Hyderabad: Swedish furniture giant Ikea Ltd is looking to tie up with real estate developers in Hyderabad to display its fully furnished “show homes” in upcoming housing projects in order to give buyers an idea of how their homes would look with Ikea furniture, a company executive said.
Ikea Hyderabad plans tie-up with developers to display ‘show homes’
The idea is to showcase its products in one apartment in a project, similar to what developers usually do by creating sample apartments to attract buyers. “Business to business is also an important area for us going forward. So what we know in Hyderabad today is that approximately about 1,000 new homes are being built a week. Our ambition is to build contact and be the partner of choice for constructions,” John Achillea, manager of Ikea’s Hyderabad store, said in an interview. The 400,000 sq. ft-store is Ikea’s first in India and opened about three months ago.
Achillea said Ikea is currently trying to look for developers to work with, and is talking to firms such as the Ramky Group to implement the “show homes” concept. “We don’t want to rush this, because it isn’t just an exhibition. Here, the furniture belongs to the developers as well, so they don’t pay for it. It is us showcasing our product. But we get to go there and talk about it,” he said. When the Hyderabad store opened on 9 August, around 50,000 people visited it just on the first day and roughly 1,70,000 over the first four days. Now, it sees about 20,000 to 25,000 customers on weekends, and about 15,000 people on weekdays.
The store has about 7,500 products, of which about 1,000 are priced at under ₹200. The huge interest, said Achilllea, was something the retail giant anticipated. “It is where we expected it to be. We anticipated high visitation, higher at the beginning, and about 4.5 to 7 million people a year. So nearly 100,000 people on an average a week. And the best time to come here is between 10am to 12 noon, which is an amazing experience,” he stated.
Achillea said 60% of the store’s sales are of home furniture, and the rest of home furniture accessories, of which articles under ₹300 have very high volumes in sales.
The “Kalas” four-piece spoon set, priced at ₹15, for instance, has turned out to be one of the best-selling items, selling between 2,000 to 3,000 pieces in a day.
“It is part of our affordability strategy. This is a spontaneous purchase, you see the price and say wow. But when you’re talking about say a ₹20,000 sofa, more conversations need to happen,” Achillea added.
Harminder Sahni, founder and MD of Wazir Advisors, said that the concept of Ikea’s “show homes” is not new, as real estate developers also do the same with local furniture outlets in cities.
“It will be able to penetrate the market easily in India as there are hardly any such brands who do this. It is a well-established brand.”
Sahni however added that the high-volume sale of the affordable home furnishing accessories is a result of visitors going to Ikea for the first time and that the footfall is likely to stabilize after some time.