Ikea will have different formats across Indian cities: Peter Betzel

Last year in August, Swedish home solutions retailer Ikea made its India store debut in Hyderabad. Offering a completely new shopping experience the store has witnessed over 2.5 million customers already with sales meeting company expectations. Peter Betzel, chief executive officer, Ikea India, in an email interaction with Ashish K Tiwari, shares the company's retailing experience with Indian customers, new learnings, India specific strategies, current and future plans.

Edited excerpts…

Has the response to Hyderabad store met Ikea's expectations?

Hyderabad will always be special to Ikea. We have got a very good response and a lot of love from the people here. We are meeting new customers every day, learning new aspects of shopping behaviours, needs and expectations. Customers are touching and feeling our products, sitting on the sofas, discussing and making decisions together with the family and experiencing all our home furnishing solutions. The overall shopping experience is very new for many customers and we are meeting them in a good way. There has been a good response to Ikea restaurant and the food offer as well. In fact, the Hyderabad restaurant is today the biggest in the Ikea world.

Could you briefly share the new learnings from this store?

We are learning everyday from Hyderabad. We continue to listen to our customers. It has been an exciting journey for the customers to discover and learn how to shop in our store. Indians love food and the Ikea restaurant offering a combination of Indian and Swedish dishes is getting very popular. It is the biggest Ikea restaurant with 1,000 seats. We are learning every day from India to be even more relevant to the society.

How's the market response to your do-it-yourself (DIY) products?

The DIY model is not yet popular in India. We have realised that it is primarily adopted by younger customers and hobbyists. Indians have a high level of service expectations and want us to assemble and deliver the furniture at home, for which we have a strong service offer. We have an in-house team of 150 assemblers and have also tied up with UrbanClap to provide assembly services.

Is there a plan to push DIY products in the market?

It's still a new concept in India so we invite customers for workshops and it is interesting to know that one of the best-selling products in India is a tool-kit. This shows that customers want to test and try DIY. It might be difficult to 'install a kitchen, but people are trying to assemble easier products such as chair, table or lamps. We are hopeful that Indians will embrace DIY model and will find assembling of furniture with family is fun.

Have you started online sales from Hyderabad store?

Not yet. We will start selling online in India sometime this year.

You have also started hiring for the Navi Mumbai store?

Our aim is to reach out to many potential coworkers in Mumbai. We will hire close to 800 coworkers directly for our Navi Mumbai store, across areas like merchandising, store operations, supply chain, assembly services among others. We have started different initiatives to spread awareness about our recruitment drive. For example, we have started 'Jobs on Wheel' and 'Railway Job Centres' in the last few months across Mumbai and have received many applications. The recruitment process is still going on.

When will Turbhe store open? You are also launching a small format store in Kalyan's Metro Junction Mall?

Work is on track so far and we will be able to share exact timeline in the coming months. We will also open small format meeting points in Mumbai. Land parcels have also been acquired in Bangalore and Gurgaon. We will have many different formats across cities and are currently building on the plans.

Will you make any changes to the Navi Mumbai store?

All large format Ikea store are based on the same concept, what changes is our showroom where we demonstrate our specific home furnishings offer for the people of city/ state based on local life at home. About 7,500 inspirational home furnishing products will be on offer, most of which are the global Ikea range and some locally relevant range such as the masala box, idli maker, pressure cooker, tawa etc.

Ikea would like to be accessible to many people and be where our customers are. In the future, we will have a combination of our large format stores and small format stores in the city centres. We will offer many online and offline touch points for customers to be able to shop when and where they want.

What are the top 10 products in terms of sales at the Hyderabad store?

Mattresses, children's articles, cooking accessories, kitchens, textile and lighting are among the very popular ones.

Are customers primarily coming to Ikea for low-priced products?

India keeps us on our toes and pushes our boundaries to deliver good quality, value for money products at affordable price points. And that syncs well with Ikea's ambition and makes us a truly inclusive brand. Customers at our store are buying at all price levels. When people walk in to the store for the first time they pick up accessories and low-cost products and that is a part of customer journey. We sell a three box set for Rs 69 to a kitchen worth Rs 11 lakh! Prices of our attractive range are very competitive and there's always something that everyone can buy. Of the 7,500 products, 1,000 are below Rs 200. We have locally adapted the range to some extent to suit unique Indian needs and created some very unique offers like lunch boxes, storage boxes, pans, printed bed linen, curtains, mats etc. For instance, our king sized bed sheet made in India costs as low as Rs 399. Food, at very affordable prices, is also an important entry point for us.

How is competition responding to Ikea's offerings?

We believe healthy competition is necessary for the development of any business category. Our strength is the home furnishing inspiration and for Ikea it's not about a single product but the combination of multiple products that are functional, best in quality and value for money. Life at home is at the heart of what we do and we trust that it needs all players to come together to bring more interest in home furnishing movement.

Are you facing any challenges dealing with returns? What's your returns policy like?

Ikea has one of the best returns policies. If a customers is not satisfied with the purchase, they can return it within 60 days -- it's 90 days for Ikea family members. The customers get a full refund in the manner they made the payment for the product(s).