Ikea finally opens doors in India
SWEDISH RETAILER EXPECTS 6M VISITORS ANNUALLY AT FIRST STORE
John Achillea, managing director of Ikea India, holds a flag with colleagues next to autorickshaws painted in Ikea colours, at a promotional event for the opening of the new Ikea store in Hyderabad city. Homeware and furniture giant Ikea opened its first store and restaurant in India after years of trying. There’s one tasty tweak to its offerings: its famous Swedish meatballs come in chicken and vegetarian variations, instead of beef, to appeal to local dietary sensibilities.
Ikea spent 12 years studying India and visited 1,000 homes in major cities to see how its people lived. Today, as a few dozen early shoppers walked through the doors as the emporium opened in Hyderabad, the acid test began of whether the furniture giant understands what Indian consumers want.
“I have no plans to blow a lot of money today, maybe just buy some kitchenware, but this is going to be a destination for me,” said Rajani Venugopal, a businesswoman who waited about an hour and managed to be the first person in the doors.
Some 380 million Indians, a population bigger than the entire US, will join the middle class in the seven years through 2022. Ikea’s 400,000-square foot Hyderabad store is the first step in the retailer’s plans for India, with more outlets scheduled to debut in Mumbai, Bengaluru and the New Delhi area soon after.
By 2025, the company hopes to have 25 stores in the country.
“Ikea has an opportunity to pioneer modern retailing in the home improvement sector,” said Ankur Bisen, head of retail and consumer division at Technopak Advisors Pvt, an Indian consulting firm based near New Delhi.
India’s 1.3 billion people spend about $30 billion a year on furniture and household items like bed linen and cookware, but 95 per cent of those items are sold by small shops that offer custom-built products, according to Technopak.
6 million visitors
What started as a trickle of shoppers at 10am, when the store opened, had turned into a steady stream about an hour later. Ikea expects as many as 6 million visitors annually at the store in the Hyderabad suburb known as Hitec City, a town full of new apartment towers where multinationals like Amazon. com, Dell and Deloitte have offices.
Among the first shoppers was Peraka Sadanandan, 48, who had taken an overnight train with his wife to buy a sofa. He was a little surprised to discover that Ikea wasn’t offering furniture assembly services to people who live outside the Hyderabad area, but he was undeterred. “We have an old house,” he said. “We plan to refurbish it.”
Indian shoppers aren’t used to assembling their furniture themselves, so Ikea is offering to deliver items and install them at people’s homes, if they live nearby enough.
Food to customers’ hearts
Other tweaks to the retailer’s model appear at its 1,000-seat cafeteria, where half the menu items, including samosa and seasoned biryani rice, are Indian favourites. Ikea’s iconic Swedish meatballs are made of chicken or vegetables, to meet Hindu strictures against eating beef.
“Food is the entry point,” said store manager John Achillea.
The furniture line-up includes more folding chairs and stools — flexible seating — for Indian households where family and friends tend to pop in often. Cabinets and countertops come at lower heights because India women tend to be shorter than Europeans and Americans. Since children often sleep in the same room as their parents, one model bedroom includes a child’s bed amid all the furniture. The store also stocks at least 500 products that are priced under Rs100 ($1.50).
“Yes, we did something different for the India market,” Ikea Group’s CEO Jesper Brodin said in an interview. “Indian looks are super important. We need to connect to the Indian solutions.”
Venkatesh Pola, 38, a pharmacist from a nearby town bought a stool and some glassware and said he loved the store’s automatic checkout. “This DIY experience was amazing,” he said. “I’d never touched a scanning machine in my life. But after doing it myself, I feel great.”