IKEA entry in India

Swedish founded multinational group, currently leading in furniture industry since 2008. IKEA is branded as modernist designer for various types of ready to assemble furniture’s. IKEA is recognized for its cost control, continuous product development, operational details and corporate analysis which help IKEA to achieve lower pricing than its competitors.

Strategies of IKEA to establish in Indian market

IKEA announced its map to enter Indian market in 2012 with an initial investment of Rs. 10,500 crore. To enter Asia’s third-largest economy IKEA had gone through a process of six year policy approval and analyzing market requirements, finalizing large parcels of lands and local sourcing the firm is all set to cater Indian market with its store in Hyderabad.

IKEA is having a large range of 7,500-8,000 products which can cater Indian market with all prices and dimensions. IKEA is planning to target not only those who are well aware of the brand but the remaining potential customers, by reaching them through online portals or stores nearby. To get potential outputs the organization is not only focusing on gaining outputs but is testing its feasibility in Hyderabad, Delhi, Mumbai, Bangalore and exploring cities like Pune, Chennai, Kolkata and Surat to avoid any disruptive result in its operations.

IKEA had been known for DIY (do-it-yourself) experience for its customer, which will not be entertained by Indian market. There by it becomes necessary for the MNC to have its assembly line if they want to establish its roots in Indian market.

IKEA had planned to come up with addition benefits like service in store where customers will have an advantage off designing their furniture’s according to their requirements and relatively low pricing than others. Opening small-sized store is what they are coming up with, their main motive is not to showcase all the products and its variable but they want it to be noticeable on online portals.

Main focus of IKEA is ‘Affordability and accessibility’, and if IKEA is able to deliver the product as per the requirements of citizens it will soon start earning returns from the Indian Market.

IKEA’s success in Hyderabad

On 9^th August, 2018 IKEA opened its very first store in Hyderabad, India, since then it is able to attract an average footfall of around 28000 people a day. Managing footfall is a difficult task to perform in Indian market, therefore IKEA has to work on bits and pieces to maintain and increase it’s present number of customers.

The most successful strategy followed by IKEA is selling more than 1000 products under the price range of Rs 200 which stands as a tough competition for the Indian market. Penetration pricing always attracts the maximum number of potential customers towards the organization in the beginning itself. IKEA is not just about assembling the furniture but also about the food they serve in the premises popularly known as “The IKEA Food”. In India it has come up with its authentic taste in the form of “Desi Dishes” which has increased their food sales figure till date.

Its marketing strategies have led to increase its brand awareness from 5%, when the store was under construction, to 80% as on the date of its opening. To further keep up their performance they will have to pull up their socks and keep following the trend.

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Author- Hemant DamaniKautilya 
IBS Mumbai