How Ikea plans to beat competition in India

Ikea customers used to assembling its flat-packed furniture will, if the Swedish firm’s design boss has his way, soon be able to add their own touches to products before buying.

The furniture retailer, which has grown into a global giant from its small-town roots in the heart of southern Sweden, is seeking new markets, with India on its horizon.

Even there Ikea- known for its budget furniture in huge stores - expects to keep to a Scandinavian form characterised by stripped, functional design, Ikea Design Manager Marcus Engman told Reuters.

[caption id=“attachment_503457” align=“alignleft” width=“380”]  " To enter India with Indian designs would place us in a crazy position competition-wise. If we stay Scandinavian and do what we do best we will be unique in the market.“Reuters[/caption]

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“Having customers doing some of the job is nothing new. Historically, that has been about them assembling the products to keep prices low. But I believe in letting them take part also in the creative work,” he said in an interview in Almhult where Ikea was born 69 years ago and where its creative hub still is.

“It would enable them to turn an IKEA product, which will probably always be mass produced, into their own unique thing. I think this will be important for us going forward,” said Engman, sitting on a Klippan couch, which was developed by his father, also a former design chief at IKEA.

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He said customers might make adjustments to a sofa, or create their own fabric patterns via the Ikea website. “We are not that far away technology-wise. What we need to find is a way to do it and still keep our low prices.”

Ikea, whose name includes the initials of founder Ingvar Kamprad combined with the first letters of the farm and village where he grew up, has 338 stores in 40 countries across Europe, North America and Asia.

Kamprad, 86, a billionaire who lives in Switzerland, but who keeps up a thrifty image when he visits his homeland, founded Ikea as a mail order firm when he was only 17 and keeps a role as senior adivisor to the foundations which controls the empire.

EYE ON INDIA

He and his family still control the group through a complex corporate structure, which has been criticised for a lack of transparency.

Ikea was also recently found to have spied on employees in France and is investigating Swedish public television allegations it used political prisoners in the former east Germany in the 1970s and 1980s. In October, it apologised for air brushing women out of catalogues for Saudi Arabia.

Such brushes with controversial issues, including Kamprad’s own involvement with a Swedish fascist group in the 1940s, which he later called a mistake, are not holding the company back.

It is the world’s biggest furniture retailer. Ikea Group, which owns most of the stores, with others under external franchise, plans to speed up expansion after record sales in 2011/12 of 27 billion euros.

The group in May unveiled plans for 25 stores in India, already a big sourcing market its for textiles, and expects the government in the coming months to approve its application to begin trading there. Engman just returned from an inspiration trip to suppliers and design schools in India, he said.

“In the big cities there is fairly widespread awareness that we will open there. There is a curiosity around what we plan to do,” Engman said of his trip, adding that IKEA has no plans make major changes to its range there.

But the company will stick to its traditional designs.

“To enter India with Indian designs would place us in a crazy position competition-wise. If we stay Scandinavian and do what we do best we will be unique in the market.”

From approval, it usually takes Ikea 4-5 years to open a first store in a new market.

Engman is a firm believer in the company’s “democratic design” ethos, mixing functionality, style and value.

“I actually believe that a great part in our success is the fact what we produce is mixable with other styles,” he said.

“And that you get a lot for your money.”

Reuters