My first IKEA purchase ..

Ikea is already a household name in Europe and US. I have been hearing lot about it and been watching videos and even read cases done on it.
 

Here is what Forbes has to say about it - IKEA was founded in Sweden in 1943 by 17-year-old Ingvar Kamprad. IKEA operates 422 stores in more than 50 markets. Nearly 70% of the stores located in Europe. The best countries for IKEA are Germany (15% of sales) and the U.S. (14%). The retailer added 19 stores last year, including its first store in India in Hyderabad. Ikea received 957 million store visits in 2018 and 2.5 billion to Ikea.com. It offers roughly 9,500 products.

Ikea generated sales of Euro 39.6 billion in 2020. From sales of about Euro 21.5 billion in 2008, Ikea has grown in 2020 to about Euro 39.6 billion, ie. about 60% in ten years. Very decent and modest growth considering the fact that this GREEN industry cannot grown like other modern businesses.

 

The other day I made my first purchase at Ikea on the Ikea India app. From Bangalore Chennai etc we can only make online purchases till now. Very soon I am sure Ikea's physical store will open in Bangalore, that is what I have been told. My purchase was a steel bedside table costing about Rs 800/-. I was surprised to find that the same table is available at Amazon as an Ikea product at Rs 1300/-. The design w sleek and excellent. Great value for the INR 800 I spent on it.

 

I remember it was about 4 years ago, that I first did a case discussion on Ikea in the class. IKEA has grown very big and in India they have set up their head office in Hyderabad and their big store in Mumbai.  Ikea is operating in an industry that is fully dependent on nature and greenery. If there are no trees, Ikea does not exist. This raises a major question about the scaling up of this industry naturally, unless one comes with innovative sustainable measures for scaling up.Ensuring availability of hard and soft woord across the year in different geographies is a real challenge for the company. Availability of hard wood, soft wood is a challenge in India. With the increasing rate of deforestation, Ikea is in a very piquant state in India as citizens are aware of the environmental degradation such a consumerist culture in wooden furniture can bring to India.

 

Planned deforestation in select areas in the country growing select type of wood and usage of particle board can make big difference in India. Rubber trees are harvested after almost 15 years of its growth and loss of yield, when its wood is used for making strong durable furniture.

Will Ikea be able to bring bout an innovative wood growing and logging method in India to satisfy the needs of the world ? Who will be the credible and reliable competitors for Ikea in India and the world ?

These days having stylish wooden furniture at home has become a style statement which has led to a consumerist culture among youngsters to acquire more and more wooden furniture even though there is no real need for it at home. We have to wait and see what will be the big change that Ikea can bring about in the youngsters of the country ? 

 

Mail me at geasaw@gmail.com for a case on Ikea.  

 

George