IKEA in India

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HORSES FOR COURSES: ARE ADAPTIVE MARKETING

STRATEGIES GOING TO WORK FOR IKEA IN INDIA?
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“India is a vibrant, multi-cultural, multi-faceted and a really exciting market for

IKEA. People are warm, hospitable and ready to experiment with their home
and surroundings. They want to have a good lifestyle and that is evident from
the passion they display in the way they work and live.”1
– Peter Betzel, CEO, IKEA India
There was a zephyr of excitement and eagerness in Silpa Gram Craft Village of Diamond Hills, located in
Telangana’s capital city of Hyderabad. Widely dubbed as ‘HITEC City’, Hyderabad’s state-of-the-art IT,
Engineering, Health Informatics and Bioinformatics hub, is located around 15 kilometres to the north of
the old city. It also became home to the newly established retail store of IKEA, the Sweden-based global
home-furnishing giant, whose opening has long been a much-awaited event for consumers in India. IKEA
1
V Rishi Kumar, “Peter Bezel to head IKEA India”, https://www.thehindubusinessline.com/companies/peter-betzel-appointed-
ikea-indias-new-ceo/article23065775.ece, March 12th 2018
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MKTG-1-0077 | Horses for Courses: Are Adaptive Marketing Strategies Going to Work for IKEA in India?
entires to indian market

had also proclaimed its ambitious plan to launch 25 stores across multiple cities in India, such as Pune, Surat,
Ahmedabad, Chennai and Kolkata by 2025.2
To this end, the Swedish behemoth had pumped in a massive investment of INR10,500 crore ($1.54 billion).3
As last-minute construction and finishing touches were being applied round the clock, IKEA was geared up to
formally inaugurate its first store in HITEC City on August 9th 2018. This Hyderabad store, expected to house
over 7,000 unique offerings, had already borne testimony to a massive investment of INR1,000 crore ($146.51
million).4 Spread over a sprawling 13-acre expanse, IKEA has already begun scouting for prospective
smaller-format stores across the country.5
Interestingly, the store will also house a titanic 1,000-seater restaurant6, which will serve not only popular
Indian dishes like Hyderabadi Biryani, Dal Makhani, Indian bread and samosa, but shall give masses a taste of
iconic Swedish dishes, such as Swedish Meatballs and Lingonberry Mousse. It shall be IKEA’s largest restaurant
across its global range of 400 stores.7 At a local conference in 2017, Henrik Osterstrom, the country food
head for IKEA India expressed, “We intend to serve global as well as a local range of food that is sustainably
sourced, of good quality and at affordable prices. We will not serve red meat, will have low sugar in beverages,

and source certified organic produce. There will be something for everyone and the focus is on healthy and

sustainable food and beverages.”8 healthly food
The massive Hyderabad store shall also accommodate a play area for children, to facilitate a blithe and
seamless shopping experience for their parents, coupled with a day-care facility for the children of IKEA
employees. These amenities, albeit fascinating for Indian audiences, had struck a chord with global IKEA
consumers. In many countries, the world’s biggest furniture retailer was often synonymous with a destination
on the city’s outskirts. Consumers have been known to drive long distances, typically to an industrial or
semi-urban belt of a city, as part of their praxis of furniture shopping. People in Hyderabad will have to adapt
to this tradition of destination shopping.
Then again, why would anyone be willing to travel long distances to buy furniture, when it could simply be
made by a local carpenter or purchased from a local furniture dealer? Sreedhar Prasad, Partner and Head of
Consumer Markets and Internet Business at KPMG India, answered, “First is the growth of destination shopping
in India where the family steps out to spend four to six hours over the weekend—people today travel even
ten kilometres to go to a mall of their choice. Second, being a global brand, they could bring in significant
product variety, as well as have products that focus on space and storage needs, something that is not
common in India.”9
2
PTI, “IKEA likely to open India’s first store on July 10”, Economic Times, https://economictimes.indiatimes.com/industry/
services/retail/ikea-likely-to-open-indias-first-store-on-july-10/articleshow/64528639.cms, June 10th 2018 (Accessed Date:
September 12th 2018)
3
PTI, “Ikea to integrate its stores in India with online trade”, Economic Times, https://retail.economictimes.indiatimes.com/
news/home-and-decor/furniture-and-decor/ikea-to-integrate-its-stores-in-india-with-online-trade/54161060, September
8th 2016 (Accessed Date: May 10th 2018)
4
Indo-Asian News Service, “IKEA’s Rs. 1,000 Crore Store In Hyderabad May Open Next Month”, NDTV: Home, https://
www.ndtv.com/hyderabad-news/ikeas-rs-1-000-crore-store-in-hyderabad-may-open-next-month-1850510, May 11th 2018
5
Sengupta R., “IKEA’s first India store opens on Thursday: 5 things to know”, https://timesofindia.indiatimes.com/business/
india-business/ikeas-first-india-store-opens-on-thursday-5-things-to-know/articleshow/65321335.cms, August 10th 2018
(Accessed Date: September 12th 2018)
6
Pant A., “At IKEA Hyderabad’s 1000-Seat Restaurant, Samosas, Biryani And Dal Makhni”, https://www.ndtv.com/india-
news/ikea-in-hitec-hyderabad-with-indias-largest-1-000-seater-restaurant-ikea-bets-big-on-indians-tastebu-1897473,
August 9th 2018 (Accessed Date: September 12th 2018)
7
Bloomberg, “What, no meatballs? How Ikea caters to different global tastes”, https://retail.economictimes.indiatimes.com/
news/home-and-decor/furniture-and-decor/what-no-meatballs-how-ikea-caters-to-different-global-tastes/65331861,
August 9th 2018 (Accessed Date: September 12th 2018)
8
PTI, “Ikea to source locally for in-house restaurant”, The Times of India, https://timesofindia.indiatimes.com/business/
india-business/ikea-to-source-locally-for-in-house-restaurant/articleshow/56892717.cms, January 31st 2017 (Accessed Date:
May 11th 2018)
9
Govind D., ”Ikea to follow three-step retail strategy in India: CEO Juvencio Maeztu”, https://www.livemint.com/Industry/
a8SVLF8lze2g7gfjf4sfKN/Ikea-to-follow-threestep-retail-strategy-in-India-CEO-Juve.html, May 24th 2017 (Accessed Date:
2
May 18th 2018)
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In addition, IKEA was dedicated in its policy to source more products locally. As a direct consequence,
one-seventh of 7,000 IKEA products flaunted in their 9-acre store (built-up area), would be effectively priced
below INR200.10 This was in tune with their global strategy to keep prices affordable for the everyday Indian
consumer. Ulf Smedberg, Marketing Head for IKEA India assured that the upcoming store would have
“something for everyone in the family.”11
However, despite IKEA’s apparent fervour and elation in connection with its upcoming store launch in
Hyderabad, it had been extra careful in dealing with a sensitive Indian market. It entered India in the 1980s to
source products for their global stores12, but it was only in 2018 when the Swedish giant was toiling hard to
establish their first major storefront presence in the country. The glorified entry of IKEA in India was a
manifestation of India’s upgraded ecosystem for foreign investment. For years, the Indian government has
been wrought with bureaucratic feuds. In 2006, IKEA could not see eye to eye with the Indian government’s
policy of permitting only 51% foreign ownership in single-brand retail.13 In 2008, the government, despite
guaranteeing to raise the cap to 100%, failed to amend their policy. These infrastructural and economic
reforms did not meet the expectations of IKEA, which coerced their hasty departure from India. In 2012, there

was a glimmer of sunshine as the foreign investment ceiling in single-brand retail was modified to permit
100% foreign ownership in single-brand retail undertakings.14 IKEA re-entered India with a ratified investment
plan of INR105 billion ($1.53 billion) and a plan to launch 25 autonomous stores across India.15 Group
President and CEO Peter Agnefjall remarked, “Regulations are what regulations are, and we have accepted
them and we will make sure that we will fulfil the requirements set up by the Indian government. Well, I am
happy about the development, which India has taken to enable retailers like us to establish our self in India,
and you have 30% rule for sourcing. We will do whatever of course to fulfil that. We see many opportunities
that will be good for IKEA and good for India.”16

India was one of the last untapped frontiers for global retailers. While the Indian sourcing laws are so
stringent, that it often inhibits expansion in India. For IKEA, to meet its own austere manufacturing and legal
standards raises the bar even higher.
It was a globally accepted fact that IKEA’s simple, yet inimitable marketing strategy was widely appreciated by
global consumers. While the Swedish furniture makers have basked in their success across most nations
where they operate, they have had their fair share of failures as well. Hence, it was important for IKEA to
remember not to change much in India. While the global furnishings giant carries along with it a distinct
flavour of Swedish culture, efforts must be made to ensure that they do not end up adopting an ‘ethnocentric’
orientation in India. This was where IKEA was spot-on when it imbibed a ‘polycentric’ marketing approach,
based on adaptive marketing strategies. The big question was what made IKEA conceive a unique marketing
strategy, combining elements from its own culture while appreciating the uniqueness of the Indian market?
How does the company plan to expand in a tricky Indian market? The next big question: would IKEA gain a
competitive advantage in the long term by adopting such a unique strategy?
10
IANS, “IKEA’s first India store to offer over 7,000 products”, https://retail.economictimes.indiatimes.com/news/home-
and-decor/furniture-and-decor/ikeas-first-india-store-to-offer-over-7000-products/61763887, November 2017 (Accessed
Date: September 12th 2018)
11
Nair A., “After opening experience centre in Hyderabad, this is what IKEA plans for India”, https://yourstory.com/2017/11/
opening-experience-centre-hyderabad-ikea-plans-india/, November 24th 2017 (Accessed Date: May 18 th 2018)
12
Samad S.A. and Purkayastha D., “Business Model and Competitive Strategy of IKEA in India”, IBS Center for Management
Research , 2014
13
Gale J., “Ikea’s long road to India: A timeline”, https://www.livemint.com/Companies/5sWT0nwARLGx1axunZeJmL/Ikeas-
long-road-to-India-A-timeline.html, August 9th 2018 (Accessed Date: September 12th 2018)
14
PTI, “FDI in single brand retail: Full text of government amendments”, https://economictimes.indiatimes.com/news/
economy/policy/fdi-in-single-brand-retail-full-text-of-government-amendments/articleshow/16398618.cms, September
14th 2012 (Accessed Date: September 12th 2018)
15
Sharma K., “Ikea set to invest more than $1.5bn in India and plans 25 stores”, https://asia.nikkei.com/Business/Companies/
Ikea-set-to-invest-more-than-1.5bn-in-India-and-plans-25-stores, August 8th 2018 (Accessed Date: September 12th 2018)
16
PTI, “Local sourcing conditions: IKEA for ‘less detailed regulations’”, Financial Express, https://www.financialexpress.com/
3
industry/local-sourcing-conditions-ikea-for-less-detailed-regulations/282374/, June 12 th 2016 (Accessed Date: May 18 th

2018)
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The Journey of IKEA

The IKEA store has entered into one of the most acclaimed annals of national culture in the global marketplace,
necessitating a critical appreciation of its rich history. The distinctive retail stores manifested in vibrant yellow
and blue colours of the Swedish national flag attest the unyielding ‘Swedophile’ in IKEA. This was reflected
through their global network of 418 stores, which nostalgically boasts of contemporary, avant-garde products
epitomizing their country’s agrarian heritage. Ingvar Feodor Kamprad, the enigmatic billionaire founder of
IKEA, envisioned his company to operate as an archive of Swedish national culture, and not as an orthodox
exporter of quality low-cost furniture. IKEA, an alphabetism that encompasses the initials of the founder’s
name (Ingvar Kamprad), the small family farm where he was raised (Elmtaryd) and the bordering village in the
Swedish province of Småland (Agunnaryd), was pillared on the realization that furniture could also be ‘flat-
packed’. Kamprad, who was 17 at the time, received a small cash reward from his father for securing good
grades in school, despite being dyslexic. He used this money to register IKEA as a crude mail-order business.
He realized that the massive cost of manufacturing furniture at the time was not attributed to the superior
quality of materials used; in fact, substantial costs of shipping and transportation posed as one of the crucial

cost-drivers.
This major pain point led to the birth of IKEA in 1943. IKEA kicked off by selling replicas of his Uncle Ernst’s
kitchen table designs along with a host of household merchandise such as Christmas decorations, picture
frames, fountain pens and bag balms. In the next five years, Kamprad had forayed into the furniture business
and started selling furniture from local manufacturers in the woods close to Kamprad’s house. Every morning,
at ten minutes to seven, his milk van would ferry the ordered goods to the local train station for onward
delivery to his expanding mail-order clientele. Kamprad published an appeal in the national farmers’ paper,
dubbed, ‘To the People of the Countryside’: “You may have noticed that it is not easy to make ends meet.
Why is this? You yourself produce goods of various kinds (milk, grain, potatoes, etc.), and I suppose you do
not receive too much payment for them. No, I’m sure you don’t. And yet everything is so fantastically expensive.
To a great extent, that is due to the middlemen. Compare what you receive for a kilo of pork with what the
shops ask for it… In this price list, we have taken a step in the right direction by offering you goods at the
same price your dealer buys for, in some cases lower.”17
Notwithstanding, IKEA’s fascinating growth soon hit a wall. By 1955, local manufacturers began boycotting
the company for their exceedingly low prices. Compelled to design products in-house, Kamprad, along with
his early employees, articulated a vision to “create a better everyday life for the many people”. In 1956,
Kamprad happened upon one of his early employees, Gillis Lundgren (and later the chief designer) carefully
uncoupling the legs of the Lövet table, with the aim of fitting it into a customer’s vehicle and circumventing
damage during transit. This implanted a path-breaking idea in Kamprad’s artful business mind, which essentially
gave birth to the revolutionary concept of ‘flat-packing’18. A model, now analogous to IKEA sparked a revolution
in the furniture market and “left an indelible imprint on retail and on consumers’ lives.” By offering customers
the autonomy of assembling furniture themselves, as opposed to selling pre-assembled offerings, IKEA would
not only gain from considerable cost-savings in terms of transportation and warehousing but would also
present a more heuristic and economical solution to customers using their own vehicles or even public
transport. This sui generis Do-It-Yourself (DIY) philosophy devised by IKEA coalesced ‘cost leadership’ with
‘differentiation’, thereby creating a ‘blue ocean’.
17
Collins L., “House Perfect”, The Best Business Writing 2012, New York: Columbia University Press, 2012, pages 374-401
18
Sylt C., “Ingvar Kamprad: Leader of the flatpack”, https://www.independent.co.uk/news/people/profiles/ingvar-kamprad-
4
leader-of-the-flatpack-483063.html, February 13rd 2005 (Accessed Date: May 18th 2018)
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There was no looking back for IKEA any longer, as they initiated a mammoth expansion spree outside Sweden,
opening stores in Norway (1963), Denmark (1969), Switzerland (1973) and West Germany (1974).19 Enjoying
snowballing success in such continental European markets, the company expanded to other parts of the
world, such as Japan (1974), Australia, Canada (1975), Hong Kong (1975), Singapore (1978), Spain (1980),
France (1981), Belgium (1984), the United States (1985), the United Kingdom (1987) and Italy (1989).20 Germany
remains IKEA’s biggest market, with 53 stores.21 This was followed by the US with 50 stores.22 In December
2014, the world’s largest IKEA store at 14.6 acres near the Gwangmyeong KTX train station in South Korea.23
The primary focus was to target South Korea’s shrinking households with Korea-based items like super-sized
single beds and in-store kimchi rice.
Today, there are 428 IKEA retail stores across 51 countries24 (Exhibit I). In the financial year ending August
2017, IKEA’s total retail sales amounted to $44.8 billion (excluding consumption tax), which represented a
whopping 23.1% increase over 2016. They also recorded 2.3 billion website visits and 936 million store visits
globally.25 Driven by their vision of “creating a better everyday life for the many people”, IKEA has set its eyes
on India, aiming to build a solid foundation for the next couple of centuries. Patrick Antoni, Deputy Country

Manager at IKEA India, has huge expectations from India. He elaborated, “With a young demography,
organisation and growth of the economy, India is a unique market where IKEA is going out full throttle,
something we have not done before. In other markets, we open one store and see how things progress and
then expand. In India, we will be opening four stores in a short period, we are going omnichannel and we are
building warehouses.”26
Across the world, IKEA was bracing itself for a future where people are constrained in terms of their pockets
as well as living space. Jesper Brodin, the CEO of the company claimed that IKEA was well equipped with a
three-year strategy to stay even with a fast-changing society. The company aimed to focus on a citified
community where people “live in small spaces,” possess “thin wallets” and “little time”. The company was
targeting more stores in city hubs and inner cities to reach out to potential customers more efficaciously. For
instance, in the summer of 2019, consumers in Paris will experience an IKEA store on Boulevard de la Madeleine
near the iconic Madeleine Church, right in the heart of the bustling capital city. However, the store, which
shall expand vertically to cover two floors, shall be spread over a mere 1.2 acres, an exception to their
prevailing concept of positioning Brobdingnagian stores in the suburbs of a city.27
IKEA was among the world’s few leading business houses to embrace the Augmented Reality (AR) revolution.
Collaborating with Apple, the Swedish retail titan was devising an augmented reality application that allows
customers to “visualize what IKEA products would look like in their own homes, before buying the products.”
Essentially, consumers would be able to preview three-dimensional IKEA furniture and allied accessories in
their own homes on a virtual platform, before reaching a purchase decision. Anders Grafström, the Range
19
Venzin M., Building an International Financial Services Firm Building an International Financial Services Firm How
Successful Firms Design and Execute Cross-Border Strategies, Oxford University Press, 2009
20
Albaum G., Duerr E., and Strandskov J., International Marketing and Export Management, 5th edition, New Delhi, India:
Dorling Kindersley India, 2008
21
“List of countries with IKEA stores”, https://en.wikipedia.org/wiki/List_of_countries_with_IKEA_stores, September 13 th
2018 (Accessed Date: September 15th 2018)
22
“IKEA USA Store Locator”, https://www.ikea.com/ms/en_US/local_ stores/, 2018 (Accessed Date: September 15th 2018)
23
Lee J. and Yang K., “In South Korea, IKEA opens biggest store to lure tiny households”, https://www.reuters.com/article/
us-ikea-southkorea-store-idUSKBN0JW0IZ20141218, December 18th 2014 (Accessed Date: May 18th 2018)
24
“IKEA Locations”, https://www.ikea.com/, 2018 (Accessed Date: May 18th 2018)
25
“Ingka Holding B.V. and its Controlled Entities Yearly Summary FY17”, https://www.ikea.com/ms/da_DK/pdf/
yearly_summary/ikea-group-yearly-summery-fy17.pdf, 2017 (Accessed Date: May 18th 2018)
26
Tiwari A. K., “India is a unique market where Ikea will go full throttle: Patrik Antoni”, http://www.dnaindia.com/business/
interview-india-is-a-unique-market-where-ikea-will-go-full-throttle-patrik-antoni-2588843, February 27th 2018 (Accessed
Date: May 18th 2018)
27
The Local France, “Ikea to finally set up shop in central Paris after picking location”, https://www.thelocal.fr/20180417/
5
paris-ikea-to-open-first-store-in-french-capital, April 17th 2018 (Accessed Date: September 15th 2018)
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Communicator for Kitchen & Dining at IKEA, Sweden mentions, “Buying a new kitchen is often a big investment
and we want our customers to feel confident about their purchase. We believe in virtual reality as one of
several tools that will support people in realizing their home furnishing dreams.”28
With a plethora of pioneering experiments in retail, coupled with an array of hi-tech novelties, it seemed clear
that IKEA was looking to make it big, and evolve outside its archetypal concept of out-of-town big boxes.
The IKEA Experience

“Ikea is the biggest playground in the world. So people will come, they will absolutely
come.” 29
– Juvencio Maeztu, Former Country Head, IKEA India
For years, IKEA has been the darling of a global community of ‘do-it-yourself’-ers, who sport a voguish
charm, yet are frugal in their purchases. In fact, very few companies have been able to create such a profound

and exquisite impact on the minds of consumers. This was primarily because IKEA was one of the forerunners
in fostering an immersive experience for customers in their stores. Customers do not just saunter into an
IKEA store to purchase four bizarrely named microwave lids (PRICKIG, which means ‘spotted’ in English).
Shopping in one of the stores was an all-day affair, as customers spend hours snacking, frolicking, shopping
and more importantly, relaxing. Customers have even been caught snogging and napping inside the stores.
Funnily, in April 2015, an IKEA store at Beijing forbade customers from sleeping on furniture displays. To cut
a long story short, the larger-than-life IKEA big-boxes are aesthetically designed to ensure that their customers
have a delightful visit in their all-day event.

A classic IKEA store on the outskirts of a city resembles a colossal rectangular blue box with the letters ‘IKEA’
dyed distinctly in big yellow blocks. The interior of the vortex-like furniture store might appear to be a
perplexing affair for first-time shoppers, but it soon metamorphoses into a magical experience. Interestingly,
shoppers are presented with a map to avoid the feeling of being lost in one of the mazes of departments and
aisles. IKEA’s low prices are pillared on a help-yourself shopping milieu. The IKEA website, in order to ensure
that their customers have a seamless experience in their stores, has listed a set of guidelines on how to shop
at an IKEA store. Customers are required to borrow a catalogue stacked by the entrance unless they have it
pre-downloaded from the website. The store also supplies tape measures, pencils and notepads for customers
to jot down pertinent details about the displayed merchandise.
IKEA stores are clustered into four zones, namely, showroom, market hall, self-serve warehouse and checkout.
A typical IKEA store positions its showroom, resplendent with furniture and faux room layouts, on the second
floor. The checkout and marketplace, encompassing smaller home essentials from rugs and linens to picture
frames and clocks, was usually set on the first floor. Unlike run-of-the-mill furniture stores, IKEA supercentres
are essentially showrooms that exhibit delicate home furnishing inspirations. With 2,195 home decoration
ideas spread out across 33 functional categories such as ‘bedroom’, ‘dining room’, ‘on a budget’ or ‘small
spaces’30, IKEA offers a holistic and riveting experience to all its customers (Exhibit II).
The store also promotes repeat purchase behaviour in a unique manner. Unlike a host of other loyalty
programs, IKEA offers a complimentary ‘IKEA Family Program’, wherein customers can avail coupons, gift
cards and other freebies from time to time.31 Interested customers can register for the program either online
or at designated kiosks inside the store.
28
Petroff A., “Smaller stores and virtual reality: Is this the future of Ikea?”, https://money.cnn.com/2017/06/15/technology/
ikea-small-stores-online-sales/, June 15th 2017 (Accessed Date: September 12th 2018)
29
”Ikea to follow three-step retail strategy in India: CEO Juvencio Maeztu”, op.cit.
30
“IKEA Ideas”, https://www.ikea.com/us/en/ideas/, 2018 (Accessed Date: September 15th 2018)
31
“Member Benefits”, https://www.ikea.com/in/en/ikea-family/member-benefits-pubeb97e101, 2018 (Accessed Date:
6
September 15th 2018)
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In order to tender a carefree shopping environment for families in the ‘Full Nest 1’ or ‘Full Nest 2’ stage of the
family life cycle, IKEA offers a complementary solution, which they call ‘Småland’, named after a historical
province in southern Sweden. ‘Småland’, which literally translates into ‘land of the small’, was a supervised
play zone for kids located near the main entrance of the store. These play areas are equipped with vibrant
furnishings as well as playful toys, exclusively for children. For regular customers, potty-trained kids who are
three to four-and-a-half-feet tall can enjoy an hour of free supervised child-care. This benefit extends to an
hour-and-a-half for IKEA Family members. Nevertheless, liberal parents who seek to involve their children in
the furnishing decisions can avail the strollers obtainable from the entrance.32
IKEA stores are designed as ‘self-serve’ areas. The IKEA philosophy was pillared on the belief that customers
play a substantial role in facilitating IKEA’s mission of furnishing top-quality furniture with superlative design
at affordable prices. This was grounded in their positioning statement: “Your partner in better living. We do
our part; you do yours. Together we save money.”33
Based on the furnishing choices appreciated by customers in the ‘inspiration’ showrooms, they collect the
reasonable flat-packed furnishing paraphernalia from the ‘self-serve’ warehouse, on their way to the checkout.

IKEA staff are deployed at the checkout area to assist customers in loading their purchases on to their

vehicles. Back home, the furniture can be assembled manually by customers, simply by adhering to the
instruction manual. This entire process augments the involvement levels of customers significantly and
stimulates brand patronage.
The IKEA experience cannot be deemed complete without revelling in a delectable taste of Sweden at the
full-service IKEA Restaurant, usually located in the upper level of the store. They also house a cafeteria near
the checkout and serves food-items like pizza and frozen yoghurt, often with a Swedish twist. The full-service
restaurant offers a smorgasbord of culinary dishes. A typical IKEA restaurant, being a promoter of Nordic
tradition, aims to wow customers with its legendary Swedish meatballs or Swedish Gravlax. Interestingly, the
aggregate revenue from IKEA’s food and restaurant business alone raked in $2.08 billion in FY 2017.34 Given
its gargantuan scale of global operations, IKEA definitely has the prowess to establishing itself as a major
global restaurant chain. Yet, it incorporates food in its stores as an integral element of the holistic IKEA
experience.
Even IKEA can Fall Flat

“The prize of getting access to the wallets of the growing middle classes in places
such as India and China is a big one for IKEA. However, it needs to ensure its
southern Swedish values are not compromised to get there.”35
– Richard Milne, Nordic Correspondent, Financial Times
Experts opined that IKEA’s radical business strategy had helped it become the premier furniture manufacturer
and seller across the world. Award-winning analyst for the retailing and home furnishings industry, Warren
Shoulberg affirms, “IKEA has changed retail forever. There is perhaps no other retailer on the planet that has
moved its basic model into so many places with so much success.”36
32
“Småland”, https://www.ikea.com/ms/en_KR/customer-service/smaland.html, 2018 (Accessed Date: May 18th 2018)
33
“Together We Save Money”, https://www.ikea.com/ms/en_US/the_ikea_story/the_ikea_store/the_ikea_concept.html, 2018
(Accessed Date: May 18th 2018)
34
“Ingka Holding B.V. and its Controlled Entities Yearly Summary FY17”, op. cit.
35
Milne R., “Ikea faces cultural challenge as flat-pack empire expands”, https://www.cnbc.com/2013/11/28/ikea-faces-
cultural-challenge-as-flat-pack-empire-expands.html, November 28th 2013 (Accessed Date: May 18 th 2018)
36
Lutz A., “Ikea’s Strategy For Becoming The World’s Most Successful Retailer”, https://www.businessinsider.in/Ikeas-
Strategy-For-Becoming-The-Worlds-Most-Successful-Retailer/articleshow/45904642.cms, January 16th 2015 (Accessed Date:
7
May 18th 2018)
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Yet, as the saying goes, There is no success without failure and losses. IKEA too experienced its own share of
failure, during their international expansion into the Japanese market in 1974. Japan was IKEA’s first entry
into an Asian country. The blatant error that IKEA committed was paralleling Japanese culture to European
culture. The Swedish furniture behemoth failed to appreciate the distinctions in culture, lifestyle and consumer
behaviour, upon their entry into Japan.
As economic advancement in Japan gained international traction in the early 1970s, IKEA, backed by resounding
success in each of its previous markets, decided to foray into the Asian country by launching a franchising
deal with a domestic partner. Unfortunately, it failed to make an impact on Japanese consumers and coerced
their withdrawal in 1986. When IKEA entered Japan, they were not merely selling furniture and home accessories,
but a cornucopia of Swedish culture and heritage. Their deep-rooted corporate philosophies were a testimony
of how things were done and how consumers behaved in Sweden. When they sought to superimpose Swedish
values over their Japanese equivalent, it was immediately rejected by Japanese consumer groups.
IKEA, in its hurry to enter an emerging Japanese market, failed to realize that Japanese customers were not
prepared for their signature concept of ‘flat-packing’ and ‘DIY’. More importantly, the nature of competition

prevailing in Japanese markets was markedly different from competition in American or European markets. It

was almost imperative that international companies spend significant amounts of time to fathom the prevailing
culture and the degree of competition in major Asian markets, which usually tends to be quite intense.
Commenting on the failure, Tommy Kullberg, former Head of IKEA Japan, said, “We just were not ready to
handle the very demanding Japanese market, and the Japanese customer was not ready for IKEA, and to
drive things home and put it together themselves. It was a failure, no doubt about it.”37
In an interview, Anders Wallin, the former VP of Group Communications at Sandvik, another Swedish-based
engineering corporation, made an interesting observation about Japanese customers, and said, “The real
problem has been that Japanese people traditionally think of foreign companies as less competitive; foreign
companies lack in quality, service, accountability and much more compared to Japanese companies.”38
Nonetheless, IKEA rectified its earlier mistakes and upon its re-entry into the Japanese market in 2006, held
a far better discernment of the Japanese consumer. Kullberg acknowledged that IKEA had “visited hundreds
of homes and had really gone through in detail how the Japanese live, how they cook, how they sleep.”39
They came to grips with the fact that small-space living was one of the keys to succeeding in the Japanese
home furnishings market, which became a major trait in their stores across the country.
Additionally, IKEA launched a unique program called the Young Potentials Project (YPP), where budding
minds were entrusted with the responsibility of brainstorming ideas to reposition IKEA in Japan successfully.40
Around 75% of the 10,000 products offered by IKEA globally was offered in Japan.41 Outsized sofas, beds and
tables, which were well liked in Europe and North America, were jettisoned from their trademark blue-and-
yellow stores because they would not match the décor of a traditional Japanese home. IKEA made further
arrangements for smooth home delivery and assistance in assembling the furniture. This was also done
keeping in mind the working hours in Japan. Elen Lewis, a British Journalist and author of the book Great
IKEA! A Brand for All the People sums it up perfectly: “If they can crack the whole service concept ... so that
there is less work for Japanese shoppers, then I think they have a better chance to succeed this time.”42
37
Karen M., “IKEA Tries to Furnish Japan, Again”, http://www.washingtonpost.com/wp-dyn/content/article/2006/04/23/
AR2006042300606_pf.html, April 23rd 2006 (Accessed Date: May 18th 2018)
38
Östlund J. and Eriksson F., “Lost in Translation? Swedish companies in Japan”, Master’s thesis, University of Gothenburg,
Sweden, 2012, pages 1-66
39
“IKEA Tries to Furnish Japan, Again”, op.cit.
40
IKEA Business Solutions, “IKEA Global Young Potentials Programme - Project Leader”, www.youtube.com/
watch?v=6moA6rTYj4E, January 25th 2018
41
Associated Press, “Crowds flock to IKEA megastore in Japan”, http://www.nbcnews.com/id/12465601/ns/business-
world_business/t/crowds-flock-ikea-megastore-japan/, April 24th 2006 (Accessed Date: September 15th 2018)
8
42
“IKEA Tries to Furnish Japan, Again”, op.cit.
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IKEA, in its first stint in Japan, learnt the hard way that their formula does not fit every culture. Yet, upon their
entry in North America in 1985, they again made the blunder of bypassing the prevalent culture of the US.43
They faced a torrid time in the US markets initially as well, despite opening 26 stores from 1985 to 1996.44
Much like in Japan, IKEA made the blunder of bypassing the prevalent culture of North America. US consumers
were left disgruntled when they came across relatively small furniture kits and other household supplies in
IKEA stores. Swedish beds were around five inches narrower than the ones US consumers were accustomed
to sleeping in. Moreover, IKEA’s kitchen cupboards were too slender for the large dinner plates used by
American consumers and the Swedish-sized curtains were too small for US windows. In another amusing
incident, company executives at IKEA were taken aback by the large number of vases that were being sold in
the US. It came as a shocker to them when they learnt that these European-design vases were being purchased
not to plant flowers, but to drink from them. As it turned out, the small size of the vases confused American
consumers, who mistook them for drinking glasses.
IKEA finally realized that consumers in every culture are unique and this made them realize that their global
strategy should be adaptable enough to respond to changes in domestic markets. The Swedish multinational

adopted a balanced strategic approach, which was flexible enough to cater to local issues. It was only in the
1990s that IKEA finally tasted success in the US markets, due to its large-scale customization, which rocketed
their sales from $480 million in the 1990-94 period to $900 million in 1997.45
In 2012, IKEA faced severe criticism for airbrushing the images of women from the Saudi version of their
furniture catalogue, displaying the company’s home furnishings. The picture highlighted a pyjama-clad mother-
son duo apparently preparing for bedtime. While the young boy was seen, brushing his teeth in the bathroom,
his mother apparently was airbrushed from the Saudi version of the catalogue. This incident made people in
Sweden question IKEA’s commitment to gender equality, with Nyamko Sabuni, former Minister for Gender
Equality in Sweden stating, “For IKEA to remove an important part of Sweden’s image and an important part
of its values in a country that more than any other needs to know about Ikea’s principles and values — that
is completely wrong.” 46
The Swedish multinational was forced to undertake safety measures in the appropriate presentation of future
content from a value-based perspective in all the versions of their global catalogues. They further released a
formal apology averring that they “should have reacted and realized that excluding women from the Saudi
Arabian version of the catalogue is in conflict with the IKEA Group values.”47
In 2013, French prosecutors levelled charges of corporate espionage on a couple of top IKEA executives.48 It
was alleged that the executives had illicitly acquired police records of their employees to verify the possibility
of untrustworthy backgrounds. Although it does not appear to be a dreadful affair, many people claim that
IKEA might have hired the private eyes to keep an eye on aggrieved customers.
It was important for us to peruse the failures of Swedish retail behemoth, as it is clear that despite their
apparent successes, IKEA is far from adapting their corporate culture to national norms. This is evident in
their past failures. However, they have come a long way since their erstwhile controversies and cultural gaffes
and would seek to adapt to a delicate Indian market, rather than attempt to change it.
43
Chu V., Girdhar A. and Sood R., “Couching Tiger tames the dragon”, https://www.businesstoday.in/magazine/lbs-case-
study/how-ikea-adapted-its-strategies-to-expand-in-china/story/196322.html, July 21 st 2013 (Accessed Date: April 29 th
2018)
44
Wile R., “Does IKEA Have A Problem Expanding In The US?”, https://www.businessinsider.com/does-ikea-have-a-problem-
expanding-in-the-us-2012-1+&cd=10&hl=en&ct=cln k&gl=in, January 20 th 2012 (Accessed Date: September 15 th 2018)
45
Frynas J. G. and Mellahi K., Global Strategic Management, 3rd edition, United Kingdom: Oxford University Press, 2011
46
Quinn B., “Ikea apologises over removal of women from Saudi Arabia catalogue”, https://www.theguardian.com/world/
2012/oct/02/ikea-apologises-removing-women-saudi-arabia-catalogue, October 2nd 2012 (Accessed Date: May 18th 2018)
47
Ibid.
48
RFI, “French prosecutors push for Ikea spying trial”, http://en.rfi.fr/france/20180111-French-prosecutors-push-Ikea-spying-
9
trial, January 11th 2011 (Accessed Date: May 18th 2018)
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Probing into the Indian Home Furnishings Market

“Expansion and developments in real estate industry, have supplemented the growth
of world home décor market. Globalisation facilitates easier and wider availability
of home décor products and designs for consumers.” 49
– Retesh Sharma, Owner and Principal Designer, Zynna
The increased desire for a residential real estate in India over the past few decades, coupled with a finer taste
for chic interiors among homeowners has catalysed the expansion of the home décor market. The
home-furnishing market in India is represented by a concoction of three interwoven categories, namely home
furnishings, furniture and décor. Furniture has always been an integral constituent of the Indian home and this
segment makes the greatest contribution in the overall market with a collection of slight furniture such as
chairs, tables, cabinets or desks generating the lion’s share of business for the category. Outsized furniture
products such as beds, sofa sets, dining furniture sets, large wardrobes and cupboards are high-value objects,
which warrant elevated investments.

In 2015, India’s furniture market was valued at $17.9 billion (INR121,424.7 crore). It is projected to grow in
worth to $27 billion by 2022 (Exhibit III). Although India is the 14th largest furniture market in the world, it is
hugely fragmented and unorganised. Consequently, precise data is difficult to exact. The online home and
furniture market, which merely represents INR750 crore ($110.6 million) of this unorganized furniture market,
has seen significant growth in India. In 2017, it had grown to represent about $1 billion (INR6,783.5 crore) and
is expected to grow at annual rate of 36%.50 Consumers in metro cities, as well as Tier 1 and Tier 2 cities, are
increasingly opting for online purchase of furniture and furnishings. This is fuelled by factors such as wide-
ranging variety, availability of greater discounts, and potential after-sales service. Some of the prominent
players who have made it big in the online furniture business are FabFurnish, Pepperfry and Urban Ladder.
The rapid growth has also prompted Snapdeal to enter the category. In 2018, Flipkart claimed that its furniture
division, which they had relaunched in September 2017 as a private label brand, ‘Perfect Home’, has a 30%
market share in the online purchase of furniture.51 The market share of small furniture is thrice that of large
furniture, which currently holds a share of 25% in the market.52 This growth saga has been a major signal of
reliance for IKEA to establish India as the global manufacturing hub for its sui generis furniture and sofas.
As opposed to furniture, home furnishings in India has the least sectoral contribution of the lowest share of
26%.53 The segment is fragmented into subdivisions comprising of bed-linen, towels and robes, kitchen linen,
curtains, upholstery, blankets, rugs and carpets, of which, bed-linen occupies close to half of the total market.
Nevertheless, the faster-growing sub-segments are curtains, upholstery, blankets, rugs and carpets, which
are propelled by surging demand for elegant and contemporary home furnishing products from residential,
healthcare, hospitality as well as commercial sectors. There is undoubtedly a mounting demand for carpets,
bedsheets and curtains. By 2018, the home furnishing market is projected to grow at a CAGR of 8%. Curtains
and upholstery are estimated to grow at a CAGR of 8%, while rugs and carpets are expected to grow at a
CAGR of 9.4%. The premium home furnishing market pegged at INR5,000 crore ($736.8 million) is witnessing
a phenomenal growth, courtesy of a flurry of luxury brands.54 Moreover, with greater levels of disposable
income in the hands of the Indian middle class, home furnishings are no longer perceived as a ‘luxury’ and
49
Saini S., “India home furnishing market prospects and opportunities”, https://www.indiaretailing.com/2017/05/01/retail/
india-home-furnishing-market-prospects-and-opportunities/, May 1st 2017 (Accessed Date: May 18 th 2018)
50
IANS, “Indian furniture market huge opportunity for Asia: HKTDC”, The Economic Times , https://
retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/indian-furniture-market-huge-
opportunity-for-asia-hktdc/61126528, October 18th 2017 (Accessed Date: May 18 th 2018)
51
Bansal V., “Flipkart bullish on selling furniture online”, The Economic Times , https://economictimes.indiatimes.com/
industry/services/retail/flipkart-bullish-on-selling-furniture-online/articleshow/64262483.cms, May 21st 2018 (Accessed
52
“India home furnishing market prospects and opportunities”, op.cit.
53
Ibid.
10
54
Ibid.
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are gradually growing into a household necessity. Ramachandra Shastry, Founder-Director of Bengaluru-
based Revolucion Textile Pvt Ltd. & Ascent Décor Pvt Ltd. observed, “Curtains, cushions, smaller pieces of
home décor can be changed to bring in festivity along with each season. These factors are all leading to a
growth and boom in the home furnishing sector and creating a very strong future for the same.”55
Industry experts claim that the luxury home décor market is expanding at a steady 15% to 20% annually56, so
much so, that it has even wooed consumers from smaller towns to shop for them. More importantly, home
décor is not merely confined to homes. It has grown to encompass office designs, hotels, cafes, restaurants
as well as airports. The online home décor market in India is pegged to grow at a CAGR of 50.42% in revenue
over the period 2014-2019. The retail presence of home décor and furnishing brands are more entrenched
in the southern and western zones of India.57
Yet, despite its growth, the furniture and home décor market has been rather myopic and needs to embrace
a revamped perspective towards innovations and experiments in the sector. Faulty distribution networks and
retail infrastructure have further crippled the growth potential of the industry. Qualms about quality continue
to be a major botheration for consumers, who seek high levels of innovation at markdown prices to derive

maximum value. Rajesh Jain, Business Head of the Mumbai-based home goods store, iHomez, suggested,

“Retailers need to identify the segment, target and position themselves to address consumer needs. For
example, what would sell in South India would not sell in North India, especially in the home furnishing
industry.”58
Increased penetration of organised retail, coupled with advantageous demographics and growing income
levels would propel demand in the home furnishings market. Ubiquitous home automation, which has long
been deemed as a billionaire’s toy, has percolated to even middle-class homeowners. They often hire
third-party operators who offer comprehensive solutions to automate their houses, while customising it to
individual requirements and specific budgets. India is also experiencing a growth in the refurbishment market,
which thrives on renovation and enhancement within living or working spaces. Although it results in the sale of
low-value products, the frequency of expenditure is relatively higher. Hence, the furniture, home décor and
home furnishings markets must complement each other, and strive for an optimum balance, which would
considerably drive category sales.
The level of affluence in every region in India explains the variances in their values, attitudes, lifestyles, and
consumption patterns of foreign branded goods.59 For instance, Mumbai, in a study, exhibited individualistic
characteristics and low attitudinal levels towards economizing behaviour. While purchasing foreign branded
products, social attributes such as brand name and latest fashion, were more prominent among consumers
in Bengaluru who exhibited greater levels of collectivistic behaviour than their peers in Mumbai did. Hence,
home-furnishing retailers should not develop ‘copy-and-paste’ brand building strategies all across India.
They need to redouble the ‘localization’ element in their branding strategies, keeping in mind a rich and
diverse India, which warrants special sensitivity to regional tastes and preferences.
The home furnishings market, in 2018, is occupied by certain online players such as Urbanladder, Pepperfry,
FabFurnish, Afydecor and Lekiaan among others, who have efficaciously tapped the Internet wave in India
and have benefitted from the enhanced reach induced by various shopping websites. They further sport an
inherent desire to orient themselves to versatile regional tastes and preferences through digital channels.
55
56
Nair B. and Maheshwari R., “Demonetisation-hit luxury home decor business rebounds to new highs”, https://
economictimes.indiatimes.com/magazines/panache/ demonetisation-hit-luxury-home-decor-business-rebounds-to-new-
highs/articleshow/58424997.cms, April 29th 2017 (Accessed Date: September 15 th 2018)
57
Kumar R., “Gogia Print-O-Grafix goes online for its wall decor business”, http://www.printweek.in/news/gogia-print-
grafix-goes-online-wall-decor-business-11599, November 27th 2015 (Accessed Date: May 18th 2018)
58
Askari F., “Young Indian Consumers are Driving the Home Furnishing Market”, https://smestreet.in/infocus/young-
indian-consumers-are-driving-the-home-furnishing-market/, October 13th 2014 (Accessed Date: May 18th 2018)
59
Jin B. and Son J., “Indian consumers: are they the same across regions?”, International Journal of Emerging Markets, Vol.
11
8 (1), pages 7-23, 2013
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Such stores promote themselves extensively to acquaint customers with novel product lines, categories and
brands. They are timed to encourage purchases during special events and holidays such as Valentine’s Day,
Mother’s Day or Diwali. Such furnishing retailers, lifted by the enormous growth prospects, are increasingly
investing in technologies such as augmented reality to design themed homes.
Cofounded by Ambareesh Murty and Ashish Shah in 2011, Pepperfry is claimed to be the leader of online
furniture in the country and boasts of 21 physical centres across nine cities. In 2014, they established their
first “studio” in Mumbai in 2014.60 The POD of their online marketplace is pillared on ‘differentiation’, because
of which, they offer unique varieties and do not focus on manufacturing huge volumes of stockpile furniture.
Pepperfry’s immediate rival, Urban Ladder, headed by co-founder and COO, Rajiv Srivatsa, was also started
as an e-commerce furniture retailer in 2012. In 2017, the company reported a near 70% increase in their
consolidated revenue.61 Prioritizing on expanding omnichannel retail, they have also launched brick-and-
mortar stores to cater to a broader customer base. They plan to introduce around 20 stores by March 2019
and shall continue to build on virtual reality/augmented reality technology, which they regard as a mainstream
customer-centric implement.62

At the other end of the spectrum, Godrej Interio, the leader in the physical space with a massive network of
250 standalone stores and 800 dealers across 650 cities also hosts its own e-commerce website. Anil Mathur,
COO of Interio Division, Godrej & Boyce, noted, “We are trying to address our customer base by a
multi-brand multi-segment approach. To be able to do this, soon there is going to be a completely new and
experiential offering from the house of Godrej Interio. We are working with both domestic and international
designers.”63
The key lies in reaching out effectively to the Millennials, who represent a significant proportion of India’s
population. Home décor and furnishing retailers are stopping at nothing to leverage the said demography,
known to be highly media-savvy, digitally dynamic and au fait with worldwide trends. Yet, convenience and
affordability play a pivotal role in driving online shopping (Exhibit IV).
Furnishing brands are aggressively utilizing digital marketing strategies to leave a personalized impact on
every customer. Mamtaa Gupta, the founder-owner of the Delhi-based multi-brand retailer, Buzzaria Dukaan,
summed up the growth story perfectly, and said, “The youth has become more sensitive to seasonal and
fashionable home décor ideas. Therefore, retailers are providing products according to the growing demands
for style, quality and newness. The decorative accessories will drive the market ranges through their
trend-led, cost-efficient options for updating the look of a home.”64
The entry of IKEA in India would translate into increased competition for Pepperfry, Urban Ladder and a host
of other furniture retailers in the country. They should all seek to validate their sprouting business models,
especially at a time when the home furnishings industry itself is evolving. While localised and unorganised
retailers may have bossed around for decades in this segment, the entry of IKEA in India with its
cost-leadership strategy would offer strong competition to existing players.
60
“Pepperfry Launches its First Franchise Studio in Bengaluru”, https://businesswireindia.com/news/fulldetails/pepperfry-
launches-its-first-franchise-studio-bengaluru/55359, October 13th 2017 (Accessed Date: May 18th 2018)
61
PTI, “Urban Ladder expects to hit profits by next fiscal year, plans IPO by 2020”, https://www.livemint.com/Companies/
DSkK2cMmRfBU0Cg7wr7zyK/Urban-Ladder-expects-to-hit-profits-by-next-fiscal-year-pla.html, May 20th 2018 (Accessed
Date: September 15th 2018)
62
Anand J., “Urban Ladder FY17 revenue jumps 70%, loss narrows”, https://www.vccircle.com/urban-ladder-fy17-revenue-
jumps-70-loss-narrows/, January 29th 2018 (Accessed Date: May 18th 2018)
63
“Will IKEA Find a Home in India”, http://knowledge.wharton.upenn.edu/article/will-ikea-find-home-india/, October 27th
2017 (Accessed Date: May 18th 2018)
12
64
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IKEA’s ‘Unique’ Marketing Strategy for India

“The IKEA stores will have something for everyone. We work with democratic design,
one that will combine form, functionality, quality, sustainability and low price. Every
IKEA product will have these five components. This is a part of the company’s DNA
as we remain obsessed with low price and this will stand true for India stores as
well.”65
– Patrik Antoni, Deputy Country Manager, IKEA India
It is relevant that we first clarify and underline IKEA’s Unique Perceived Benefit (UPB) and Point of Difference
(POD). This would aid in understanding the unique strategy that it seeks to adopt in India.
IKEA has carved a highly successful business by offering reasonably priced aesthetic furniture to consumers
around the world. Every year, they release over 2,000 new designs.66 This is indeed the output of a robust
marketing strategy, marked by the erudite customer as well as market research. Marcus Engman, the Head of
Design at IKEA explained, “We go and work together with designers from all over the world, but also when

we do design we do it on the factory floor. We work in a very different way to how everyone else is working.
We always – and this is not a cliché – start the product development in people’s homes. I always try to go on
home visits to real people, to find out what are the real needs.”67
These home-visits by IKEA ethnographers allow their top brass to come up with marketing decisions, which
are a reflection of the real-world experiences of people rather than routinized surveys.
An indispensable concept that fuels the design mechanism at IKEA is what they proudly call ‘democratic
design’. Pillared on a pentagonal structure that epitomizes the philosophy ‘everyone has the right to a better
everyday life’, IKEA’s democratic design is sculpted in all their products and steers all of their operations.
Product developers and designers in the company endeavour to find the perfect balance of the five principles,
namely, ‘form’, ‘function’, ‘quality’, ‘sustainability’ and ‘a low price’. This unique challenge sustains the innovative
spirit in IKEA, making it different from other home-furnishing retailers.68
IKEA uses mass-marketing strategies in the best possible manner. They tailor their marketing strategies
exclusively to the preferences of the consumer segment they seek to target. This mono-segment positioning
strategy is strongly appreciated by value-seeking and budget-conscious consumers. In view of that, IKEA
offers a wide-ranging array of furnishing paraphernalia at the lowest costs, crediting its USP.
Over the past few years, content marketing has become increasingly crucial for marketers. IKEA is one of the
celebrated content marketers in the world. The insights about culture, lifestyle and aesthetics gleaned from
scouting people’s homes are shared with their consumers through the effective use of storytelling. Christine
Scoma Whitehawk, Communications Manager for IKEA confirmed, “It gives us the opportunities to start
telling some of our IKEA stories so we can really share with people how IKEA can improve their lives.”69
The IKEA catalogue, a 300-page evangelic typescript, is widely regarded as the IKEA’s biggest weapon, as it
reaches out to over 180 million people in 17 languages across 28 countries. The catalogue, printed in 38
editions, significantly helps the retailer to keep a check on its advertising and promotional costs. IKEA is not
known to be an overtly aggressive marketer, but it has injected the product placement concept effectively in
65
“After opening experience centre in Hyderabad, this is what IKEA plans for India”, op.cit.
66
Boyle R. B., “Ikea Designers Find Inspiration in ‘Home Visits to Real People’”, https://www.curbed.com/2015/2/9/9994148/
ikeas-design-team-frequently-invites-itself-to-peoples-homes, February 9th 2015 (Accessed Date: September 15th 2018)
67
Howarth D., ““IKEA works in a very different way to everyone else” says head of design”, https://www.dezeen.com/2015/
02/09/ikea-design-manager-marcus-engman-interview-product-development-process-cost/, February 9th 2015 (Accessed
68
“IKEA Locations”, op.cit.
69
Walgrove A., “How IKEA Became Kings of Content Marketing”, https://contently.com/strategist/2014/11/07/how-ikea-
13
became-kings-of-content-marketing/, November 7th 2014 (Accessed Date: May 18th 2018)
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movies such as ‘500 Days of Summer’, ‘Fight Club’ as well as television series such as ‘30 Rock: Blind Date’ and
‘Little Britain’. For the past 67 years, IKEA has emphasized on its catalogue, which serves as its product
showcase, design muse and manifesto. The highly awaited catalogue from the 75-year old Swedish
multinational enjoyed a print run of 203 million copies in 2017.70 It is ranked alongside the Bible, the Qur’an,
and Harry Potter as one of the highest distributed books on Earth.
The subtle variations in its catalogues, reflecting cultural differences among consumers, also contributes to
its uniqueness. For instance, kitchens in China tend to be considerably smaller than in the US. Hence, catalogue
designers crop certain elements of a photograph and reposition them in post-production, to demonstrate a
familiar and inviting cooking arena. Jörgen Eghammer, IKEA’s Chief Design Guru exclaimed, “It is not a digital
book or an e-book. It is a bookbook. You can actually feel the pages move as you swipe!”71
At the heart of IKEA’s marketing strategy is the concept of ‘Do-It-Yourself’ (DIY) furniture. Buyers are required
to assemble various pieces of the furniture item on their own, based on the instructions provided in the
manual. Such a ‘flat-packing’ design, sold largely through their exclusive catalogues, is the mantra to IKEA’s
low prices as well as reduced shipment and operational costs. This helps them focus more on vital aspects

such as design and merchandising. Devangshu Dutta, the CEO of chief executive of Gurugram-based retail

consulting firm, Third Eyesight, a retail consultancy explains that those “flat packs work well with young
consumers whose budgets are normally tight.”72
However, in India, consumers are relatively unacquainted with IKEA’s avant-garde concepts and aesthetics.
Indians are not accustomed to purchasing a complete range of pre-assembled furniture from stores. They
also rely heavily on the bountiful cheap labour available in the country for their household services such as
plumbing, electric connections, and housework. In this connection, it is important to note that home-services
start-up UrbanClap has made the journey easier for Indian consumers, given that they can easily hire
professionals for on-demand services such as beauty and grooming, house cleaning and repair, yoga and
fitness, and other miscellaneous services, online. Their operating revenue escalated four times to INR45 crore
($6.6 million) in FY 2017-18 from INR11 crore ($1.6 million) in FY 2016-17.73 Antoni has already expressed his
concerns with DIY in India, and said, “DIY is still a new concept in India and we will invest heavily to provide
affordable and quality services.”74
In May 2018, months before their initial launch in Hyderabad, IKEA came across a way to promote DIY
furniture in India, when they joined hands with UrbanClap to assist shoppers in assembling their furniture.
They have also sought to hire around 150 in-house assemblers to help ease customers’ experience.75
The PODs of IKEA have been widely recognised and deliberated upon for decades. The aforementioned key
points of difference are attributes and benefits offered by IKEA, with which a robust, unique and favourable
association must be formed by consumers in India. These unique product features, when clearly communicated
to consumers in India, would help corroborate IKEA’s USP and gradually build brand loyalty.
70
Weller C., “Ikea’s catalog is as popular as the Bible and the Quran”, https://www.businessinsider.in/Ikeas-catalog-is-as-
popular-as-the-Bible-and-the-Quran/articleshow/59815741.cms, July 29th 2017 (Accessed Date: May 18th 2018)
71
Walgrove A., “Watch IKEA’s Brilliant Parody of Apple’s Product Announcement”, https://contently.com/strategist/2014/
09/09/watch-ikeas-brilliant-parody-of-apples-product-announcement/, September 9th 2014 (Accessed Date: May 18th 2018)
72
Kamath R., “What IKEA brings to the table”, https://www.thirdeyesight.in/articles/what-ikea-brings-to-the-table.htm,
July 13th 2012 (Accessed Date: May 19th 2018)
73
Salman S. H., “UrbanClap revenue grows fourfold to Rs45 crore in FY18”, https://www.livemint.com/Companies/
7cgqNRxtMLlGxyLk52U85I/UrbanClap-revenue-grows-fourfold-to-Rs45-crore-in-FY18.html, May 2nd 2018 (Accessed Date:
May 19th 2018)
74
PTI, “Ikea ties up with UrbanClap for its upcoming Hyderabad store”, https://www.livemint.com/Companies/
PYidfmAW5gqWpJsLWEQQAL/Ikea-ties-up-with-UrbanClap-for-its-upcoming-Hyderabad-store.html, May 24 th 2018
14
75
“UrbanClap revenue grows fourfold to Rs45 crore in FY18”, op.cit.
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Given the degree of fierce competition prevailing in the Indian home furnishings market, and the overwhelming
variety of offerings, it is highly important for IKEA to stand out from the competition, such that they are
better noticed by a majority of consumers, who are yet to be familiar with the IKEA way of furniture shopping.
For this, it is essential that we understand the need and benefits of IKEA, not from the company perspective,
but from the buyer’s perspective. Consumers in India, while being price-sensitive, are zealous of building a
beautiful dream home, replete with modish and branded fittings and accessories. From such a perspective,
Indian consumers would not be hesitant to accept the Scandinavian style of furniture, as long as it is not
thrust upon them. Unlike their rivals, much of IKEA’s promotional strategies are pillared around emotion, a
trait that Indian consumers hold dear. The growth of IKEA is rooted in its simplicity and honesty, which is
manifest in their minimalistic designs. Consumers in India appreciate blended furniture concepts, which is
one of the hallmarks of IKEA. Their simplistic furniture and other home furnishing elements can easily be
blended into an Indian house, which would look different and exude an aesthetic appeal.
To ensure that Indian consumers appreciate the need and value of IKEA furniture in India, they introduced an
experiential centre in Hyderabad in November 2017, dubbed IKEA Hej (Hello) Home, in close proximity to

Hyderabad’s HITEC City.76 Consumers would develop a profound understanding of some of IKEA’s distinctive
home solutions. The Hej Home represents the values and culture of IKEA and offers customers a peek into
what they can expect from one of their big-boxes. The UPB would be clear enough as the Hej Home is
designed, keeping in mind ‘life in a traditional Indian home’. The dazzling room settings such as the bedroom,
living area, kitchen and dining or play area are fitted with various home furnishing ideas and unique designs
of several IKEA products along with their prices. The long-standing relationship between India and Sweden is
also captured in the massive experience centre. Efforts have already been made to stimulate brand loyalty, as
consumers visiting the Hej Home can register for the ‘IKEA Family’ program and can participate in various
events, even before the opening of the store. This exposition was also a networking attempt by IKEA, as they
sought potential future co-workers, especially the women in Hyderabad, in tune with their commitment to
hiring 50% women employees at all levels in India. The Hej Home concept enables consumers to validate the
unique perceived benefits they seek from an IKEA store. Ulf Smedberg assured, “IKEA Hej Home launch in
Hyderabad is a great opportunity to meet the many people who share our passion for home, children, family,
and food and most importantly our strong values of togetherness and love!”77
With a well-established USP, IKEA can gain a competitive advantage in India, for which, it has chalked out a
three-pronged retail strategy. The foremost priority is to establish the brand in India through their large-
format stores. Customers should be au fait with the ‘touch-and-feel’ aspect, when shopping at IKEA. This
would be followed by establishing a solid e-commerce platform in the country. This is a vital move to target
young masses in the country, as established earlier. Finally, IKEA would experiment with new store formats,
once they have achieved success in the large-scale format. Juvencio Maeztu the outgoing CEO of IKEA India
mentioned, “In other parts of the world, you have smaller sized stores, a pop-up store, or different concepts
that we are exploring and trying.”78 The Swedish furniture retail giant has identified 49 cities where it seeks to
establish stores in the brick-and-mortar format.79
In April 2018, IKEA has signed a memorandum of understanding (MoU) with the Gujarat government to raise
its stores in the state with a proposed investment of up to INR3,000 crore ($444.8 million).80 They would
76
Kumar V. R., “IKEA opens first Hej Home in India at Hyderabad”, https://www.thehindubusinessline.com/companies/
ikea-opens-first-hej-home-in-india-at-hyderabad/article9969498.ece, November 22nd 2017 (Accessed Date: May 18th 2018)
77
Ibid.
78
79
“IKEA is now open for business in India: Here’s what it offers”, The Economic Times, https://economictimes.indiatimes.com/
industry/services/retail/ikea-opens-its-first-india-store-tomorrow-heres-what-it-offers/articleshow/65319086.cms, August
10th 2018 (Accessed Date: September 12th 2018)
80
PTI, “IKEA inks MoU with Gujarat to open stores, invest up to Rs 3,000 cr.”, The Times of India , https://
timesofindia.indiatimes.com/business/india-business/ikea-inks-mou-with-gujarat-to-open-stores-invest-up-to-rs-3000-
15
cr/articleshow/63734574.cms, April 12th 2018 (Accessed Date: May 19th 2018)
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prioritize on Ahmedabad and Surat for a start and has already begun its inspection for appropriate real
estate in the long term. David McCausland, the Country Property and Expansion Manager, IKEA India noted,
“Gujarat is a prioritised state for IKEA due to its open progressive policies and positive investment climate.
IKEA will soon set up its retail stores and other touch points in Gujarat to bring good quality and affordable
home furnishings for the many people in Gujarat.”81
In the same month, IKEA expressed their desire to launch two stores and touch points in West Bengal, sized
over 9.2 acres each, for which they would invest around INR2,000 crore ($296.2 million).82 In a letter addressed
to Ms Mamata Banerjee, the Chief Minister of West Bengal, IKEA executives have expressed, “West Bengal is
one of the key markets in IKEA’s plans in India and we would like to start working in your state for establishing
Ikea’s expansion plans. Each Ikea store in your state will be an investment of INR1,000 crore and generating
employment of 800 directly and 1,200 jobs indirectly.”83
IKEA plans to tackle an otherwise tricky Indian market very carefully, In India, and shall sell what it deems fit
for local market requirements. Indian shoppers would thus be exposed to the iconic ‘Klippan sofa’ or a
‘Poäng chair’ along with local dinnerware. More importantly, IKEA is looking to adapt its stores based on the

cities in which it shall operate. The regional differences in consumer behaviour have already been noted

earlier. The average size of a home in Chennai would be markedly different, when compared to a home in
Delhi. The interiors would also be dissimilar. Anil Mathur of Godrej Interio elaborated, “The space availability
at homes in different parts of the country varies a lot. In addition, people’s preferences of material differ. We
see a strong influence of wood and more voluminous furniture in northern India and much more contemporary
designs in the western part. The southern part of the country is even more fragmented in terms of requirements
from minimalistic designs to modular and functional furniture.”84

Such behavioural disparities among consumers in different regions of India would require IKEA to present a
discrete range of products altogether or align them differently in terms of accepted décor and aesthetics. The
Swedish multinational should also look to capitalize on the growth in destination shopping in India. To this
end, IKEA’s scintillating product range would go a long way in alluring shoppers in their stores. More
importantly, food at IKEA would also be a major crowd-puller. IKEA would seek to offer traditional Indian
dishes such as biryani and kebabs. While IKEA is known for its signature meatballs, it would not be able to
serve them in India, given the established religious sentiments of consumers. The last thing they would want
is yet another cultural failure along the lines of MacDonald’s, who faced a torrid time upon their entry in
India. Henrik Osterstrom assures, “The company’s popular meatballs will be on the menu but contain only
chicken.”85
IKEA must also be wary about its shopping layout inside their megastores. Customers have criticized the
complex navigation inside IKEA stores. “You feel like part of the herd grazing through the store” and “The
shop layout is designed to force you to maximize unnecessary browsing” are some of the many vexations
raised by puzzled shoppers. IKEA stores, despite their shortcuts, remain a navigation nightmare to many.
Many customers also claim that IKEA “staff are usually too occupied to answer questions and probably the
staff-consumer ration is small”.86 The checkouts at IKEA are also a major pain point for customers, with
gargantuan crowds at long checkout queues. Customers have also claimed, “Checkouts are an awful experience”
81
“IKEA inks MoU with Gujarat to open stores, invest up to Rs 3,000 cr.”, op.cit.
82
PTI, “Ikea promises up to Rs 2,000cr investments for West Bengal Kolkata”, The Economic Times , https://
retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/ikea-promises-up-to-rs-2000cr-
investments-for-west-bengal-kolkata/63947694, April 28th 2018 (Accessed Date: May 18 th 2018)
83
Ibid.
84
“Will IKEA Find a Home in India”, op.cit.
85
Tandon S., “Ikea has revealed its menu for India—and there are no Swedish meatballs”, https://qz.com/1065430/ikea-
has-revealed-its-menu-for-india-and-there-are-no-swedish-meatballs/, August 30th 2017 (Accessed Date: May 18th 2018)
86
Sampson Lee, “IKEA: Strike for an Effortless Experience is a Wrong Strategy”, https://www.linkedin.com/pulse/stop-
16
trying-eliminate-customers-effort-sampson-lee, March 29th 2017 (Accessed Date: May 18th 2018)
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and “Checkout lines are generally long compared to other stores”.87 Although these are issues, IKEA must
understand the mind-set of Indian shoppers in retail stores. Anuj Puri, the Chairman and Country Head of JLL
India, pointed out, “Today’s consumers are seeking a shopping experience that makes them comfortable,
inspires them to stay longer and, more essentially, persuades them to return.”88
IKEA, as we have observed earlier, is noted for the extensive homework it does before it commences full-
fledged operations. The company has already conducted extensive research on how its products might be
accepted in India, with its ethnographers call in on more than 500 homes across the country. They have also
tested whether their couches and mattresses or kitchens and bathroom accessories can weather typical
Indian conditions such as sweltering heat or humidity. Karen Hopkinson Pflug, Global Head of Quality at IKEA
stated, “It really is about making sure that the dampness and the humidity can’t get into the natural fibre. So
it is about sealing edges, putting feet on the bottom of furniture, putting stronger braces and stronger
shelves on bookcases so they do not bend when it gets very humid and damp.”89
It must be noted that IKEA is not another furniture store, which sells home décor items. It is a seller of
Swedish nostalgia and this heritage is captured in all their stores.

Will IKEA’s Strategy Pay-off?
“It remains to be seen how many Indian customers take to IKEA’s do-it-yourself
model.”90
– Rishikesh T. Krishnan, Director, Indian Institute of Management, Indore (IIM-I)
Indeed, some of IKEA’s key strengths across the world could prove to be a major impediment in its India
foray. In their go-getting efforts to come to terms with the essence of a colossal Indian market, which they
aspire to win around, IKEA must be careful not to lose sight of the factors that define them and give them a
competitive advantage.
When entering a new market, the firm must agree on its approach strategy and to which degree it must
adapt their strategy to the predominant local conditions. IKEA has used a relatively standardized approach in
India. IKEA’s unique business concept of ‘democratic design’, coupled with their penchant for following an
unorthodox route to conducting business operations and cherishing the benefits of their Scandinavian heritage,
IKEA established its USP in the Indian market, thereby differentiating it from the local competition. Following
a standardized approach has helped IKEA reap the benefits of scale economies in production as well as in
distribution, reduced marketing expenditures and parity in brand image. This has been one of the major
reasons, which helped shape IKEA as a global brand with a global image. Interestingly, IKEA despite being
proud ‘Swedophilies’ does not follow a dominant ethnocentric approach in their overseas operations. A key
component of their strategy is to inspire global customers with Swedish family values.
In India, IKEA must not compromise with their existing shopping experience. Their stores are typically positioned
as a daylong family jaunt, where their blue-and-yellow big boxes offer smooth parking, a stimulating shopping
experience, play facilities, a restaurant and cafeteria. It would take a while for consumers to get accustomed
to travelling long distances for a shopping spree. In India, where congested road networks and abysmal
public transport continue to exasperate consumers, they prefer to shop within the confines of the city itself.
IKEA should not expect to exact high-value purchases from commuters using public transport since the issue
87
“IKEA: Strike for an Effortless Experience is a Wrong Strategy”, op.cit.
88
Puri A., “The future of Indian retail - crafting unique consumer experiences”, The Economic Times , https://
retail.economictimes.indiatimes.com/re-tales/the-future-of-indian-retail-crafting-unique-consumer-experiences/1507,
May 18th 2016 (Accessed Date: May 18th 2018)
89
17
90
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of carrying giant furniture blocks in buses and metros would pose as a major botheration. Yet, with the surge
in ridesharing services such as Ola and Uber, this may not appear to be a problem. Alliances with such app-
based cab services would also help in stimulating consumers to visit their supercentres in the outer vicinities
of a city.
IKEA is more of an implementation-exacting enterprise. As it seeks to introduce its existing furniture and
concepts in a new market, the Swedish behemoth must first seek to develop the market. This can be
accomplished by gaining their confidence and through effective customer training. By collaborating with
UrbanClap, IKEA has addressed a major headache of getting customers to embrace the DIY culture. Indian
consumers are largely comfort-seeking individuals; the slightest botheration at the time of assembling furniture
might tantamount to ‘buyer’s remorse’. With doorstep assistance now readily available, consumers can install
the flat packed furniture with ease. More importantly, to conduct seamless business in an unorganized Indian
furniture market, one has to develop a robust back-end supply chain network and make provisions for home
delivery beyond metro cities, such as Tier 2 and Tier 3 cities. Consumers in such small towns would form a
potential target base, given the low prices of IKEA products. One of the areas, which IKEA can play to its

advantage, is its flat-packing concept. Given the challenges of manoeuvring through small lifts and narrow
staircases in Indian residential buildings, flat packed furniture can relatively be easy to transport. However,
Indian cars are relatively smaller and thus the size of the furniture in flat-packed boxes cannot be overly large.
IKEA should rely on a young Indian diaspora, which is ready to embrace change. The Millennial populace of
India is known to adapt to a fast-paced lifestyle, where they change jobs, cities, and houses far more frequently.
They no longer seek discounts, but crave for functional and chic furniture, which is also budget-friendly. This
is where IKEA must seize the opportunity, as these young consumers appear to have limited patience to
accept the ‘tailor-made’ rout and seek to eliminate the stress of obtaining a local carpenter or furniture
maker. Their patience levels are not enough to derive success with a plethora of designs, since they might not
wait for weeks or months, for a sofa or bed to arrive. This is very evident from the growing acceptance of
online furniture in metro cities. Sellers such as UrbanLadder, PepperFry and Furlenco are making a massive
impact on Indian consumers, who were sceptical of renting or procuring furniture online, even a couple of
years back.
Given the skyrocketing demand for smartphone applications and chatbots in India, IKEA can introduce its
existing virtual assistant called ‘Anna’ in Indian markets with immediate effect. The Chabot provides answers
to IKEA products, prices, sizes, delivery, spare-parts, opening hours and a host of other queries. Furthermore,
Anna is also aware about the timings of the nearby IKEA store and can further answer what is being served
for lunch.91 More interestingly, she exhibits emotions to customer like a real human being. For instance, if
Anna were unable to find any product, it would exhibit a genuine display of regret. This concept would
indeed work wonders in a ‘smartphone-crazy’ Indian market.
As claimed by IKEA executives, e-commerce would be the second leg of their India journey, thereby completing
the planned omnichannel mechanism. Yet, they should not go over the top with the online channel. E-
commerce should merely play a supporting role and the company should rely heavily on its popular physical
distribution system. Now Indians, while being price-crazy folks, also tend to be content-crazy. Well-defined,
interesting content on social media channels would help IKEA engage deeply with their customers and
redefine their frontiers across sundry areas such as logistics, design and marketing.
IKEA must be extremely careful of the problem of counterfeiting in India. They must draw lessons from their
experience in Kunming city in southwest China, where a 2.5-acre, four-storeyed Chinese retailer, 11 Furniture,
has aped most of IKEA’s iconic merchandise. The Chinese name of 11 Furniture, ‘Shi Yi Jia Ju’ is similar to
IKEA’s Chinese name, ‘Yi Jia Jia Ju’. The only difference is that unlike IKEA, furniture at 11 Furniture is
91
Wakefield J., “Would you want to talk to a machine?”, http://www.bbc.com/news/technology-36225980, August 4th 2016
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custom-made and not flat-packed.92 This copycat IKEA store is symbolic of a new-fangled wave of forgery,
running rampant across China. In a statement, IKEA China executives stated, “IKEA is one of the biggest home
furnishing companies in the world. Protecting IKEA’s intellectual property rights is crucial.”93
The problem of imitation is a major cause of concern in India as well, which needs to be dealt with meticulously.
So do domestic enterprises have a home advantage over their foreign counterparts in the home furnishings
segment? Conversely, will IKEA be a game-changer with their global reputation and deep pockets? Jagdeep
Kapoor, CEO, Samsika Marketing Consultants, opined, “It is a level playing field. The consumer is going to
look at the benefits the brand brings to them. If a brand is able to meet the aspirational needs of the Indian
consumer, then it does not matter whether it is an Indian brand or a multinational brand for it to be successful.”94
Given the nascence of the organized furniture market in India, there shall be a fair degree of rivalry for both
domestic as well as foreign brands. Indian brands have an added advantage of offering India-centric designs.
In either case, the furniture and home furnishings market in India shall develop significantly in the next
decade.

IKEA should also provide greater autonomy to its subsidiaries so that it can respond effectively to the domestic
business milieu in India. Hence, despite the prevailing global strategy, a specific IKEA subsidiary of say Navi
Mumbai can stock special home décor items during Ganesh Chaturthi. Eventually, to achieve absolute success
in Indian markets, it must position its stores closer to public transport hubs and popular congregations.
IKEA should not focus on profits for the moment. It will have to be patient initially, as its actual journey in
India will commence only after a decade of commencing full-scale operations. IKEA’s plan to develop products
from eco-friendly local materials such as jute, banana fibre, cotton, and bamboo would help establish IKEA as
a sustainable brand in India. Around 50% of their wood is certified by the Forestry Stewardship Council or
from recycled sources. The impact of the ‘Make in India’ initiative of the Indian government will definitely
come into effect, when IKEA sources heavily from India. This is because India imports a voluminous amount
of its furniture requirements from China. Given the present nature of strained relations with China, it will
encourage more domestic distribution and supply of wood. More relevant is the fact that, IKEA might be able
to divert the reliance of Indian consumers on low-cost Chinese furniture towards high-quality branded furniture,
which is largely sourced in the country. The 30% local sourcing mandate, is seemingly a noble one in terms of
intentions but bears the potential of triggering more problems in future for IKEA. More pertinently, only time
will tell whether such local sourcing requirements would eventually aid or weigh down the Indian furnishings
industry.
In myriad ways, IKEA reflects the ideals of its founder, Ingvar Kamprad, who passed away in January 2018.
Kamprad was hailed as a simple and prudent individual who preferred to fly in economy class, drive an old
Volvo car and take the subway to work. IKEA is all about the experience. It is one brand but reaches millions
of hearts and homes. Maeztu summed up, and said, “You bring all your frustrations and anxieties when you
come to the store and leave with inspirations and solutions for your home.”95
IKEA is the world’s largest furniture retailer. Will its adaptive marketing strategies make an impact on Indian
soil? Will IKEA become over-adaptive to deal with a tricky Indian market?
Only time will tell.
92
Lee M., “Chinese retailers hijack the Ikea experience”, https://www.reuters.com/article/us-china-brand-piracy/chinese-
retailers-hijack-the-ikea-experience-idUSTRE77017720110801, August 1st 2011 (Accessed Date: May 19th 2018)
93
Ibid.
94
95
Gupta A., “Is India ready for Ikea?”, https://www.fortuneindia.com/ideas/is-india-ready-for-ikea-/100216, March 24 th
19
2017 (Accessed Date: May 19th 2018)
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Exhibit I: List of IKEA Stores Across the World
Country Year of Entry No. of Stores Country Year of Entry No. of Stores
Germany 1977* 53 Czech Republic 1991 4
United States 1985 45 Israel 2001 4
France 1981 33 Hungary 1990 3
China 1998 24 Malaysia 1996 3
United Kingdom 1987 21 Lithuania 2013 3
Italy 1989 21 Singapore 1978 2
Sweden 1958 20 U.A.E. 1991 2

Spain 1980 20 Thailand 2011 2
Russia 2000 14 South Korea 2014 2
Canada 1975 13 Iceland 1981 1
Netherlands 1978 13 Kuwait 1984 1
Australia 1975 10 Slovakia 1992 1

Poland 1991 10 Romania 2007 1
Switzerland 1973 9 Cyprus 2007 1
Japan 1974; 2006** 9 Ireland 2009 1
Belgium 1984 8 Dominican Republic 2010 1
Norway 1963 7 Bulgaria 2011 1
Austria 1977 7 Macau 2012 1
Finland 1996 6 Egypt 2013 1
Turkey 2005 6 Qatar 2013 1
Denmark 1969 5 Jordan 2014 1
Taiwan 1994 5 Croatia 2014 1
Greece 2001 5 Indonesia 2014 1
Portugal 2004 5 Morocco 2016 1
Hong Kong 1975 4 Serbia 2017 1
Saudi Arabia 1983 4
Total: 51 Countries Total: 428 IKEA Stores
*West Germany before October 1990; **Re-entered Japan after withdrawal in 1986
Source: “IKEA Locations”, https://www.ikea.com/ , 2018 (Accessed Date: September 15th 2018)
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Exhibit II: List of IKEA Categories and Corresponding Product Items
Category Items
Food Fish & seafood; Vegetables & side dishes; Bread & dairy; Beverages; Sauces, jam &
condiments; Pastries, desserts & cookies; Candy, chocolates & snacks; Freezerl bags &
cookbooks
Home electronics Cooktops; Smart lighting; Cords & chargers; Extractor hoods & filters; Dishwashers; Mobile
& tablet accessories; Refrigerators & freezers; Tools & hardware; Microwave ovens;
Speakers; Ranges; Ovens
Kitchen & appliances Ovens; Cooktops; Extractor hoods & filters; Dishwashers; Refrigerators & freezers;
Microwave ovens; SEKTION Kitchen cabinets & fronts; Ranges; SEKTION interior organizers;
Kitchen faucets & sinks; Countertops; Knobs & handles; Kitchen integrated lighting; Wall
storage; Kitchen islands & carts; Step stools & step ladders; Pantry; Modular kitchens
Kitchens Cooktops; Countertops; Dishwashers; Extractor hoods & filters; Kitchen faucets & sinks;

Kitchen integrated lighting; Kitchen islands & carts; Knobs & handles; Microwave ovens;
Modular kitchens; Ovens; Pantry; Ranges; Refrigerators & freezers; SEKTION interior
organizers; SEKTION Kitchen cabinets & fronts; Step stools & step ladders; Tools &
hardware; Wall storage
Outdoor Furniture Outdoor dining furniture; Lounging & relaxing furniture; Outdoor organizing; Outdoor
cushions; Decorative lighting; Umbrellas & wind/sun shields; Outdoor pots & plants;
Outdoor flooring; Grills; Outdoor textiles

Pets Cats; Dogs
Dining Dining tables; Dining chairs; Dining sets; Dining storage; Bar tables & chairs; Stools &
benches; Café furniture; High chairs; Junior chairs
Living room All sofas; Ceiling lights; Fabric sofas; Living room storage system; Rugs; Bookcases; Cushions
& cushions covers; Leather & coated fabric sofas; TV & media furniture; Wall lamps;
Curtain rods & rails; Floor lamps; Shelf units; Sleeper sofas; Cabinets & displa-y cabinets;
Coffee & side tables; Curtains & blinds; Sectionals; Table lamps; Armchairs & chaises;
Blankets & throws; Integrated lighting; Sideboards, buffets & sofa tables; Fabrics & sewing;
Ottomans; Shades, bases & cords; Wall shelves; Spotlights; Storage boxes & baskets;
Extra covers; LED Light bulbs; Extra legs; LED lights; Smart lighting
Bedroom Bedlinen; Ceiling lights; Full, Queen and King beds; Spring mattresses; Wardrobes;
Comforters; Foam & latex mattresses; PAX wardrobe system; Single beds; Wall lamps;
Pillow tops; Pillows; Table lamps; Bedspreads; Daybeds; Floor lamps; Mattress & pillow
protectors; Open clothes & shoe storage system; Beds with storage; Chests of drawers;
Cushions & cushions covers; Shades, bases & cords; Slatted bed bases; Dressing tables;
Loft beds & bunk beds; Mattress bases; Mirrors; Rugs; Spotlights; Bed legs; Bed storage;
Blankets & throws; Integrated lighting; Nightstands; Curtains & blinds; LED Light bulbs;
Clothes organizers; Curtain rods & rails; Headboards; LED lights; Fabrics & sewing; Hooks
& hangers; Smart lighting; Wall shelves
Children’s Children’s beds; Children’s beds 8-12; Cribs; Baby textiles; Children’s mattresses; Children’s
mattresses ; 8-12 ; Children’s textile 8-12; Children’s textiles; Crib mattresses; Baby toys;
Children’s desks & chairs 8-12;; Small furniture; Changing tables & nursing; Children’s
toys; Storage furniture; High chairs; Storage system; Baby tableware; Junior chairs; Toy
storage; Children’s accessories 8-12; Children’s tableware; Children’s lighting 8-12; Safety;
Children’s lighting
Hallway Ceiling lights; Chests of drawers; PAX wardrobe system; Wall lamps; Open clothes & shoe
storage system; Table lamps; Integrated lighting; Shoe, coat & hat racks; Wardrobes;
Shoe cabinets; Smart lighting; Spotlights; Storage boxes & baskets; Floor lamps; Racks &
stands; Clothes organizers; Mirrors; Shades, bases & cords; Hooks & hangers; LED Light
bulbs; Stools & benches; LED lights; Wall shelves
Contd...
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Category Items
Office furniture Desks & computer desks; Wall shelves; Work lamps; LED lights; Office chairs; Storage
cabinets; Table tops & legs; Cable management & accessories; Drawer units; Shades,
bases & cords; Wall lamps; Bins & bags; Bookcases; Floor lamps; Smart lighting; Integrated
lighting; Paper & media organizers; Shelf units; Cabinets & display cabinets; Ceiling lights;
Sideboards, buffets & sofa, tables; Table lamps; Spotlights; LED Light bulbs
Secondary storage Storage boxes & baskets; Storage systems & units; Bins & bags; Open clothes & shoe
storage system; Clothes organizers; Hooks & hangers; Wardrobes; Pantry; Waste sorting;
Racks & stands; Wall shelves; Tools & hardware
Laundry Laundry & cleaning; Open clothes & shoe storage system; Clothes organizers; Hooks &
hangers
Bathroom Sink cabinets; Towels; Bath mats; Bathroom storage; Shower curtains; Sinks; Faucets;
Showers; Bathroom mirrors; Bathroom accessories; Bathroom lighting; Bathrobes &
slippers

Lighting Smart lighting; Ceiling lights; Table lamps; Floor lamps; Work lamps; Shades, bases &
cords; Integrated lighting; Spotlights; Wall lamps; Children’s lighting; LED Light bulbs;
Cords & chargers; LED lights; Decorative lighting; Outdoor lighting; Bathroom lighting;
Children’s lighting 8-12
Decoration Frames & pictures; Candle holders & candles; Plants, plant pots & stands; Vases & bowls;
Decorative accessories; Clocks; Mirrors; Holiday decoration; Paper shop
Small storage Storage boxes & baskets; Paper & media organizers; Hooks & hangers; Bins & bags;
Waste sorting; Clothes organizers; Bathroom accessories; Food storage & organizing;
Wall Storage
Textiles & Rugs Bedlinen; Rugs; Towels; Bath mats; Comforters; Curtains & blinds; Pillows; Shower curtains;
Bathrobes & slippers; Bedspreads; Curtain rods & rails; Fabrics & sewing; Cushions &
cushions covers; Blankets & throws; Kitchen textiles; Table linen; Children’s textiles; Baby
textiles; ; Children’s textile 8-12; Mattress & pillow protectors
Cooking Pots & sauce pans; Food storage & organizing; Frying pans & woks; Bakeware; Cooking
accessories; Kitchen utensils; Knives & chopping boards; Ovenware; Kitchen textiles; Mixing
& measuring tools; Dishwashing accessories
Eating Dinnerware; Glassware & pitchers; Table linen; Napkins & napkin holders; Flatware;
Serveware; Coffee & tea; Baby tableware; Children’s tableware
IKEA FAMILY Bathrobes & slippers; Bicycles & bicycle accessories; Travel bags & backpacks; Books &
products & offers games; Games & leisure; Safety
Summer Cooking & Eating; Decoration; Textiles; Outdoor pots & plants; Decorative lighting; Games
& leisure
Source: “IKEA Products”, https://www.ikea.com/us/en/catalog/ allproducts/, 2018 (Accessed Date: September 15th 2018)
22
ET CASES
518-0154-1
Exhibit III: Growth of Organized Furniture in India from FY2010 to FY2022 (Projected)

Source: “Online Furniture Market in India – Challenges And The Way Forward!”, https://techstory.in/online-furniture-market-
india/, July 21st 2015 (Accessed Date: September 15th 2018)
Exhibit IV: Reasons for Use of E-Commerce for Furniture Shopping
Source: “India’s eCommerce furniture sales jump by 32% in 2017-2018”, https://www.chitrangana.com/Consultant/indias-

ecommerce-furniture-sales-jump-32-2017-2018/, 2018 (Accessed Date: September 15th 2018)
23
ET CASES

IKEA in India

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518-0154-1

4th FLAME International Conference on Research and Teaching Cases,

HORSES FOR COURSES: ARE ADAPTIVE MARKETING

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“India is a vibrant, multi-cultural, multi-faceted and a really exciting market for

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entires to indian market

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May 18th 2018)

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that will be good for IKEA and good for India.”16

industry/local-sourcing-conditions-ikea-for-less-detailed-regulations/282374/, June 12 th 2016 (Accessed Date: May 18 th

The Journey of IKEA

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leader-of-the-flatpack-483063.html, February 13rd 2005 (Accessed Date: May 18th 2018)

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paris-ikea-to-open-first-store-in-french-capital, April 17th 2018 (Accessed Date: September 15th 2018)

The IKEA Experience

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have a delightful visit in their all-day event.

September 15th 2018)

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Even IKEA can Fall Flat

May 18th 2018)

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trial, January 11th 2011 (Accessed Date: May 18th 2018)

Probing into the Indian Home Furnishings Market

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8 (1), pages 7-23, 2013

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IKEA’s ‘Unique’ Marketing Strategy for India

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became-kings-of-content-marketing/, November 7th 2014 (Accessed Date: May 18th 2018)

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cr/articleshow/63734574.cms, April 12th 2018 (Accessed Date: May 19th 2018)

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from minimalistic designs to modular and functional furniture.”84

trying-eliminate-customers-effort-sampson-lee, March 29th 2017 (Accessed Date: May 18th 2018)

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(Accessed Date: May 18th 2018)

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2017 (Accessed Date: May 19th 2018)

Exhibit I: List of IKEA Stores Across the World

Germany 1977* 53 Czech Republic 1991 4

United States 1985 45 Israel 2001 4

France 1981 33 Hungary 1990 3

China 1998 24 Malaysia 1996 3

United Kingdom 1987 21 Lithuania 2013 3

Italy 1989 21 Singapore 1978 2

Sweden 1958 20 U.A.E. 1991 2

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Canada 1975 13 Iceland 1981 1

Netherlands 1978 13 Kuwait 1984 1

Australia 1975 10 Slovakia 1992 1