Ikea, the world's largest furniture retailer, known for its range of affordable products, is set to slash prices further to appeal to a wider Indian audience
Mumbai:Come July, Swedish furniture maker Ikea could trigger a price war in India’s $49.5 billion home furniture and furnishings market with its Hyderabad store, the first in the country, offering about 15% of its products at ₹ 200 or less, a top company executive said on Monday. Ikea, the world’s largest furniture retailer, known for its range of affordable products, is set to slash prices further to appeal to a wider Indian audience.
“We are very confident that we will enter the market with the lowest possible prices. There will be 1,000 products at prices below ₹ 200 when we open our store," Ikea India’s Maharashtra market manager Per Hornell said over the phone.
“The articles will, over time, contribute a lot to our turnover and to our profit."
However, the company does not seem to be in a tearing hurry to expand its India footprint, with the Mumbai store, its second, expected to be launched only in mid-2019. Ikea, known for its big blue box stores, has a fledgling digital presence.
It is expected to launch its online store following the Mumbai launch.
The company may also experiment with new business models such as home furnishing consultancy, wherein customers opting for the Ikea family members’ programme can request home visits for personalized recommendations.
Ikea, which has a range of do-it-yourself (DIY) products, recently announced a tie-up with mobile-based services platform UrbanClap as its furniture assembly service partner for the Hyderabad store. This will allow Ikea to provide services at a low price, said Hornell, adding that these professionals trained by Ikea will reach the location within 90 minutes of booking the services online.
The Indian home furnishing and furniture market is expected to see compounded annual growth of 13% between 2016 and 2021, according to consultancy firm Wazir Advisors. The organized market, which includes retail chains Home Centre, HomeTown and online retailers such as Pepperfry and Urban Ladder, accounts for 15-16% of the market, but is growing at 20-22% per annum, said Harminder Sahni, founder of Wazir Advisors.
Between September 2016 and August 2017, Ikea Group’s revenues grew by 1.7% to €36.3 billion, according to its annual summary report. While the company’s website got 2.3 billion hits, 936 million people visited its retail stores globally during the period. As of August 2017, Ikea had 403 stores across 49 markets.
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