Enter IKEA – And It’s Already The One-Stop Shop For Aspirational Living

A superstition in Sweden is that if you walk under a ladder, three weeks of bad luck will follow. And guess what – Swedish furniture retailer IKEA’s Hyderabad store opening was moved by exactly three weeks. Should we wonder? The company, of course, announced that it needed this time to work to “live up to its expected quality commitments”. But, last-minute cancellation for a company that is known for its meticulous planning?

Not many know that an exclusive preview held in the first half of July, before the original launch date of 19 July, had been a roaring success. Sources inform us that items worth Rs 30 crore were sold that day, mostly big-ticket ones like mattresses and furniture. However, the massive crowd that this preview drew was unanticipated – and enough to give cold feet to the company about its security preparedness. A decision to postpone the launch was taken, which would give it time to make security arrangements that large – very large – crowds warranted. IKEA went big on upscaling security, paying a premium to get personnel, many of who came from residential societies in the neighbourhood (much to the society associations’ indignation).

The new opening was scheduled for three weeks later, and, a day before this new date of 9 August, a preview meeting was held for media and others. This time there were dysfunctional microphones, and the sound system was “making awful noise”. This actually made people wonder whether IKEA would find its feet in India, its Indian journey having begun on an “inauspicious note”, as this article indicated.

Simultaneously, a Congress Member of Legislative Assembly had filed a public interest litigation petition against the Telangana government’s decision to allot the 16.27-acre land to IKEA at cheap prices, resulting in Rs 500 crore loss to the government. People did wonder if this development would call for another postponement.

However, this troika of unpleasant surprises notwithstanding, the company launched its first Indian store in Hyderabad on 9 August.

Sofa’ So Good

Oh wait, more was in store. On the noon of Saturday, 11 August, the company had to use social media to dissuade crowds from coming, as the parking and store were full: “Hej Hyderabad, your excitement has overwhelmed us (literally)…But we are open 365 days and our low prices are valid every day. So take all the time you need.” (A hint of condescension there, or is it just us?)

By 12 August, the company, announcing that it was a full house again, put up on its website updates on average wait time, followed by “…we suggest you plan your visit another day for an amazing IKEA experience”. Whereas the first day had seen 40,000 people, the following week had 28,000 visitors daily, as reported in Quartz India.

Three weeks into the opening, at the time of writing, the parking at IKEA is still full and the rush, though a tad less mad, persists. A customer who visited at noon on a weekday told us that there would have been more than 1,500 people shopping at that point, and also that the queue in the restaurant had a one-hour wait time. Another customer who visited in the weekend gone by, after allowing enough time to lapse, told us that the crowd inside is a deterrent to her visiting again for a few weeks at least, though she would like to go back. Many people who know that the goodies will not go out of stock – because IKEA is a bulk player – are sitting back and waiting for the crowds to ease up.

A big chunk of the crowd is contributed by the location – the area is close to the information technology hub there, and, with high-end localities nearby, home to people who have been to IKEA stores abroad. It is also close to one of the entry points into the city when coming from the airport, and so, the Hyderabad store is also catering to Indians in other cities. Travellers to Hyderabad are making visits to pick up and take back the compactly packed stuff as overheard in the billing queues.

One lady from Delhi, on her first visit to the city, had IKEA and Golconda Fort on her day-one itinerary, where she went straight from the airport. Her first impression? – “I saw it and I could have been in Singapore – literally as if the cookie cutter model has been lifted off and mapped on here. The car park, the way they have laid out their area, the first floor, restaurant, everything. It’s also exactly the same size.”

Curiosity is bringing hordes of people to the store, and across age groups and across profiles. The company’s strategy in India includes inclusion, and hence the multitudes of products at low and even dirt-cheap prices. Most people familiar with IKEA know just how tempting everything is – “There are big and, fortunately, some smaller items which you cannot resist purchasing”, says a 75-year-old artist.

Patrik Antoni, Deputy Country Manager, IKEA India, had told a website last year that introduction of the goods and services tax (GST) had made sourcing and transportation easier, and that will help make the product ranges more affordable, giving value for money to the customer.

IKEA, A Disrupter of Sorts?

IKEA has caught the attention of the people of Hyderabad and, from talking to a range of people, we feel IKEA has considerable mover-and-shaker potential in India. Says Shweta, a visitor to Hyderabad, and who’s been a regular at IKEA stores abroad: “I think it’s going to be really huge for India, for the aam aadmi (common man). Earlier, it was considered premium and when people went abroad, they brought back IKEA stuff. Now everything is available here, and at the prices that it has been brought in, it’s going to be very accessible.”

Much of it is about meeting many unmet needs of the Indian customer, and also about creating a space that hitherto didn’t exist. Says Divya, an insurance professional, who is looking to purchase a bed for her toddler: “We saw something we really liked, but thought we would first compare prices with other stores, and also IKEA India’s prices with IKEA stores abroad. Now we are going ahead with the IKEA product; we realised that their India prices are much lower, and anyway we aren’t getting this quality and finish elsewhere. More than that, actually, we are not getting the option they are giving us – a bed that you can size-customize as your child grows.”

IKEA appears to be creating a space by allowing flexible products, rather than fitting into niches. One customer says the same about the knickknacks available, “They have such interesting stuff and lots of options like different colour schemes that would not occur to you, beautiful storage boxes, glasses with lids that are microwaveable... It’s amazing because there are so many variations from which you can choose – where have we had those options before in India?”

Creating solutions has, of course, been one of the selling points of the company, which is always quick to judge and even pre-empt people’s pulse at any given point of time, and translate it into solutions. A high-profile designer tells us that IKEA’s differentiation lies in the way it plays with space, colour, and lighting. This article reveals the level of possibilities that the company is considering – also incorporating sound and scent and integrating it all with smart solutions, technology, and the needs that arise from rapid urbanisation.

Creating a new mindset is the other disruption that is taking place. Like an Indian Institute of Technology graduate customer says after seeing the store: “It opens people up to ideas. People who haven’t even thought about these things, they say ‘Hey, I can actually buy that!’ It allows people to think of a dream house, and many things that were unachievable earlier – IKEA makes it possible.” In essence, creating demand through creating new aspirations.

A big unmet need of Indians is quality, and after-sales service follows closely. Rupali, who bought a study table at the IKEA store told us that she had experienced IKEA furniture abroad, and also the ones available at premium furniture retailers in India, and she would any day go for IKEA: “At the same price nearly, it is such good quality. And the experience setting it up is excellent too – the spacing, joining techniques, etc. The parts are so smooth and also make the product extremely sturdy”. A designer who has worked for vendors for IKEA confirms that the company has “very high quality standards”.

Another IKEA customer told us she had had a “pathetic experience” with the service of a popular online furniture retailer. This is corroborated by an internet search, which throws up thousands of reviews by dissatisfied customers when it comes to service and complaint-servicing of Indian retailers. Customers are, therefore, happy to pay the “decent” installation charges of IKEA – part of the company’s India-strategy, knowing everyone may not be comfortable with their DIY (“do it yourself”) models – if they get timely service.

The small and big furniture suppliers we spoke to were quick to dismiss the IKEA-ization of Indian furniture preferences, but the fact is that many of them are, in fact, offering discounts, putting up subtle ads, stepping up their marketing efforts in general, and also rethinking strategy, like turning to turnkey projects.

Furniture is not the only area that lies in the disruption zone. Also, potted plants, crockery, linen, upholstery, curtains. “You get such good quality plants, neatly presented, at Rs 30, why would I go outside and give anyone outside the arbitrary Rs 300 he asks for?” Similarly, for steel utensils – “We have a lot of steel in India, but these are very well-finished products with sturdy handles, clean easily, and food tastes good when cooked in these. I wouldn’t mind paying a premium for these.”

As one customer sums it up: “When you get into IKEA, all your needs will be taken care of. And at a good price.”

All Things Right and Beautiful

Add to all this the fact that IKEA is doing all the right things and ticking all the boxes – the autorickshaws used for brand advertising initially and now for delivery of products are run on solar power. The store has installed 4,000 rooftop solar panels, mostly used to power its electric vehicles. Further, with sustainable textiles and women’s empowerment coming up in a big way, IKEA has reportedly tied up with women’s organisations in this area. Again, in Hyderabad, the company gave a makeover to one of the usual ramshackled bus stands, giving us a taste of what ‘could be’.

“Swedesi” cuisine, including samosas, biryani, and vegetable balls (replacing the usual meatballs), at unimaginably low prices, count no less. Before you know it, therefore, IKEA is making its way into your mind – through your conscience, head, heart, and palate.

Of course, shrewdness is the name of the game, and IKEA has spent considerable time understanding the country, culture, and consumer behaviour – the latter through several home visits.

There were reports recently that the company is not getting their print catalogue to India. The reason for this could be what the company’s top executives had told YourStory last year about the company’s plans to market through local language in print and TV, in addition to the online route.

Has this not occurred to other existing players in the market? Deep pockets matter, of course, as does experience, international exposure, and perhaps an inner wisdom that comes from being rooted in one’s own traditions.

In-store, Online

Naysayers’ views notwithstanding, IKEA will do in the home solutions space what Decathlon has achieved in retail sports business. The latter’s shopping spaces with a playground feel and a product mix that encourages impulse buys, as this article explains, has managed to create a demand for sports gear and other goods by bringing to the store even those far removed from sports generally. It’s the entire experience.

How much more, then, for a store that deals with the home and its doing up? IKEA is also about in-store experience, and the stated intention of the company is to help “make it a day out for the whole family”. The play area and activity sections for children, the restaurant, the ground floor with assorted products to dress up the home with, and the “concept rooms” that use products, colours, spaces and lighting, wardrobes, and attachments to give an idea of the possibilities in different rooms – all add up to the day-outing.

Totally, there are about 10,000 products, as per reports, with several items at below Rs 100. Customers corroborate that it’s a place where you could just go, chill in, with lots of space, air conditioning, good and low-priced eating options – and that to see the whole place you would need the whole day. “It’s just the way they’ve set up their spaces – it’s a treat to the eye. It’s very fun and exciting”, says Shweta.

And therefore, following the Decathlon logic, where customers prefer to go to the store rather than buy their products online, it’s the experience that makes the difference. Customers confirm that the “impulse buys” always end up filling shopping baskets, as also burning holes worth a few thousand rupees in the pocket each time they enter IKEA.

From what we know now, the company plans to open 25 such stores by 2025. Online sales is to happen next year – confirmed recently by a reply on the IKEA page on Facebook. We wonder though if plans might be amended to begin the online operation sooner, given the ‘rush’ experience at the physical store, and also that the festival season is about to begin soon.

The ramifications? India’s customers are rejoicing; Indian homes may just begin to look the same all across, with IKEA-ized solutions and dressings.

At another level, the Make-in-India initiative will suffer a setback. IKEA has been sourcing locally, so could more Indian vendors tie up with IKEA? “Probably not”, tells us the designer who’s worked with a vendor, “They have a very closed matrix and not everyone can come close to IKEA. It is very difficult to work with them; only those who can deliver on quality and timelines can work with them.”

Perhaps IKEA’s entry and the ripple effects it creates over a period of time could well be the jolt – or the opportunity – everyone needed to reinvent themselves. Indian vendors and retailers would do well to introspect and keep moving ahead so as to remain relevant.

For now, it does seem like there’s no stopping IKEA – unless there are “divine intervention” kind of episodes that we mentioned in the beginning. IKEA needs to keep knocking on wood and saying “Peppar, peppar, ta I tra” – like they say in Sweden, to prevent something nasty from happening.