Ikea urges govt to open its doors wider

Indications are that Ikea is losing its patience, and rightfully so. It has asked the government to reconsider its half-hearted permission to set up Ikea stores in India.

The Swedish furniture giant has told the government that for the entire Ikea concept to work, the company requires to sell all its products, a report in the Economic Times said today.

[caption id=“attachment_565544” align=“alignleft” width=“380”]  Earlier, the government had struck down most of the products that the company wanted to sell through its stores. Reuters[/caption]

Earlier, the government had struck down most of the products that the company wanted to sell through its stores, giving rise to doubt whether the single brand FDI policy was all about selling of single product.

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Positioning itself as a complete home furnishing solutions provider, Ikea stores sell a wide range of products from functional furniture to toys and office stationery.

According to the company’s website, total product range has 10,960 products. Though not all stores showcase the whole product range, there is a core range which remains the same across.

Apart from these products, the stores also house cafes.

But the Indian government has disallowed selling items such as home and office products, textiles, apparel and fabric, electronic items, leather products, toys, books, and lifestyle and travel-related items. The government has also barred setting up Ikea cafes.

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There were doubts whether the company would want to set up stores here at all, as these restrictions went against the business model it follows globally.

As reported by Firstpost earlier, the Indian government’s restrictions would in effect fundamentally change the Ikea experience.

The first thing that would hit a visitor to the store is the size. The furniture is arranged in rooms. For example, a kitchen will have dishes and a study will have stationary, all for sale.

With the government disallowing sale of most of these products and most importantly the cafe, a customer will not get the full Ikea experience.

However, now Ikea seems to be putting its foot down. If the company has gone back to the government asking it to review the restrictions, it does mean that it may also rethink its decision to enter India.

If the company still decides to stay back, that is because the opportunity in India’s $18.5 billion households market, which is growing 10-12 percent annually, is lucrative.