Ikea Targets its Share in India’s $40 Billion Furniture Market

Ikea’s expansion to build stores in tier-1 cities has taken a backseat due to the pandemic, but with the launch of its app it is strengthening its digital capabilities.


Past one year, our homes have transitioned to makeshift offices. Uncertain about life returning to normalcy work from home is here to stay and will be the new workforce model. Trends like work-from-home and study and teach-from-home, have necessitated the need for a proper working space i.e., suitable furniture. These are symptoms of revival for the furniture industry since the vertical is categorised under non-essentials whose sales are dipping due to the government’s covid regulations. To maintain the right posture and enjoy work comfortably from home, the demand for ergonomic chairs, study tables, laptop tables, bean bags, and couches has increased. The furniture industry stood at a no loss no growth rate in 2020, the Retailers Association of India revealed that the de-growth in furniture retail has been in the region of 40 per cent.

Ikea’s Shopping app, Making up for the lost expansion in the pandemic?

Swedish home furniture retail brand Ikea has recently unveiled its mobile shopping app to bolster its online sales. The pandemic has foiled Ikea’s aggressive expansion plan of increasing its presence to tier-I cities in India. After building its second retail store in Navi Mumbai in 2020, Ikea is looking forward to building its third physical store in the southern city of Bengaluru and has acquired land in Noida for setting up its fourth store. But with reduced manpower, the construction of stores is estimated to take more time than targeted. 

Therefore, to compensate for its lost sales due to closed stores, Ikea has launched its mobile shopping app to bolster its omnichannel presence. People in the pandemic are increasingly relying on apps for shopping be it grocery or electrical appliances. The launch of the mobile app will aid Ikea to connect with customers and stimulate furniture and home furnishing sales by showing accurate product recommendations, ratings, and reviews, along with easier searching and browsing experience. The app will personalise user’s feeds with images and products based on their interests and purchases. The app will also allow customers to add products to the shopping cart while physically checking out products in its store. Currently, customers from cities Mumbai, Pune, Hyderabad, Ahmedabad, Surat, and Baroda can purchase Ikea’s products online. Ikea is planning to expand to more cities online and create a customer base of 100 million people.

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The Retailers Association of India revealed that the de-growth in furniture retail has been in the region of 40 per cent in pandemic.

Why did Ikea do this?

Ikea is anticipating stiff competition from Reliance’s acquisition of online furniture retail Urban Ladder, recently bought for Rs 182 crore owning a lion’s stake of 96 percent.

What is in for the furniture retail companies?

India’s furniture market is worth $40 billion as per Technopak out of which 90 percent is unorganised and dominated by few players like Godrej Interio, Urban Ladder, Pepperfry that have high growth potential. In 2020, the online furniture selling platform Pepperfry witnessed a spike in its sales of tables and chairs by 175 percent and 135 respectively. Overall Pepperfry has surpassed its pre-Covid sales volumes by 50-60 percent and is soon to join the unicorn club and launch its IPO.  As there are a handful of players in organised furniture retail, brands developing independent apps can get the benefit of first movers’ advantage to offer a personalised shopping experience. The launch of the app will prove to be an efficient marketing tool, helping differentiate new customer buying patterns and behaviour, therefore, reviving business and hitting profits.

Shalmoli Sarkar
Shalmoli Sarkar
An MBA in marketing and a BTech in chemical engineering, Shalmoli writes on marketing strategies and business technology for new and aspiring entrepreneurs.

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