IKEA has priced its furniture even lower in India to lure customers to its first store in the country this week.
The company is pulling out all the stops to make the store a success, including having a 150-person assembly team at the Hyderabad location, 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. 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.
And according to Reuters, 1,000 of the items, including some cutlery and stuffed toys, will be priced at less than 200 rupees ($2.91).
IKEA isn't just scaling back on prices. Known for its huge warehouse-style stores, the retailer is in the early stages of moving globally toward smaller, inner-city showrooms. The initial plan for India was to open 25 traditional stores by 2025, but the country will now get some of the smaller outlets.
IKEA India Finance Chief Preet Dhupar revealed that in Mumbai, where the next traditional store is planned for summer 2019, a city-center format could open in the same year. And in Bengaluru, the first traditional store, planned for 2020, could be preceded by a city-center format.
And although the company has said it could take years to reach major profits in India, a higher number of locally sourced goods will help eliminate high import costs. In fact, regulation states that IKEA must source at least 30 percent of materials locally within five years of starting operations – and it already sources about a fifth of its global supplies from India.
“This is the moment of truth,” Juvencio Maeztu, IKEA’s deputy chief executive, has said. “India is an opportunity to make the next 75 years of IKEA.”