This is the first time ever Swedish furniture giant IKEA has decided to lower prices in the Indian market. This is not a sale or short-term discounting offer, IKEA has decided to lower prices of products by 20-35 percent as part of its New Lower Prices Initiative. This price cut will be applicable to some products, said IKEA.
These price cuts come at a time when the Indian retail industry is going through its worst phase ever. Owing to the coronavirus outbreak and lockdown, retail stores like IKEA were permitted to re-open on June 8.
However, IKEA says that it was planning this affordability initiative much before the pandemic. "We have been working on the lower price initiative much before COVID-19 happened. The timing of this price reduction fits well as there are economic challenges & discretionary spends are under pressure. We see home as being 'centre stage' now," said Kavitha Rao, Country Commercial Manager, IKEA India.
When IKEA first opened doors in India in 2018, it announced that 1,000 products at the store will be priced below Rs 200. This pricing strategy was formulated keeping in mind the price-conscious Indian audience it was catering to. The organised home furnishing market in India has been growing at 20-22 percent per annum and includes retail chains Home Centre, HomeTown and online retailers such as Pepperfry and Urban Ladder.
Since its re-opening after the lockdown, IKEA has been flooded with orders for 'work-from-home' furniture. "Work-From-Home furniture has seen a 3x-5x increase in demand. Work desks, ergonomic chairs, table organisers and table lamps are seeing a huge uptake," said Rao. E-commerce and omnichannel are seeing good traction both in terms of the number of orders and value, said IKEA.