Swedish furnishing brand IKEA, which recently launched its first small-format store in Mumbai, has at least 1,500 to 2,000 products that are locally sourced. These total up to 20-25 per cent of the total sales at IKEA India, according to Per Hornell, Expansion Manager, IKEA India.

Speaking to BusinessLine , Per talks about the company’s goals for the coming fiscal, competition, its omni-channel approach, and the supply chain crunch.

What is your goal for IKEA for the coming fiscal?

Our ambition as a brand is to be accessible to 200 million customers by 2025. By 2030, we want to be accessible to 500 million customers. The only way to do this is to have an omni-channel approach to have a more robust online market penetration.

We are working with an omni-channel approach. Our expansion plan is people-oriented. We want to be where people are and that has got to do with physical and online locations. It should be convenient for people in terms of planning, assembling and delivering. We want to be at locations where we see our target audience. We want to be in every digital space where the customers are.

How many cities will you have to tap on to reach your goal?

We have an omni-channel presence in Hyderabad and Mumbai. We have launched e-commerce in Pune and Bangalore. We are about to open two stores in Bangalore. Then there are places where we have a digital-only presence. In those cities, we are developing our digital experience and strengthening our logistics segment to give a seamless experience to our customers. When we feel that IKEA has reached its mark in these cities, we will start looking at expanding State-by-State.

Has the average ticket size gone up?

It has gone up. There are multiple aspects. We are gaining trust as a brand. Our products are well designed, functional, durable and cost-friendly. That means that we are acquiring more customers. During the pandemic, the focus on home became even more important. Many consumers have been focusing on building a workstation at home. This has been one of the reasons for the increase. There have also been positive economical developments for many consumers that, over time, have led to a higher ticket size. Overall sales have gone up.

Mukesh Ambani-led Reliance has acquired Urban Ladder. Does this increase competition for IKEA?

Anyone entering the furniture space is good for the overall market. They come with experience and ambition which means that home furnishing will be higher on the agenda for customers and that creates an interest that will create a spillover effect on IKEA. So we think it is a positive change. It also means that we are now showing our better side.

How high up is India in IKEA’s top priority markets?

We entered India very recently. There are other markets that hold a large share for Ingka (IKEA holding group) globally. When it comes to expansion, however, India is a priority. From a 2030 perspective, it is in our top ten markets because we are presuming that by 2030, India will have a large home furnishing market and hence, a better appetite.

Do supply chain issues from China persist?

It does. We are facing issues regarding availability and containers like all other players. We are working hard to manage that. We are trying to provide a robust range so that our customers have enough to choose from.

What are your goals for IKEA India for 2022?

While we do not give out numbers for our goals, what we are looking at is at least opening up a few more IKEA stores so that we can reach out to most customers. 2022 will be a very strong growth year for IKEA India.

What is your local sourcing currently?

In our range, we have at least 1,500 to 2000 products locally sourced and it represents at least 20-25 per cent of IKEA India’s total sales.

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