Project Title

IKEA: GROWING THE MARKET IN INDIA – AN INTERNATIONAL CASE STUDY

Academic department under which the project should be listed

CCOB - Marketing & Professional Sales

Faculty Sponsor Name

Mona Sinha

N/A

Abstract (300 words maximum)

India is a rapidly growing emerging economy with a $2800 billion GDP and a 1.2 billion population (Trading Economics, 2020). The Indian furniture industry is worth $32.61 B USD with an expected growth rate of 13.38% (India’s Furniture Market, 2019). IKEA is a 77-year old global Swedish furniture manufacturer with a revenue of 41.3B € (O’Connell, 2019) and a presence in 52 countries (Owuor, 2019). IKEA’s key competitive advantages have traditionally been low priced, modern, furniture of high quality and durability. The very first IKEA was set up in India in 2018 (Tandon, 2018), however, face many challenges such as, space constraints for large stores, generating revenue, and cultural concerns. (France-Presse, 2018). Due to space constraints, multi-generational Indian families live in very small homes and so rooms often serve multiple purposes (Agarwal & Bellman, 2018) and Ikea’s furniture needs to cater to such unique needs and lifestyles. Ikea faces strong competitors such as Pepperfry, India’s largest online furniture retailer and presently the top furniture retailer (Bushe & Joshi, 2019). IKEA also faces stiff competition from small mom & pop stores that dominate over 90% of the Indian retail market and offer low priced, custom made furniture. The overhead costs of these stores are less than half that of major retailers and so Ikea cannot use its “low price” positioning in India (Horvat, 2018). This case study examines the many challenges that IKEA faces in India and suggests changes to its marketing mix.

Keywords: IKEA, Sweden, design, furniture retail, international marketing, case study, India, consumer attitudes, emerging markets, pricing

Note: References available on request

Project Type

Poster

This document is currently not available here.

Share

COinS
 

IKEA: GROWING THE MARKET IN INDIA – AN INTERNATIONAL CASE STUDY

India is a rapidly growing emerging economy with a $2800 billion GDP and a 1.2 billion population (Trading Economics, 2020). The Indian furniture industry is worth $32.61 B USD with an expected growth rate of 13.38% (India’s Furniture Market, 2019). IKEA is a 77-year old global Swedish furniture manufacturer with a revenue of 41.3B € (O’Connell, 2019) and a presence in 52 countries (Owuor, 2019). IKEA’s key competitive advantages have traditionally been low priced, modern, furniture of high quality and durability. The very first IKEA was set up in India in 2018 (Tandon, 2018), however, face many challenges such as, space constraints for large stores, generating revenue, and cultural concerns. (France-Presse, 2018). Due to space constraints, multi-generational Indian families live in very small homes and so rooms often serve multiple purposes (Agarwal & Bellman, 2018) and Ikea’s furniture needs to cater to such unique needs and lifestyles. Ikea faces strong competitors such as Pepperfry, India’s largest online furniture retailer and presently the top furniture retailer (Bushe & Joshi, 2019). IKEA also faces stiff competition from small mom & pop stores that dominate over 90% of the Indian retail market and offer low priced, custom made furniture. The overhead costs of these stores are less than half that of major retailers and so Ikea cannot use its “low price” positioning in India (Horvat, 2018). This case study examines the many challenges that IKEA faces in India and suggests changes to its marketing mix.

Keywords: IKEA, Sweden, design, furniture retail, international marketing, case study, India, consumer attitudes, emerging markets, pricing

Note: References available on request