Marking a departure from its do-it-yourself business model, IKEA plans to have a 150-person assembly team for its first store in India, located in Hyderabad. The company decided to create the team after research showed that many consumers in the local market would not want to assemble furniture on their own, The Wall Street Journal reported.
Beyond assembly services, the new location will also stock products that are geared toward the preferences of the local market. It will offer lunchboxes that can accommodate multi-course meals, as well as mattresses with coconut fibers. In addition, the store's restaurant will offer chicken or vegetable meatballs, as local consumers don’t eat pork or beef.
The rollout comes at a time when India has a burgeoning middle class and approximately half of the country's population is under 25 years old. At the same time, IKEA is facing slowing sales growth and pressures on profit from investments in new channels and eCommerce. “This is the moment of truth,” Juvencio Maeztu, IKEA’s deputy chief executive, told WSJ. “India is an opportunity to make the next 75 years of IKEA.”
And IKEA is making other moves in international markets: To reach more consumers and foster more eco-friendly operations, for example, the brand is testing out renting its furniture offerings in Japan, Curbed reported in January.
The furniture rentals were to be geared toward customers who might not be ready to purchase those items, many of which could cost hundreds of dollars. In addition, IKEA plans to make the initiative environmentally friendly by recycling furniture that consumers might otherwise throw out. Both the rental and recycling programs aim to extend the lifecycle of IKEA products into a loop instead of a straight line.
The move comes as consumers — particularly millennials — are opting for furniture subscriptions through startups like Feather. The startup, which launched in 2017, is renting out furniture from bedroom sets to dining room sets, by the piece or as a fully outfitted room or apartment package deal, to customers in New York City and San Francisco.