Indian home furnishing market is worth over $40 Billion and continues to grow.
The organized retailers have a huge task ahead as they are facing stiff competition from local unorganized sellers.
Ikea first Store in India is based in Hyderabad. Spread over 400,000-square-foot it offers a range of furniture, linens, kitchenware and other goodies with over 10,000 and 30,000 visitors per day.
The store is located in Hyderabad’s Hitec City. Home to some of the global giants like Amazon, Google, Facebook, Microsoft and many more.
Ikea’s offerings appeal to younger buyers not ready to invest in India’s traditional heavy wood furniture.
Ikea boasts of life-sized drawings and fully kitted-out living rooms, bedrooms, kitchens, and offices to give customers a realistic feel.
However, the hottest sellers are the 1,000-odd items priced below 300 rupees ($4.18), contributing negligibly to company profitability.
As per reports, Ikea will register a turnover of about $4 billion in the next 5 years,
It is planning expansion in India with stores across Mumbai, followed by Bengaluru, and New Delhi.
How is Consumer reacting?
India’s increasingly prosperous middle class now has more disposable income. They are looking to spend on a better lifestyle however are not easy to please.
Today consumer is spoilt for choices and brand like Ikea is not only facing competition from organized sector but online retailers like Amazon and Walmart-owned Flipkart.
The competition is not only from these organized players but local makers as well. The local players not only offer much more variation, customization but give a huge price advantage.
Local players have more human connect as compared to bigger giants which are more transactional.
18 % of goods and services tax (GST) is another hit which organized players must bear.