Expansion of IKEA in India: An omnichannel approach

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The IKEA store in Canton Township, Michigan.

IKEA is aiming to open stores in Mumbai, Bengaluru, and Delhi/NCR and they are now looking for an omnichannel approach, by integrating its mortar and brick format stores with online stores. According to the company’s India CEO Peter Betzel, the COVID-19 pandemic has decreased the Swedish furniture retailer IKEA’s expansion plans in India, but the company is adjusting to the new normal while continuing to bet on the country as one of its “very important markets”. With the changing consumer buying behavior because of the health crisis, online business will play a major role for IKEA, which plans to expand in India with an omnichannel approach. He also told that their Mumbai store will open within the next half year approximately.

The pandemic may have slowed down IKEA a small amount as it has for everybody, but they’re adjusting to the new reality and they are heading in the right direction with our projects. Some of the prioritized cities for Ingka Group for fast expansion are Bengaluru, Mumbai, Delhi. Ingka handles the worldwide retail operation for IKEA, which includes a target to achieve 100 million people in India by 2022 through an omnichannel approach. They are moving on to establish a powerful omnichannel presence in Hyderabad, Mumbai, Bengaluru, and Delhi/NCR and are exploring other opportunities in India. As per the company, it’ll be through a mix of massive IKEA stores, smaller city-center stores, and an online platform as a selling channel.

IKEA, which received government approval in 2013 for its ₹10,500-crore proposal to open retail stores under 100 percent FDI, has signed MoUs with Telangana, Karnataka, Maharashtra, Haryana, and Uttar Pradesh to open retail stores. When explaining the long run plans about the company, they’re progressing to open 25 stores by 2025 in nine cities. Ingka, which handles the worldwide retail operation for IKEA, would open its second store in Mumbai within the next six months after making its first store at Hyderabad operational two years ago.

Currently, IKEA has one distribution center in Pune. During the lockdown, IKEA had introduced ”Click and Collect” safe and contactless shopping in Hyderabad. Now more people are shopping online for all the items they need for his or her homes. The company is expecting that online sales to be a powerful growth driver and hence IKEA will still invest in building more digital. According to Betzal, it is very important to have clear communication in all their channels to reach their potential customers as many are looking at online product descriptions, quality standards, customer testimonials, usability, etc. to create a buying deal decision. He also told that as many potential customers are first-time digital users, the company wishes to support them in their online journey.

However, Betzel added that physical meeting places will remain an essential hub for home furnishing inspiration, feel, touch, try our range, fun outing, although in a very different manner because of COVID-19. And this could be the target point of IKEA’s expansion, which is going to happen.

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