tag:blogger.com,1999:blog-29153349.post571249645007809705..comments2023-09-29T04:09:54.831-04:00Comments on Thought Center: Ikea pulls out of plans to set up shop in India - Retail, the big pictureSindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-29153349.post-13651864493103747412009-06-12T09:35:01.332-04:002009-06-12T09:35:01.332-04:00@ Juby
Interesting segmentation and segregation. B...@ Juby<br />Interesting segmentation and segregation. But at the end of the day, they are still into furniture retailing. The key might lie in how they may try to separate their offerings from those of other small, yet numerous players in the market. <br /><br />@cahobs<br />Absolutely. Retail in India is of a completely different flavor and this flavor cannot be tapped through conventional means. Like you rightly said, it would perhaps end up being a niche segment supplier, for providing the odd tea lamps and vases or perhaps cater specifically to the small upmarket section of the Indian population that knows the brand presence of IKEA outside India. The question is, how can IKEA model their offering to be uniquely Indian, like say Mac did! <br /><br />@ Pappu,<br /><br />Yes, IKEA would perhaps not contemplate setting up their behemoth shops here in India on account of lopsided economies of scale. The only thing that hurts about their walk away is the fact that a lot of possible employment opportunities have been lost!Sindhu Subramaniamhttps://www.blogger.com/profile/09426043808886874328noreply@blogger.comtag:blogger.com,1999:blog-29153349.post-21870090277319035812009-06-12T08:35:31.932-04:002009-06-12T08:35:31.932-04:00Though forced by the economic downturn, IKEA did i...Though forced by the economic downturn, IKEA did itself a favor, assuming they had plans to do business like in Europe.<br />In India we like to do our shopping like we shop grocery from a market, one vegetable from each hawker.<br />A DIY furniture does not fit into our scheme. Yes, it could appeal to the globe-trotting brand conscious youngsters. In big country like ours, Ikea would not be content with such a meager customer base.<br />To reach out further, they would have to do a McDonald's and Indianize their brand and their pricing. There is still less scope when they stoop so low, as there is also another flourishing cheap furniture market(low quality they maybe; Would Ikea still promise better quality at such pricing). These markets are more governed by local cottage industry which would then come under government protection and Ikea would invite more trouble getting down to break that.<br />Though we have seen the likes of Big Bazaar and Reliance enter the retail segment with a bang in India, they threw the less protected street hawkers and provision stores out of business. They also did this only by offering unimaginable low prices and offering even lower quality products. Despite this Reliance has been contemplating and even in some places winding up Reliance Retail.<br />I even wonder if Walmart still regrets not being permitted to start operations in India (thanks to the lobbying efforts by Reliance and FutureGroup).<br />So for now its bye-bye Ikea. TCPappooshttps://www.blogger.com/profile/01663627648503025304noreply@blogger.comtag:blogger.com,1999:blog-29153349.post-34483872750832630872009-06-12T03:47:44.777-04:002009-06-12T03:47:44.777-04:00I agree with you, IKEA is what walmart is to groce...I agree with you, IKEA is what walmart is to groceries in Europe, however IKEA can become an upmarket furniture store here in India where you go and pick up a few things you need, no matter how competitively they price IKEA can never match the low price structures prevalent in India, if any doubt we can just check out the few Italian stores that were opened a few years back! they remained 'imported furniture' stores and never became the household names they were back in their country, the same applies to IKEA, you hit it on the nail with your jewelery shopping analogy. What IKEA can perhaps do in the future (read when the markets improve) is to open stores that are not huge as in Europe and elsewhere but to open smaller stores that specialize in catering to the needs and appeal to the local culture and that would give them a foot hold, if i may be so bold as to compare 'mcdonalds' and coke did just that. though the comparison may look odd or out of scope, nonetheless an important one for a foreign venture in India.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-29153349.post-67924536028267982812009-06-11T07:57:39.260-04:002009-06-11T07:57:39.260-04:00i dont think Ikea and other retail formats are com...i dont think Ikea and other retail formats are comparable. Why Ikea would fail is sure due to the regional context, but not which impacts other retail in the same fashion. <br />Westerners love to indulge in do-it-yourself activities in their free time. They take up carpentry, pottery as hobby activities and never miss a chance for adventure sports. We Indians kill ourselves so much at work that all we want to do in leisure is catch up on sleep/movies or go go-karting at max. Also, there is a mentality that these are low-skilled jobs that you can always pay someone else to do it for you. Hence the upper middle-class who is the target for such a product is infact indifferent to such activities.<br />Apparel/Household retail on the other hand has infact caught on really well in the indian context, I would say. Failure of such ventures are mainly due to oversupply, location, and insufficient financial resources for consistent promotionsJubynoreply@blogger.com