Ikea rewrites its playbook for India debut
India offers a fast-growing middle class, but the flat-pack furniture group must deal with higher import taxes and cost-conscious consumers used to a very different way of shopping
Hyderabad — Ikea is doing things differently in India, as it opens its first store in the country on Thursday. It must deal with higher taxes on imported goods and woo cost-conscious shoppers unaccustomed to the company’s DIY furniture assembly style. The Swedish furniture retailer is pushing into new countries in South America and Asia as growth slows in its traditional strongholds, including Europe. It is betting on India with its growing middle class, likely aiming to avoid a repeat of the high pricing that initially hit sales in China and Australia. The company, which has flagged import duties in India as a big challenge as it tries to keep prices low, has to source at least 30% of its raw materials locally within five years of operations in the country as per Indian regulation. Ikea already sources about a fifth of its global supplies from India. Nevertheless, Ikea still needed to tweak its playbook. The more than 37,000m² store in the southern Indian city of Hyderabad will off...
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