cial­i­ties like sal­mon and chicken and veg­e­tar­ian meat­balls and 50 per­cent lo­cal del­i­ca­cies like biryani, samosas, dal makhni in the case of Hy­der­abad. The food is very af­ford­able, for ex­am­ple a plate of samosas cost ₹10.

Ac­cord­ing to Hen­rik Öster­ström, Coun­try Food Head, IKEA In­dia, “The rea­son for our as­so­ci­a­tion with food goes back quite some time. As far back as in 1959, when we opened the first store in a small vil­lage in south Swe­den, our founder Ing­var Kam­prad had said that it is dif­fi­cult to do busi­ness with hun­gry cus­tomers.

His ob­ser­va­tion is valid even to­day when we have huge show­rooms in var­i­ous mar­kets across the world.”

He fur­ther adds, “Back at that time, our founder re­al­ized that peo­ple used to leave the store after shop­ping for some time. They did not come back be­cause they went out to eat some­thing. So, the idea was born that we need to have our own restau­rant to keep the peo­ple in the store and to give them some­thing nice to eat.”

Glob­ally, the restau­rant busi­ness ac­counts for 5.4 per­cent of the to­tal rev­enue of IKEA whereas in In­dia, the fur­ni­ture gi­ant is ex­pect­ing the restau­rant to con­trib­ute 10 per­cent of the to­tal rev­enue. Ac­cord­ing to Öster­ström, the cost of food for two at the IKEA restau­rant is some­where around ₹250.

Hir­ing Poli­cies

The IKEA store em­ploys 950 co-work­ers in Hy­der­abad di­rectly and 1500 in­di­rectly in ser­vices and ex­pects to host close to 7 mil­lion vis­i­tors each year.

Go­ing for­ward, each

IKEA store in In­dia will have be­tween 800-1,000 co-work­ers and about 1,500 work­ers in­di­rectly en­gaged in ser­vices, which makes a to­tal of ap­prox­i­mately 2,300 em­ploy­ees per store.

Elab­o­rat­ing on the re­cruit­ment plans for In­dia, Anna-carin Mans­son, Coun­try Head – HR, IKEA Retail, says, “IKEA will hire 50 per­cent women co-work­ers at all lev­els, this trans­lates to about 7,500 women co­work­ers by 2030. We will em­power and nur­ture them to grow with IKEA and cre­ate suit­able work conditions to re­tain them.”

The am­bi­tion for IKEA in In­dia is to de­velop a

50:50 gen­der di­ver­sity,

AS FAR BACK AS IN 1959, WHEN WE OPENED THE FIRST STORE IN A SMALL VIL­LAGE IN SOUTH SWE­DEN, OUR FOUNDER ING­VAR KAM­PRAD HAD SAID THAT IT IS DIF­FI­CULT TO DO BUSI­NESS WITH HUN­GRY CUS­TOMERS. HIS OB­SER­VA­TION IS VALID EVEN TO­DAY WHEN WE HAVE HUGE SHOW­ROOMS IN VAR­I­OUS MAR­KETS ACROSS THE WORLD.

– Hen­rik Öster­ström, Coun­try Food Head, IKEA In­dia

en­cour­age and cre­ate unique op­por­tu­ni­ties for women in so­ci­ety. To­wards this, the brand has a non-ne­go­tiable com­mit­ment to hire 50 per­cent women co-work­ers at all lev­els in In­dia in­clud­ing fork­lift drives and as­sem­bling co-work­ers.

IKEA aims to pro­vide more op­por­tu­ni­ties to women in dif­fer­ent life sit­u­a­tions through flex­i­ble work hours, pos­si­bil­i­ties to choose suit­able jobs, child care fa­cil­i­ties at the work place and by se­cur­ing a healthy and safe en­vi­ron­ment.

“IKEA also wants to bring back women who have taken a sab­bat­i­cal and dropped out of the work­force due to mar­riage, child birth etc. We want to be known as a work­place pre­ferred by women who to­day hes­i­tate to join back work due to many rea­sons such as lack of pro­fes­sional train­ings, so­ci­etal con­cerns and safety is­sues,” Mans­son states.

IKEA has a unique hir­ing process as the brand be­lieves in value base hir­ing and give pri­or­ity to in­di­vid­ual’s val­ues more than their ex­pe­ri­ence and de­grees.

Ex­pan­sion Plans

In the next phase of ex­pan­sion, IKEA will be present in other cities like Ahmed­abad, Su­rat, Pune, Chen­nai and Kolkata with a multi-chan­nel ap­proach. By 2025, the brand is look­ing at open­ing more than 25 touch­points across var­i­ous cities.

“IKEA Hy­der­abad is a large store as comapred to many of our other stores across the world. When we en­ter Mumbai, we want to en­ter as a multi-chan­nel re­tailer. Go­ing ahead, we are look­ing at a store giv­ing a same brand ex­pe­ri­ence, a num­ber of smaller for­mat stores, which will still be big stores, where we can get closer to the cus­tomers in the city cen­tres and then an on­line ex­pe­ri­ence also that gives cus­tomers an op­por­tu­nity to meet IKEA when­ever, wher­ever and however they want,” re­veals An­toni.

The brand aims to be present when­ever the cus­tomers wants by var­i­ous chan­nels like on­line, smaller touch points and large IKEA stores.

An­toni says, “We see that In­dian mar­ket holds a lot of po­ten­tial for brand IKEA. We do not see In­dia as a coun­try, but we see it as a con­ti­nent with a lot of peo­ple and lot of needs. We see a lot of mi­croterms that will sup­port us along with other re­tail­ers. It is a grow­ing econ­omy, maybe we might be a lit­tle bit bumpy ini­tially but over the com­ing years In­dia will grow from strength to strength as an econ­omy.”

He fur­ther adds, “We see it as a young coun­try with al­most 500 mil­lion peo­ple be­low 25 and they will need new homes, we also have a strong ob­ser­va­tion that peo­ple who will shift cities will also need new homes. Then we are very ex­cited about In­dia in the sense that peo­ple love homes and it is not the same in the other Asian coun­tries where peo­ple many times cel­e­brate out­side the home. While in In­dia, it is fam­ily, friends, fes­ti­vals and all over the food, so the four F’s drives life at home and there can­not be a bet­ter place for a home fur­nish­ing com­pany to be.”

IKEA is look­ing for­ward to spend­ing ₹1,000 crore per store. So far, the brand has spent half of the ₹10,500 crore that was ap­proved as ini­tial in­vest­ment in 2013.

IKEA is fo­cus­ing big on healthy and sus­tain­able liv­ing. The brand’ am­bi­tion is to pro­vide af­ford­able good qual­ity, value for money and well-de­signed home fur­nish­ings to many peo­ple.

Go­ing for­ward, IKEA is look­ing for­ward to open­ing all the stores with plot size be­tween 8-11 acres.

The brand is count­ing on 15 per­cent growth year-on-year eas­ily on same store ba­sis be­cause the in­ter­est in Life at Home will grow.

“More the in­ter­est in Life at Home will grow in In­dia, more play­ers will en­ter In­dia and then the mar­ket will grow. This is just a be­gin­ning of a new era,” An­toni con­cludes.

IKEA WILL HIRE 50 PER­CENT WOMEN CO-WORK­ERS AT ALL LEV­ELS, THIS TRANS­LATES TO ABOUT 7,500 WOMEN CO-WORK­ERS BY 2030.

– Anna-carin Mans­son, Coun­try Head – HR, IKEA Retail

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