IKEA plans ‘city-stores’, reduced prices in India

World’s largest furniture retailer IKEA said that they will cut product prices in India as it looks to reach more than 200 million customers as well as transform into a more affordable platform. Per Hornell, market and expansion manager at IKEA India said that the lower the prices, the more they are expecting to sell in the country.

In order to cut prices, IKEA will bank on efficient sourcing, and transportation solutions. In some cases, it might take a slight hit on margins too, as mentioned in a report in The Economic Times.

“We are looking at revising some of the prices even further. For Ikea, home furnishing as a category has the opportunity to take a larger share for consumer prices. We must find ways to always make sure that the price becomes as low as possible. The lower the prices we achieve, the more we will sell. We are working intensively with making sure that the furniture part becomes even more affordable,” said Hornell.

Around four dozen products are likely to see a price cut of around 20 per cent.

IKEA is also planning to open its first ‘city-store’ in Mumbai’s Worli area by the end of 2021. Hornell said that Mumbai, Delhi-NCR and Bengaluru are among the priority markets for the furniture giant.

The city store is likely to be a sixth of its regular big-box format stores. Hornell said that city stores are a new retail concept within IKEA globally. They will be able to sell 6,500 products from such stores as compared to 9,000 at their Navi Mumbai store. All of their products will still be available online.

IKEA has large format stores in Navi Mumbai as well as in Hyderabad. These stores are roughly 500,000 sq ft in area and are located mostly in the outskirts of large cities. The city stores are smaller, and in the 50,000-100,000 sq ft range. It is also looking to open similar stores in Bengaluru and Delhi-NCR.

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