Swedish furniture retailer IKEA is adopting an omnichannel approach to expand in India. The company believes that online business will play a ‘very important role’ for IKEA due to changing consumer behaviour.
The expansion plans of IKEA in India have been slowed down due to the COVID-19 pandemic. However, the company is betting on the country as one of its ‘very important markets’ while adjusting to the new reality.
Peter Betzel, CEO of IKEA India, said, “The pandemic may have slowed us down a bit as it has for everyone, but we are adjusting to the new reality and are on track with our projects. Our Mumbai store as I mentioned will open within the next half-year or so.”
“India remains a very important market and we have our plans to enter many cities with an omnichannel approach. Bengaluru, Mumbai, Delhi are among the prioritised cities for Ingka Group for fast expansion,” he further added.
The furniture retailer is looking at launching stores in Mumbai, Bengaluru, and Delhi/NCR. It is further aiming to have an omnichannel approach, by integrating its brick-and-mortar format stores with online stores.
Through an omnichannel approach, Ingka, which handles the global retail operation for IKEA, is targeting to reach 100 million people in India by 2022.
Betzel stated, “We will establish a strong omnichannel presence in Hyderabad, Mumbai, Bengaluru and Delhi/ NCR and are also exploring other opportunities in India. It will be through a combination of big IKEA stores, smaller city-center stores, and an online platform as a selling channel.”
IKEA has inked MoUs with Karnataka, Telangana, Maharashtra, Uttar Pradesh, and Haryana for introducing retail stores. It is eyeing to unveil 25 stores by 2025 in nine cities.
After making its first store at Hyderabad operational two years ago, Ingka will be introducing its second store in Mumbai in the next six months.
Betzel, who is also Chief Sustainability Officer at IKEA India, stated, “Our ambition is to expand in more cities in India with an omnichannel approach. Based on our expansion plans, we will also develop logistical capabilities to serve customers more efficiently.”
At present, the retailer has one distribution centre in Pune.
Online channel: A growth driver
IKEA had launched ‘Click and Collect’ contactless and safe shopping in Hyderabad during the lockdown.
Betzel said, “We expect online sales to be a strong growth driver and IKEA will continue to invest in building more digital.”
Apart from this, the company has unveiled online consultations/planning services for kitchen, office furniture, wardrobe, etc.
“It is important to have clear communication in all our channels to our customers as many are depending on online product descriptions, customer testimonials, quality standards, usability, etc. to make a purchase decision. As many potential customers are first-time digital users, we want to support them in their online journey,” Betzel further added.