India was ready and waiting. People on Twitter were excitedly making plans to drive down to Hyderabad from Bangalore this weekend. The hashtags on Instagram were getting out of control. Sneak preview photos were circulated on WhatsApp. IKEA was finally here.
This article, in fact, was meant to coincide with IKEA’s launch. The second of a two-parter that looks at the market IKEA is entering as well as its likely impact, it was supposed to be published one day before IKEA was to inaugurate its first store in India—19 July 2018.
Then, four days ago, IKEA India released a statement. The opening date of the store in Hyderabad was pushed back by two weeks to 9 August 2018. “IKEA Retail India decided to move the date as it needs some more time to live up to its expected quality commitments towards customers and coworkers,” read the statement issued by Peter Betzel, IKEA Retail India’s CEO.
IKEA’s website proudly claims that its Indian entity was established over 20 years ago. Ever since, it has waited to enter India. After so long a wait, 20 more days didn’t faze the Swedish furniture behemoth.
For India’s furniture retailers, the announcement must have come as a relief. But this is no escape.
As they say, the apocalypse isn’t cancelled. Merely postponed.
Last week, our story was about how IKEA’s entry into India was likely to affect furniture startups Urban Ladder and Pepperfry. The two companies attempted and failed to make a pure online model work, and each of them moved offline. Straight into IKEA’s domain. It was a story about what makes furniture a unique category, and how design isn’t much of a differentiator right now for consumers.
Today, we look at four other giants occupying India’s furniture space. Between them, these four companies have an estimated annual revenue of over Rs 5,000 crore ($729 million), and constitute nearly 35% of the organised furniture market. Each one of them comes with its own story. Each story has its own lesson. IKEA’s entry will alter these stories irreversibly. For better or worse? We look at both possibilities. Alongside, we examine what drives a price premium in furniture. Is it quality? Is it brand? Or is it something else? There are no easy answers. It is, after all, the hardest and the most fascinating category in all of retail.
What if you had a bigger brand?
As we reported earlier, the e-commerce player at the forefront of moving offline furniture brands online was Snapdeal. Pepperfry followed suit quickly. Then Flipkart and Amazon. They approached nearly all established offline players in India. These offline players needed to create a viable online presence.