Patrik was speaking at FICCI Massmerize 2018 recently concluded in the capital city New Delhi. He spoke to Retailer Media at the sidelines of the event.
How do you see Indian home furnishing market is evolving? In fact, IKEA’s entry caused a sense of apprehension among small retailer about market disruption. How do you rationale the idea considering the market size?
It is too early for us to comment on how the market is evolving but I believe it will grow a lot creating a room for everybody. We don’t necessarily talk about IKEA in our marketing campaigns. In fact, we want to create aspirations by telling how someone can improve their homes. Off course, once someone is excited about home improvement, the very next step is visiting the store to different product at IKEA store or with some other retailer. In fact, we saw similar apprehension in Russian market but furniture entry received double digit growth in post IKEA presence.
Indian market is under stimulated with a lot of space for home furnishing players. We are looking to grow with our peers.
IKEA is a big box retailer with store size spread across 4 lakhs sq.ft of area. India is the country where quality retail space is really a challenge. In such scenario, going forward how you would sustain the momentum that the brand has garnered with Hyderabad launch?
Yes, we do agree quality retail space is a challenge. We believe that at least 10 Indian cities can have large store experience then we will look at penetrating with small format city centres along with strong online component. We see online as the base since all the consumers have Smartphone today, so we need to have great mobile website and social media along with good social commerce. This is our initial strategy, and then we will go to various physical retail points to get touch and feel and plan, ordering etc.
So the brand is betting online push in India compared to offline expansion in India?
I believe we will have higher online share in India as compared to other markets mainly because we will have few stores. If you go to markets like Swedan where 16 stores are catering 10 million people getting online share is very difficult due to proximity of offline store. We are looking to open few stores in India and very large online presence. Though we don’t have online shares in India yet but we are hopeful to grow faster with online channel once it will be operational. We will pan to open online sales in India by next year.
Going forward what would be the pricing strategy. Also are you looking to cross sale products from other online furniture retailers?
We are value for money company we will continue to remain affordable. Our focus is on IKEA products only.
Being a foreign retailer, what kind of operational challenges do you see in Indian market?
Our experience is very good so far; since FDI is opened up it is very easy to open shop here. Now, the challenge how to bring ease of operations because there are so many licenses that every year you have to apply again along with tax filing and labeling issues etc. I think Indian government should endeavored making investment easy in India.