IKEA - ADAPTING TO THE INDIAN CONSUMER

Ikea: Swedish social democracy meets DIY-unfriendly Indians - The ...
by Sanjay Badhe December 11, 2012 ECONOMIC TIMES

Even as the FDI in RETAIL debate rages on in India, here's an interesting article of how IKEA will have to adapt to the Indian Consumer.

Will IKEA be a hit or a miss in India?....... and will the DIY approach work in a country where cheap labour and cheap (although sometimes poorly made) furniture will result in stiff competition for IKEA.

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So will IKEA adopt a cookie cutter approach-similar stores and products-which is the easiest to roll out and implement in India?

From the early days, IKEA has pushed the concept that both the furniture and stores should be unpretentious-standardised design, flat pack furniture, self service, friendly store design where it is easy for shoppers to choose and select, minimal advertising with a dependence on its catalogue and so on. And it passes on all the savings to consumers.

But, will concepts such as flat pack, take home and self assemble work here? Many Indians may not be open to the DIY model even though IKEA believes that getting the customer to put together the product gives a sense of involvement and pride. Will IKEA give the model a twist, as it did in the Middle East, to offer assembly and delivery at a price? In fact, India might well get an independent service of assemblers of IKEA furniture!

IKEA may also have to compromise on its store size because poor availability of space and high costs. IKEA prefers standalone stores, complete with service areas and storage, rather than malls although in the Middle East it does have stores inside malls. IKEA's awareness and image too would need attention. Interestingly, in India the brand might be seen as 'aspirational and fashionable' as in other emerging markets, and not the value-driven brand that it is in Europe. This might be good at the beginning, but could prove to be a problem for the value-driven Indian consumer.

Also, while the catalogue is critical, catalogue-based sales have not been very successful in India. Argos, a catalogue sales retailer that entered India in collaboration with K Raheja group's Shoppers Stop and HyperCity chains, has shut shop.

Will IKEA go for smaller, specific catalogues, arranged by categories, for India? Will it use electronic catalogues and use an online version? 

IKEA's image is built around 'Swedishness', with liberal use of Swedish flag colours of blue and yellow as well as Nordic names for products. Will the lack of a 'Sweden perception' in India actually make the IKEA concept difficult to sell here? 

Perhaps IKEA has to listen to the Indian consumer, before deciding its strategy in India.

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