Online sales of home furnishings and home goods form a significant share of the category within Bengaluru, Ikea said citing research
Meanwhile, Ikea will open a big box store, close to 400,000 sq. ft., in Nagasandra, Bengaluru, within a year
New Delhi: Furniture retailer Ikea on Wednesday announced opening up of its online deliveries in the southern city of Bengaluru, pushing ahead its plans to reach consumers across multiple sales channels, even as the local arm of the Swedish company is a year away from opening up its first store in the city.
Online sales of home furnishings and home goods form a significant share of the category within Bengaluru, Ikea said citing research.
“Bengaluru is on the forefront—it’s already the city with the highest share of online home furnishings," Peter Betzel, chief executive officer and chief sustainability officer, Ikea India, told Mint in an interview.
Ikea’s online presence in the city sets a “new retail direction" for the retailer with new touchpoints and services, focusing on both digital and physical formats with an omnichannel approach, the company said.
Meanwhile, Ikea will open a big box store, close to 400,000 sq. ft., in Nagasandra, Bengaluru, within a year.
To be sure, Ikea has accelerated its e-commerce presence in India, opening up online deliveries in cities such as Mumbai, Hyderabad, Pune, and more recently, Ahmedabad, Surat, and Vadodara to consumers who can shop for a range of Ikea goods online. It recently rolled out its mobile shopping app in India.
Ikea’s shopping platforms i.e. both mobile app and desktop offer over 8,000 products including home goods and furnishings.
Globally the retailer has been stepping up efforts to reach more shoppers beyond its signature big box stores—with smaller stores close to large residential areas and ramping up e-commerce sales in response to shifting consumer behavior.
India is no different—where the active internet user base is set to touch 900 million by 2025.
Moreover, the pandemic has accelerated e-commerce adoption among millions of Indian households and driven demand for home goods.
However, buying large pieces of furniture is still something many prefer to do offline.
Ikea will continue to open multiple format stores—both large and small and allow consumers to place orders online, said a top executive at the retailer.
"We are investing in the totality of our business—it’s our omni-channel approach. We have the three top cities—Mumbai, Bengaluru and Delhi that is where our main investments are going. We are also looking where we would like to have our fulfilment centres. Investment in digital capabilities continue, besides the investments in our physical stores," Betzel said.
Ikea plans to engage an estimated 2,500 co-workers directly in the state. This will also generate close to 1,200 indirect jobs, the retailer said. Ikea works with nine home furnishing suppliers in Karnataka.
A typical delivery order merits a shipping charge of Rs299 and can vary basis the overall order size, the company said.
The retailer is eyeing online-first approach across cities in India. This means building more fulfilment centres across cities apart from using its stores for fulfilling orders. The retailer has customer fulfilment centres in Pune and Mumbai. Fulfilment centre will come up in Bengaluru as well as in Delhi.
“Twenty years ago, it was normal to open a store because online didn't play any big role. But with increasing online capabilities, and the convenience part of it, consumer demand online has been increasing. We're not the only country where we are opening cities or markets online first," said Betzel.
Ikea India Private Limited reported 63% jump in revenues for the year ended 31 March 2020 at ₹665.6 crore—over two years after it opened its first store here, according to data shared by business intelligence platform, Tofler.
The furniture, kitchen appliances and home accessories retailer has so far invested ₹7,000 crore in India, across its two stores and several fulfilment centres.
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