Swedish home furnishing retailer IKEA has announced a permanent price reduction of 20-30% on its top-selling products in India to make them affordable for consumers.
This is a part of the company’s plans to enable more people to buy its home furnishing products and see volume growth.
The company said it could cut prices after achieving economies of scale and getting the souring model correct.
Prices have been cut in products across categories including chairs, toys, mattresses, bookshelves, sofas and many more products for the bedroom, living room, kitchen and outdoors.
“We believe that no matter what changes at home, everyone should be able to afford home furnishing solutions that make their everyday brighter,” said Kavitha Rao, country commercial manager, IKEA India said in an interview. “Lowering our prices, without compromising on quality, is a step towards that,” she added.
“The changing customer mindset with the pandemic has made affordability more relevant,” she said.“And this situation makes it even more important for us to be able to live up to meet today’s reality,” she added.
“Local sourcing remains a main driver of affordability and over a third of the products under New Lower Price are Made in India,” she added.
She said that the company would continue to work towards reducing prices of more products in the future.
“We see that affordability is very relevant in the Indian context and since the time we have established ourselves in India, we have worked on various initiatives linked to affordability. The one that we have announced now is very different from a discount or a sale, which is for a defined period of time,” she said.
This is the first time since its entry into India that IKEA had cut prices.
“We expect that customers will buy much more quantities of these products. We are expecting sales of these products to go up,” she added.
She said COVID-19 has changed consumer behaviour. “We saw consumer needs change. You can clearly see that Indian consumers have taken big on the digital channel, right, which also means that we need to address our resources towards the digital channel and make the omni channel experience even better. And that’s exactly what we’ve done as IKEA,” she said.
Ms. Rao said despite the COVID-19-related setback, the company’s expansion plans would continue.
“Yes, we are very much continuing on our expansion plan, as IKEA we always take a long term perspective. We are committed to India in the long term and we will continue to work on, building our strength in the Indian market,” she added.
