By Kritika Arora
Like other industries, Swedish furniture and home furnishings retailer IKEA India also has seen the impact on demand due to inflation but the company is ensuring to navigate this challenge by keeping its products affordable for the consumers.
“Pockets are getting tighter, people are spending less and therefore we stick to our core. And what we do is to ensure that our products are affordable, it is available at a price that doesn’t pinch the consumer,” said Murali Iyer, chief financial officer of IKEA India business.
Going ahead, to keep the products affordable, IKEA intends to improve its local content for products to 50% from the current 30% — giving more functionality and value to users, Iyer said.
While there has been some pressure on demand due to inflation, the company expects volumes to rev up in the upcoming festive season. To ensure that, IKEA India plans to launch more active campaigns this season.
E-commerce constitutes around 30% of the company’s sales at present and the company is sure that the segment is going to see the strongest growth in the segment in coming years. IKEA India plans to focus on being omnichannel. It opened a small format store in a Mumbai-based mall on Wednesday for better reach.
Currently, the company’s footfalls have reached around 90% of pre-Covid levels but it expects to hit pre-pandemic levels in the upcoming festive season.
Swedish furniture brand IKEA opened its first store in India back in 2018 in Hyderabad and so far has opened five stores in the country, including two in Mumbai, and one in Bengaluru and has projects coming up in Delhi.
The company had committed Rs 10,500 crore investment in the Indian market and so far has reached 70-80% of it. It plans to keep the focus on priority markets, that is Hyderabad, Mumbai, Bangalore and Delhi and expand in tier-2 tier-3 cities through e-commerce first.