IKEA Looking For Partnerships With Russian Companies

IKEA wants to form strategic partnerships with Russian companies to expand its online business in the country.

According to Reuters, the retailer’s Country Manager Pontus Erntell said the furniture chain plans to open more than 100 pick-up points in Russia this financial year, which started on Sept. 1. IKEA already owns 14 hypermarkets in 11 Russian cities, and is trying to entice more customers to shop online, which now accounts for 8 percent of its Russian turnover.

Sales at IKEA furniture stores in Russia rose 2 percent in the fiscal year through August, while visits to its eCommerce site went up 12 percent.

In addition to expanding in Russia, the company is also opening its first brick-and-mortar location in India. The store, which will be in the city of Hyderabad, marks a departure from the retailer’s do-it-yourself business model, as IKEA plans to have a 150-person assembly team at that location. 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.

Beyond assembly services, the new location will also stock products that are geared toward the preferences of the local market, such as lunchboxes that can accommodate multi-course meals and 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.

And IKEA is making other moves in international markets: To reach more consumers and foster more eco-friendly operations, the brand is testing out renting its furniture offerings in Japan. The furniture rentals are 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.