The launch of the app comes after covid-induced lockdowns delayed the Swedish retailer’s plans to build large stores in India, a market where it opened its first store in 2018 in Hyderabad.
Customers in Mumbai, Pune, Hyderabad, Ahmedabad, Surat and Baroda can order its range of home goods and furnishings using the app available on iOS and Android, the company said. The app will offer 7,000 products.
“It is important to note that the Indian consumer is very oriented towards an app. We can see that in terms of the smartphone penetration in the market, mobile internet usage as well as the usage of mobile apps in the country,” said Kavitha Rao, country commercial manager, Ikea India.
This is “creating a certain level of urgency” in terms of launching the app here, she said. “We’re also expecting to see a much higher conversion, but we also believe that we will attract a new customer segment that, maybe, was not as comfortable using the mobile website in the past.”
The company said the user’s feed will be personalized with images and products based on interests and purchases.
The app also allows customers to add the products to their shopping list even while physically browsing through the products in the store.
Customers can also find a built-in barcode scanner that will help them learn more about the products, including materials and dimensions, the company said in a statement.
Ikea India’s Hyderabad store was followed by online stores in Mumbai, Hyderabad and Pune in 2019.
The second physical store opened at Navi Mumbai, Maharashtra, in 2020. The company saw increased conversions on the back of higher usage of its online shopping platform over the last two years.
The past year has been particularly hard for retailers the world over as they deal with pandemic-led temporary store closures and as consumers shun physical stores to instead shop online.
India, too, has seen a “dramatic rise in e-commerce” adoption, said consulting firm Accenture in a recent report.
“Online sales (on the mobile site) have been doing very well and are far higher than our expectations. India was rated as one of the countries with digital adoption being the highest, and we also brought a plethora of services to support our consumers during that timeframe,” said Rao.
Ikea plans to reach 100 million Indian consumers over the next few years through different channels.
Through the app, the retailer plans to address the two cities where it has physical stores—Mumbai and Hyderabad. “We would like to target 10 million people in Hyderabad and 22 million people in Mumbai. We will look at the entire population and the addressable households in both those cities,” she said.
Online sales could soon open up for shoppers in Bengaluru, where the retailer has a store under construction, Rao said. “That is the next market that we will be opening. We are also exploring what possibilities exist to open up e-commerce in more markets,” she added without divulging further details.
Ikea is also planning to open its first shopping centre in India in Noida after it purchased land in the state earlier this year.
India has 574 million monthly active Internet users—smartphone penetration stood at 44% in fiscal 2020. Its large internet population makes the country an attractive market for retailers looking to offer more digitally accessible points of shopping.
Ikea is taking a more multi-channel approach globally as it seeks to reach more shoppers in densely populated neighbourhoods beyond its large suburban stores.
The app launch is a part of that strategy to reach consumers through a combination of big Ikea stores, smaller city-centre stores, and online platforms.
After the launch of its Navi Mumbai store with an investment of ₹1,500 crore, the retailer also plans to open two smaller format stores in Mumbai within a year, the company said in December.
Ikea India Pvt. Ltd reported a 63% jump in revenues for the year ended 31 March 2020 at ₹665.6 crore, Mint reported earlier, citing data sourced from Tofler. The company’s loss widened to ₹720.7 crore in the year.
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