IKEA switches gears; to begin online sales before Mumbai store launch

Swedish furniture giant, Ikea has reshaped its organization policy to adapt to the growing shopping channel - online. The company will launch online sales operations for its Mumbai outlet through its website, contrary to its traditional plans of opening a huge walk in-store facility that encompasses the furniture displays and a restaurant before starting its e-commerce operations.

The multinational brand is entering the Mumbai market with its first multi-channel, and multi-format model. The new policy was put into place as the company is trying to reach out to a younger customer base.

It can be a strategical move as well, as it will help the company to start selling merchandise and penetrate the market well before opening its 4,30,000 square feet Navi Mumbai store that has been under construction since 2017.

Operating a huge outlet in one of the most densely populated country can be a logistical challenge for any company, but with its multichannel strategy, Ikea aims to launch smaller outlets, pick up centers and customer service stations in its mission to create 25 customer touchpoints by 2025 and to reach 49 Indian cities with over one million in population by 2030.

Present in more than 50 countries, IKEA is the first multinational single-brand retailer which got an FDI approval to invest Rs 10,500 crore in single-brand retail and operate its outlets back in 2013. It took five years for the firm to launch its maiden store, a 400000 square feet outlet in HITEC City Hyderabad in 2018

The outlet offers around 7500-8000 products and houses a 1,000 seat restaurant, the biggest ever by the Swedish company. 

The furniture company’s move to woo shoppers through e-commerce channel poses a direct challenge to existing online players such as UrbanLadder, Pepperfry, and even brick and mortar stores such as Home Center, @Home among others. 

None of these brands possess the brand value or the vast inventory of self-branded products including 1,000 products. Products such as toys, hangers, and container boxes are relatively cheaper in India than in international markets.

Even the store experience at Ikea is second to none with its outlets designed to feel like a maze and its restaurant that offers pocket-friendly local delicacies and Swedish pastries, differentiating itself from any retail chain operator in the country.