IKEA expects this store to attract 7 million visitors annually. Towards this, the company has localised and tweaked its offerings.
For instance, the in-house 1,000-seater restaurant (its biggest yet) will sell samosas starting at Rs10, besides its signature cinnamon buns, coffee, and meatballs. Such pricing is attractive in price-sensitive India.
It will offer 7,500 affordable, good quality, value-for-money home furnishing products, all under one roof.
The store will remain open 365 days from between 10.00 am and 11.00 pm.
The logo of IKEA is seen outside its under construction store in Hyderabad on July 18, 2018
Local and affordable
Understanding Indian shoppers’ price sensitivity, the store offers around 1,000 products priced under Rs200. For instance, among the 7,500 items on offer are chopping boards for Rs100, mugs at Rs59, door-mats priced at Rs99 and monotone sofa throws that cost Rs180.
There are armchairs for Rs4,990 (onwards) and tables such as the India-made Lack table starting at Rs599.
At the restaurant, too, the dishes are modestly priced. For example, a portion of Hyderabad’s famed biryani (a steamed rice, meat, and, spice preparation) costs just Rs99, while IKEA’s signature chicken balls are available for Rs149.
Besides ensuring affordability, IKEA has also tweaked the product categories that it will push more in India.
While textiles is a major focus area for it globally, in India, it is betting on kitchenware and dining products. The company estimates that kitchenware can generate upwards of 10% of its turnover in the country.
So a large section at the two-storied store is dedicated to all things kitchen: pots and pans, spice boxes, idli-makers, cutlery, bowls, plates, containers, and tiffin boxes.
“We anticipate this is the very area where we can see huge volumes going forward,” John Achillea, the Hyderabad store manager, told media.see huge potential in this (kitchenware), even more than textile because India is already a big textile market. While we will have some work to do in textiles, the reality will be that cooking and eating products will be required right from the beginning.”
Even in this, there have been some adjustments made for India based on research—IKEA visited over 1,000 homes to understand how Indian families live. So, for instance, the cutlery sets will only include spoons and forks since Indians hardly use knives to eat.
And it doesn’t stop there.
The IKEA store in Hyderabad will exhibit two full homes that reflect 'Life at Home in Hyderabad', besides different room sets based on different parts of the home like bedroom, kitchen, children's room and living room.
It will also have a market hall where you will find home kitchen utensils and accessories, textiles, rugs, lighting, decoration, stationary and even live plants.
The store will house a 1,000-seater restaurant, IKEA's largest and possibly India's largest restaurant, a cafe which will offer coffee, bakes, frozen yogurt and many more for purchase.
It also offers a kids' play area named Smaland where customers can leave their children as they shop for things.
The IKEA restaurant will offer 50 per cent Swedish specialties like salmon and chicken and vegetarian meatballs and 50 per cent local delicacies like Hyderabadi biryani and samosas, apart from other Indian delicacies, at affordable prices.
IKEA AND FDI
IKEA got Foreign Direct Investment (FDI) approval in 2013 which allowed 100 per cent FDI for single brand retailers in India.
With that, IKEA became the first major single retailer to get the FDI approval and plans to open several stores and multiple touch points across the main cities in India.
IKEA IN INDIA AND FUTURE PLANS
While the first IKEA India store open in Hyderabad, the global retailers has a plan to open another store in Navi Mumbai in 2019.
IKEA has also acquired land sites in the states of Karnataka and Delhi/NCR and continues to look for more in other major cities.
IKEA has been sourcing from India for its global stores for more than 30 years.
Its plan to open retail stores in 40+ cities across the country reinforces its long-term commitment and deep connection with India.
Speaking to India Today, Peter Betzel, CEO, IKEA India said that the company thanked the Telangana government for its tremendous support. He added that he hoped that the people of the fast growing city will enjoy the shopping experience.
The IKEA store employs 950 co-workers with 50 per cent women employee in Hyderabad directly and 1,500 indirectly in services and expects to host close to 7 million visitors each year.
There are currently 403 IKEA stores in 49 countries with a sales volume of 38.3 billion euros. As many as 936 million customers visited IKEA stores in FY17 and more than 2.3 billion people visited IKEA online.