Why IKEA is Betting on India
For regular international travellers, particularly to Europe, IKEA is, quite literally, a household name. The $42-billion Swedish home furnishings giant has been known for its massive stores and trademark furniture style. So it was no surprise that, given India’s booming aspirational economy, the opening of its first store—called the Blue Box because of its look—in Hyderabad in 2018 saw massive crowds eager to see what was on offer. Four years and five stores later, IKEA, which in a sense was testing the Indian waters so far, has decided to amp up its India play. The reasons are not far to seek. With a huge millennial population that is keen to live well, India is a lucrative market for IKEA. Besides, internationally, despite its global presence, the company is still heavily dependent on Western Europe and North America, economies that are stagnating and facing their own set of challenges. India, then, stands out in IKEA’s list of growth options. As IKEA India’s CEO Susanne Pulverer tells Arnab Dutta in our cover story, “It’s a big, big country and we have just started to enter. There is so much to do.”
Indeed, Pulverer and her company now have their aggressive strategy chalked out. Having pumped in close to Rs 10,000 crore so far in India, IKEA is now upping the ante on expansions. And importantly, it has also tweaked its fabled strategy of setting up massive stores outside city confines and is now putting up smaller size stores closer to the customer to ensure footfalls. But as many multinationals have realised to their peril, India is not an easy market to crack. There are several home-grown players—Godrej Interio and start-up Pepperfry just two among them—which will give the Swedish giant tough competition, not to forget the countless mom-and-pop furniture shops dotting Indian cities with their loyal base of customers. IKEA will have to contend with all of this and have to wage a long-drawn battle for leadership in the Indian market.
Elsewhere in this issue, Ashish Rukhaiyar talks to several leading stock market experts and players to put together a story on how they see the markets playing out over the rest of the year. The broad consensus seems to be that while the worst may be behind us, it’s not a rosy picture just yet for the near term. And the reasons are many: inflation, monetary tightening, recessionary trends in the US and Europe, supply chain disruptions—the list is long. The latest findings of the quarterly Business Today Business Confidence Index mirror most of these concerns. After hitting a seven-year high at 55.2 last quarter (on a scale of 100), the BCI fell to 51.2 for the April-June quarter of 2022 as macro concerns weighed heavy on business leaders. But despite the concerns, there’s a lot of hope. As India turns 75, we also bring you a stellar line-up of the country’s top business leaders who tell us their vision for India for the next 25 years. As their views show, there’s much to aim for, and celebrate.
