IKEA’s pre-launch plans: Setting up pop-up stores in India

Swedish furniture company, IKEA, which has been sourcing from India for the last 28 years, is all set to open its first store in Hyderabad in 2017. But before that, just to give India a taste of what IKEA furniture feels like, the brand will be setting up pop-stores called Hej Homes across the country. Hej Homes (Hej is Swedish for hello), will replicate the essence of IKEA stores worldwide.
“We are very happy to be in India, and have a natural link with the country and its ‘love for home’. With our pop-up exhibitions, Hej Homes, we are all set to provide smart home solutions to the people of India. These exhibition areas will help us communicate with consumers and help them understand what IKEA stands for,” Country Marketing Manager, IKEA India, Ulf Smedberg, told Indiaretailing Bureau in response to an email query.
Smedberg wrote in the email: “The first Hej Homes store will be launched in Hyderbad, the city from where the brand plans to roll out its retail operations. IKEA plans to set up 25 similar stores by 2025, in various Indian cities.”
Mirroring the features offered in global IKEA stores, Hej Homes stores will be set up in places with high footfalls – like malls – to attract the maximum number of consumers.
“Each Hej Homes store will be spread over 4,000- 7,000 sq.ft. of area, will also house a cafe and a play area for children,” said Smedberg.
The company plans to open its second Hej Homes store in Mumbai for which it is still scouting for the place.
Apart from this, Swedish major is also planning on introducing an app loaded with different makeover programs done by IKEA, making small webisodes for the app and curating a catalogue. The app’s main aim – a large number of downloads, reaching out to a larger consumer base, and doling out tips on how to get great homes in low budgets.
Exploring IKEA’s Hyderabad Store
The world’s biggest furniture retailer will be opening its first India store spread across 400,000 sq.ft. in Hyderabad in December 2017.
The store will feature 7,500 furniture and home furnishing products and a 1,000-seater restaurant serving healthy and nutritious Indian and Swedish cuisine. It will also have a play area for children and a day-care centre for children of its employees.
IKEA is investing Rs 700 crore on the Hyderabad store and will hire 500 direct workers and provide 1,500 indirect jobs.
Business Model
The company, which received Government approval in 2013 to invest Rs 10,500 crore in India under the 100 per cent foreign direct investment route, plans to open its second store in Mumbai, where it has purchased 24 acre land. And going further, it plans to open 25 stores in nine Indian cities over next 10 years.
However, the size of all the stores will be different just like its other 328 stores around the globe. However, one thing that will be common will be the business model of the furniture wing as well as the restaurant.
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What’s on the Menu?
The Swedish company’s restaurants, which are an integral part of the store, are known for their meatballs. The meatball meal comprises of 20-25 per cent of the the total IKEA restaurant business.
However, in India, the furniture giant will be replacing their traditional Swedish Meatballs with Chicken and Vegetable Balls.
Other highlights of the menu from Swedish cuisine will include salmon, cinnamon buns, croissant, blueberry jam and cloudberry.
READ MORE: IKEA to open 1,000-seater restaurant in Hyderabad store
They have also localised the menu for India and will be serving various local dishes like Hyderabadi Biryani, Dal Makhani and Indian bread to name a few.
IKEA plans to keep the price of dishes at these restaurants low.
Globally, the restaurant business accounts for 5.4 per cent of the total revenue of IKEA whereas in India, the furniture giant is expecting the restaurant to contribute 10 per cent of the total revenue.
The Way Forward
IKEA is also planning to double its sourcing from India from 300 million euros to 600 million euros by 2020. About 70 per cent of the current sourcing is in textiles and rugs.
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After Hyderabad and Mumbai, IKEA will be opening stores in Bengaluru and Delhi NCR.
The company has plans to open two to three retail stores every year. Ahmedabad, Chennai, Kolkatta, Pune and Surat are the other cities IKEA is looking at.
It will host 5-6 million customers every year. The customers will be able to touch and feel the products at the store and they will also have the option of ordering the same online.
READ MORE: IKEA to integrate its stores with online trade in India