IKEA plans 'paisa vasool' debut

Experience store to be launched in Hyderabad today, 200 to 300 products will cost less than Rs 200

Exactly five years and five months after IKEA decided to invest around Rs 10,500 crore in the India market, the 35-billion euros Swedish furnishing major is ready for launch in Hyderabad with its range of Stenlille rugs to Kivik sofas, Kvistbro storage tables to Poang armchairs, and all the rest that’s sold across its 403 stores in 51 countries.

Hyderabad is the first Indian city – and India the 52nd country – to get IKEA, the largest foreign investor in the country’s single-brand retail sector so far. Serbia was the last new market for the group.          

A day before the mega launch of Hej Home, an experience centre and a miniature version of IKEA’s signature store, John Achillea, managing director, IKEA Telangana, told Business Standard that now India would be the lowest priced market for the group. Till now, it was Poland.

 While giving a guided tour of the first IKEA in India, Achillea said 200 to 300 products to be sold in the country would cost less than Rs 200. Though the final prices are still to be decided, the range will vary from Rs 50 to a few lakhs.  

The innovations for the store are based on more than 1,000 inputs from across the country. The idea should also be “paisa vasool’’, according to Achillea, who has been with the group for 21 years (from Wembley to New York to St Louis).  

The first glimpse of IKEA in the country is a display of a 786-sq ft home with a family of four — typically meant for young parents, who are perhaps IT professionals, and their two children. Storage space and functionality define its designs — whether it is in the living room or bedroom, kitchen or hallway or bathroom. Wooden chairs hanging on the wall (Terje) to laptop holders inside a coffee table, design-it-yourself cupboards to almirahs to both showcase and hide things, and steps that double up as side tables.

As teams, which have gathered here from around the world, get on with their drills to set up the store perfectly, a job notice at the IKEA entrance stands out, attracting curious onlookers. “Now hiring for sales, cashier, logistics, restaurant, furniture assemblers…,” the company has announced while giving out the finer details of the employment terms.   

Achillea said Indian consumers could now see and play around with IKEA products at the experience centre inside a popular mall at the city’s happening Hitec City, so that when the 13-acre store at Gachibowli, a few minutes’ drive from Hej Home, is launched in the Spring of 2018, the city knows what to expect. Buying has to wait till then.    

Meanwhile, marketing has hit its peak with hundreds of blue-and-yellow hoardings spread across the city from the airport to Banjara Hills, Hitec City and beyond. Direct mailers will follow soon. The target is to get as many as 8 million visitors to the Hyderabad store in a year, and the group wants to sign up at least 100,000 members at the experience centre before the big store opens. 

Hej Home is only for about six months, till the big store comes in. A relatively new concept, Hej Home has been tried only in three countries before India —South Korea, China and Japan. In all, the subsequent store launches in India (Mumbai, Bengaluru, Gurgaon over the coming years), the miniature concept will be repeated.   

At the store site, with around 1,000 people involved in the construction work, time-lapse videos and cameras from atop buildings are capturing the sequence of construction minute by minute. Among other structures, even the 1000-seater restaurant that will serve Indian versions of meatballs along with biryani is about to get the panelling done. The architect laughed while handing out safety jackets and helmets to be worn at the site. “Till I joined IKEA, I knew of it only from the catalogues in architect firms. Now I know what it’s all about.’’ 

  

While a vibrant local furniture market may give good competition to IKEA in Hyderabad, executives spoke about “working together with the locals rather than wanting to dominate the market’’. As of now, of the 7,500 products that will be sold in India, only about three to four per cent is being sourced from the country, making up Euro 315 million annually. There are plans of growing production in India, but for now China, Poland, Sweden, and Russia are the big sourcing countries. 

Furniture maker's expanding market