Home / Companies / News /  Local sourcing is a very big initiative for Ikea: Rao

Swedish retailer Ikea will attract more shoppers through both large and small format stores, as well as online, in line with its global plans to be a multi-channel retailer, said Kavitha Rao, country commercial manager, Ikea India. Rao, who said Ikea will open its second large-format store in India at Navi Mumbai, a significant market for the Swedish retailer, on 18 December, pointed out that Indian consumers will also be able to buy more locally-sourced products. Edited excerpts of an interview:

How has consumer demand changed post-covid?

The amount of time all of us have been spending at home is really reflecting on how we have begun to see the needs at home. That has had an impact in terms of the interest in home furnishing and what consumers have done in the last nine months. In most Indian homes having a study room or a study table was a nice-to-have feature. Now, it may be a necessity. A lot of allied areas are seeing interest. We can clearly see a big increase in the cooking and eating-related range, apart from organizing and storing related goods. Interestingly, people are buying a lot of outdoor products and doing up the balconies and other places.

How will your store in Mumbai be different from the one in Hyderabad?

The solutions that you will see in the Mumbai store will be very much reflective of the life in Mumbai, which is very different from what it is in Hyderabad. For example, the size of a home in Hyderabad is far larger than what it is in Mumbai. On average, I think 60% of the people in Mumbai live in a space that is less than 500 square feet. So, the solutions, the room sets, and the inspirations will reflect this. The second aspect is also related to how people in Mumbai are focused on multi-functional furniture. Let’s say the living room is also used as a dining space and it could also be used as a work-from-home space. So, you will see some of those solutions brought to life. It has also got one of the largest warehouses to meet the demands of our consumers. In Hyderabad, we went in for the physical format. In Mumbai, we started off with e-commerce as an option. With the opening of the physical format, we’re becoming an omnichannel retailer in Mumbai.

Will the store see more locally-sourced products?

Local sourcing is a very big initiative for us. Textiles were always an area where India had a big strength. However, in the last five years, we built a lot of capability in two other categories. One is space of comfort, which is very important because that is really what goes into our sofas (Ektorp range) and mattresses. The second category is around metal and plastics. Two areas where we are trying to make a difference, but where it is taking us much longer, is solid wood-based furniture and board-based material. Capability creation in India is going to take us a lot longer.

Post-covid have you seen a shift in traffic from your store to online?

Of course, people have channel shifted because in the early stages of the pandemic there was a very strict lockdown. Our own store in Hyderabad was closed for some time. We saw that the e-commerce demand was three to four times of what it was before. At our end, we also a launched click-and-collect mode of shopping. What is very interesting to see is that online for some people is becoming a habit. Online shopping continues to be on a trajectory of growth. I would say that we are happy with it. In a market such as India, which is very mobile, we expected this behaviour from consumers.

Globally, Ikea is opening up across multiple channels. Where does this stand in India?

In India, it’s very important for us to acknowledge the heterogeneity in the market, as well as the heterogeneity in the consumer segments. For us Mumbai is a mega city. As such e-commerce or the Navi Mumbai store is just the starting point for us. Because of the size of the city, its scale and the number of people living in that city, one Navi Mumbai store and e-commerce is never going to be sufficient. We know we have to have a multi-pronged approach. In calendar year 2021, we hope that we will be able to open two smaller format stores, which will also take us much closer to our customers.

When is Ikea opening up stores in north India?

We already have purchased land in Gurugram for which we have some big plans. There is a discussion in Noida, in Uttar Pradesh, as well. So similar to Mumbai, we will have multiple ways to meet our customers in the Delhi—NCR region as well. We will have the standard stores and smaller stores We will have e-commerce. It is also a location where we’re looking at shopping centres as one of the other options.

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