As I struggled to assemble a self-assemble shelf I ordered from Flipkart, frustration overwhelmed me. In that moment, a daunting question arose: Could IKEA ever find success in India, a country where people are unaccustomed to such handy work?
However, I discovered the answer lies in a lesser-known but triumphant strategy called Glocalization. Curious about IKEA’s approach in India, I delved into their market entry strategy. But first, let’s understand what Glocalization entails.
Glocalization is when global brands adapt to foreign countries, considering their social, political, and economic nuances. Over the years, this strategy has propelled certain brands like McDonald’s and Bata to success, while others like Kellogg’s have struggled to find acceptance.
IKEA, the world’s largest furniture retailer based in the Netherlands, founded 77 years ago in Sweden, is renowned worldwide for its affordable and trendy ready-to-assemble furniture. With over 430 stores globally, IKEA recently ventured into India, aiming to tap into its aspirational young population.
Everything about IKEA’s approach in India exemplifies successful Glocalization. From store locations to food menu choices and delivery vehicles, every aspect has been meticulously considered. Let’s explore the aspects they got right with their first store in India.
Factors considered for a successful market entry strategy in India:
1. Store locations: The first store was strategically opened in Hyderabad, known as the IT capital of India, with a sizeable urban population of young, well-earning individuals—the target audience. Since its opening in August 2018, the store has witnessed footfall from over 4 million people. Encouraged by this success, IKEA plans to expand to Mumbai, Bengaluru, and Gurgaon, all chosen wisely based on their respective demographics. The company has also learned from its initial store experience and intends to open smaller stores in these new locations, while bolstering its online presence.
2. Food offerings: IKEA is renowned not only for its furniture but also for its delectable food. The popularity of IKEA’s meatballs is evident, even finding mention in popular TV series like The Big Bang Theory. In India, they adapted to local tastes and religious sensitivities by offering vegetarian and chicken-based meatballs. Additionally, they started by providing Samosas priced at 10 rupees. However, due to an unfortunate incident, they had to temporarily halt the sale of vegetarian biryani and samosas.
3. Furniture assembly: While IKEA sells self-assembly products globally, they understood the Indian mindset and habits. Recognizing the preference for assistance, they allocated approximately 1/6th of their store staff to furniture assembly. They even collaborated with Urban Company, a mobile-based services marketplace, allowing customers to book furniture assembly services. This thoughtful adaptation to Indian social and cultural aspects ensures customers can enjoy the convenience of fully assembled furniture, enhancing the value and status associated with owning an IKEA product.
4. Delivery vehicles: IKEA’s choice of delivery vehicles in India includes solar-powered auto-rickshaws, a common mode of transportation associated with the country. This association helps customers connect with the brand, fostering a relationship. Furthermore, the use of solar-powered vehicles reflects environmental responsibility, a crucial message in a country grappling with severe air pollution.
5. Products and pricing: To avoid appearing as an outsider, IKEA ensured that over 1000 products in India are locally sourced, using materials in line with local preferences. They also created a section for affordable products, catering to the price-sensitive Indian market.
These strategies indicate IKEA’s concerted efforts to adapt and capture the imagination of Indian consumers. The resounding success of the Hyderabad store has bolstered the company’s confidence as it plans to open 25 stores in India by 2025.
In conclusion, IKEA has made promising strides in implementing its market entry strategy in India. Only time will reveal if they can overcome the challenges unique to the Indian market. Best of luck, IKEA! I eagerly anticipate the return of samosas to your menu.
Thoughts compiled by,
Brijesh Kumar Yadav
Instant Advise
India Market Entry Services
New Delhi, India