Soon, residents of Mumbai will not have to travel to Navi Mumbai to shop at IKEA. The Swedish home furnishing retailer has announced that it will be launching a city store format in Kamala Mills in Worli towards the end of 2021. This will be in addition to the Navi Mumbai large-format store it opened in December 2020.
Per Hornell, Market & Expansion Manager, IKEA India told CNBC-TV18 that IKEA will be opening 4-5 more such stores in the city, with the second store set to open in mid-2022. In 2023, it plans to open two more.
The city store format is part of IKEA’s strategy to open smaller spaces within localities, making the store more accessible to a higher number of consumers, and in Maharashtra, is part of its commitment to invest Rs 6,000 crore and creating 6,000 new jobs directly and indirectly.
Globally too, IKEA is opening 50 new smaller-format stores in urban areas around the world as the Swedish furniture retailer experiments with new retail concepts. The Worli store will be the first in India and will be a three-storeyed 80,000 sq ft store, offering a range of over 6,500 home furnishing products. The store will also house an 80-seater IKEA restaurant and allow consumers to avail Click & Collect service as well.
“Consumers will be able to buy our entire range of over 9,000 articles. At the City Store, there will be 6,500 products physically present, out of which 2,200 will be instantly available products that consumers can take back from the store. The difference between the 9,000 and 2,200 will be available digitally to buy in the store and then home delivered,” Hornell added.
The announcement of a new store comes eight months after IKEA opened its second flagship store in India in Navi Mumbai. Despite opening during the pandemic, Hornell says, the store has seen over four lakh visitors since December and over 24 million online visits since 2019. In Mumbai and Maharashtra, Hornell added that in the past eight months, the cooking & eating, home & study and home décor categories saw the most growth.
As part of its plans to improve accessibility, Hornell says the company is also working on lowering the prices of its products even more. It last reduced prices of its top-selling products in August 2020 by 20-30 percent.
The launch of new retail touchpoints is also part of IKEA’s plans to expand through an omnichannel approach through which the company aims to reach 200 million people in India. Earlier this year, the company launched the IKEA shopping app, and since 2019 has expanded its e-commerce presence from Mumbai, Pune and Hyderabad to Ahmedabad, Surat, Vadodra and Bengaluru recently as part of its omnichannel expansion.
However, the expansion into these new markets came with several customer complaints of unavailability of products, and extended delivery timelines.
Acknowledging the issue, Hornell attributed it to a surge in demand that was beyond what IKEA anticipated.
“What we see is the importance of home has grown and so interest in home furnishing and orders coming to IKEA has exceeded our delivery capabilities. So we have seen that we have been extending delivery lead times and going back on delivery dates,” Hornell said.
He added that the company is ensuring it’s in constant dialogue with customers and is also expanding its e-commerce capacity and our last-minute delivery capacity as it gradually scales up in Pune and Bengaluru.
Going by the demand both online and offline, Hornell says IKEA sees immense potential in the Indian market going forward. In addition to its third flagship store that is expected to be opened in Bengaluru next year, IKEA will be extending its city store formats to Bengaluru as well in 2022, Hornell said.