In Davos at the recently held World Economic Forum, Ingka Group deputy CEO and CFO Juvencio Maeztu said that Ikea is going to cut prices – up to 20 percent price reduction in more than 250 articles. The price cuts will be implemented in the coming weeks. Maeztu said, “We have a long term vision to create a better life for the people. So, we have a long term approach at everything we do and the time is ready with high inflation and high interest rate.”
In an exclusive interview with Storyboard18’s editor Delshad Irani, Ikea India CEO Susanne Pulverer, commenting on the price cuts, said, “We have seen a positive development when it comes to getting better prices on the products, especially the post-COVID; when we had seen a lot of inflation and increased costs on raw material, transports and everything. So that’s what we will immediately give back to customers worldwide. And, of course, that goes for India as well. So, we are currently working on how we can further invest in lowering the prices on a number of products that we know are loved by our customers.”
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When asked about the changing buying behaviour of Indian shoppers, both offline and online, Pulverer said Ikea has seen a big shift from brick and mortar. “From a very successful way of meeting customers with the big blue boxes where you can have the full experience – a full day out with all activities and the inspiration you get in the store, to new ways of meeting new needs of consumers. We have to be accessible, to make it a smoother journey, to also be able to consume online.”
In India, she added that it’s easier “when we start from scratch and we are already building an omni-channel here compared to countries where we are more mature and have to turn.”
Read More: Ikea to reduce prices of over 250 products by 20 percent in the coming weeks
India is a very fast evolving society and the digitalization rate is amazing, Pulverer told Storyboard18, adding the competence that Ikea has on digital here is incredible. “We can drive a lot of development that is to the benefit of more.
Ikea, known for its super-large format stores, is also planning a multi-format store approach in India. “We have learned over the years that yes, the full experience in a flagship store, we believe a lot in, but we need to complement it with smaller size formats to be more accessible and closer to where people live.”
Going forward the Indian market will see the mix of Ikea formats. “We are still going to build the big, full-size stores, like we have projects in Delhi now, which is the next big market. But to compliment that we are trying and testing what is the relevant formats and I’m sure we will see a variety of that. It will depend on the market and the needs from the customers there.”
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Watch the full exclusive conversation on Storyboard18 on CNBC-TV18