NEW DELHI : Swedish home furnishing retailer Ikea wants to offer something for every Indian. As it completes five years in the country where its reach is still quite nascent and where wide disparity exists in terms of purchasing power, the firm plans to price its products affordably. Susanne Pulverer, chief executive officer and chief sustainability officer at Ikea India, is clear that the attempt, however, is not to change its brand positioning from premium to mass but to have certain value offerings for customers as well.
“We know that purchasing power is still low for many in India. Our full kitchen and customised wardrobe systems, for instance, cannot be afforded by all. To be affordable for many, we really need to look at our prices and have good offers. That’s why we have 1,000 articles under Rs 200 (like vases, bags) so that there is something for everyone, even if they don’t have a big wallet,” Pulverer told TOIin an interview. “We are holding back on price increases. We need to do more local sourcing to get better prices and cut supply chain costs,” Pulverer added. In February, Ikea India had reduced the prices of its products by 16-39% across categories including storage solutions, bedroom furniture and kitchen accessories.
Apart from local sourcing — which Ikea India aims to in- crease to 50% in the long term — a comparatively stable supply chain and manageable costs of transport & raw materials help the brand keep its pricing low. Besides, inflation in India has not been unusually high when compared to other global markets. “Inflation here is not impacting substantially as there is also an optimism in terms of growth. It is more challenging in other markets where you don’t have strong growth,” said Pulverer, adding that the India strategy for the next five years will be to build an omni-channel play.
“Online will be important for us. We will also look at having different-sized store formats, although flagship stores will be at the core of our expansion. We will focus on introducing more services like personal shopping, too,” she said. While new markets like Pune and Chennai are on the radar, the primary aim will be to widen its presence in existing cities where its store penetration is still low.
“We can do more from India for both India and exports. We are already sourcing items like textiles, metals, plastic and going ahead, wood will be an important sourcing item for us. One thing that needs to come in parallel is more sustainable forests that can give us the raw materials — that’s a bottleneck in terms of expanding fast in the category,” Pulverer said.
“We know that purchasing power is still low for many in India. Our full kitchen and customised wardrobe systems, for instance, cannot be afforded by all. To be affordable for many, we really need to look at our prices and have good offers. That’s why we have 1,000 articles under Rs 200 (like vases, bags) so that there is something for everyone, even if they don’t have a big wallet,” Pulverer told TOIin an interview. “We are holding back on price increases. We need to do more local sourcing to get better prices and cut supply chain costs,” Pulverer added. In February, Ikea India had reduced the prices of its products by 16-39% across categories including storage solutions, bedroom furniture and kitchen accessories.
Apart from local sourcing — which Ikea India aims to in- crease to 50% in the long term — a comparatively stable supply chain and manageable costs of transport & raw materials help the brand keep its pricing low. Besides, inflation in India has not been unusually high when compared to other global markets. “Inflation here is not impacting substantially as there is also an optimism in terms of growth. It is more challenging in other markets where you don’t have strong growth,” said Pulverer, adding that the India strategy for the next five years will be to build an omni-channel play.
“Online will be important for us. We will also look at having different-sized store formats, although flagship stores will be at the core of our expansion. We will focus on introducing more services like personal shopping, too,” she said. While new markets like Pune and Chennai are on the radar, the primary aim will be to widen its presence in existing cities where its store penetration is still low.
“We can do more from India for both India and exports. We are already sourcing items like textiles, metals, plastic and going ahead, wood will be an important sourcing item for us. One thing that needs to come in parallel is more sustainable forests that can give us the raw materials — that’s a bottleneck in terms of expanding fast in the category,” Pulverer said.
