Swedish home furnishing company IKEA, which opened its first store in Hyderabad in August this year, is planning to widen its reach across the country.
The homecare major is planning to implement an omnichannel strategy to acquire a significant market share in the growing Indian furniture market. According to various estimates, the Indian furniture market is pegged at about $10 billion.
IKEA has announced plans to open large format stores in Mumbai, Bengaluru, Gurugram, Pune, Ahmedabad among other cities, and is planning multichannel strategy which will help create 25 customer touchpoints by 2025.
As part of the strategy, IKEA will focus more on digital channels and expects online growth in the Indian market to be higher than the global contribution in its total e-commerce sales.Presently, online contributes about 10 per cent of its overall revenue. In India, IKEA has to compete with players like online furniture companies Urban Ladder, Pepperfry, and Walmart-owned Flipkart for market share.
“In India, the important thing for us is to meet the customer’s demand… Previously, we used to meet customers only at the store. With the digital platform, we will be able to interact with customers for longer,” said Patrik Antoni, Deputy Country Manager, IKEA India.
“The retail business is changing across the world. Markets like Europe are our mature markets and our legacy is doing physical stores. For us, India is really new and that gives us the advantage to try new things.
“Here, we can move much quicker towards the modern way of retail. So, we want to start
both offline and online together,” added Antoni.IKEA will kick-start its online business in Mumbai from 2019, and take it to cities like Hyderabad and Bengaluru by 2020. In the first phase, deliveries would be in proximity of the store and done within a couple of days. With its distribution center in Pune, IKEA may also start online delivery services there. In order to strengthen online sales, it has also started discussions with delivery partners.
“Online distribution needs a strong supply chain and we are in the discussion stages with a delivery partner. For the assembly, we have our in-house team and have partnered with UrbanClap,” said Antoni.
The company hopes to reach 49 Indian cities with over one million in population by 2030.It also plans to open multiple small format stores and has also started discussions with major real estate players to strengthen its B2B business.