European furniture retailer Ikea has cut prices on a sizable part of its over 9,000 articles on offer in India by up to 39 per cent, a top official said on Tuesday.
The price cuts have been done courtesy of improvements in the overall sourcing, design, product development, packaging and volumes, Ikea India's chief executive and chief sustainability officer Susanne Pulverer told PTI.
The price cuts range from 16-39 per cent and are not linked to inventory management, where a retailer offers a limited-period discounts on products, Pulverer said.
The company's insights over the last four years of its presence in the country, where it understood that Indian consumers are very price sensitive was the prime reason for it, she said, adding that it is not driven by competitive pressures.
Lower prices are in the DNA of Ikea, she said, hinting that similar moves may be initiated in other markets where the brand is present in despite the globally high inflation.
There will not be any compromise on the quality, function, design and sustainability features of the products either, she made it clear.
When asked if this will entail compression of profit margins, she said the company has a much broader way of looking at it which is a combination of multiple factors where any potential margin impact will be compensated by higher sales.
She said the price decreases have been effected in the most loved products of the Ikea portfolio, which extends to 9,000 articles but declined to specify the number of articles where the reductions have happened.
Broader lines of products where the price cuts have happened include living room articles, storage, kitchen, mattresses and bedroom furniture, she said. The company, which is operating five offline stores, is at the end of its stated Rs 10,500-crore investment cycle for the country, she said, pointing out that the last of the stores in New Delhi will take about 30-36 months to open.
After the end of the investments, it will be taking a call on further expansion, she said, adding that Chennai is a city which it is keen to have a presence in. When asked about the business performance, she said the company considers India as an important growth market and is here for the long term.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
