Why has IKEA not taken off in a big way, even though it’s known for its DIY furniture assembly concept around the world? There could be several reasons, such as taxes, price, store accessibility, product line localization, and visibility.

Store accessibility is a challenging task in itself. It requires customers to travel long distances to find a store, which can be easily nullified by offering products at affordable prices. Additionally, it’s valuable to study these models like DMart or Reliance Smart Bazaar. These stores understand the Indian customer’s need for affordability and cater to it effectively through their pricing and product offerings. While their product quality might not be top-notch, it aligns well with customer preferences and budget constraints. Their success highlights the importance of offering value for money, encompassing both affordability and product suitability.

The tax component plays a huge role in pricing. Products imported attract a substantial tax, while the same product sourced from a local vendor could be significantly less expensive. By building this local manufacturing hub could give them a competitive advantage while boasting its contribution to the local micro economy. Also, it will give an in-depth understanding from the manufacturing perspective what are the customers’ needs from their perspective. It is a key insight which helps them to create a better local product catalog.

There is no doubt about the quality and the finish of the IKEA’s product line one thing they should try to understand the pricing should affordable to an average indian customer. As it needs to compete with local unbranded shops which offer the product with tax included in its pricing. A recent study says that India Home furniture market size is around $22.92 billion in 2024 and is expected to grow at a CAGR of 10.64% ,i.e $38.38 billion by 2029.

There is a huge potential and upside to it as per the CAGR yet IKEA can and should work on its operating expenses and decrease its loss on a quarter-to-quarter basis. It should have certain categories which are inspired by local culture particularly on the home furnishing as India prefers usability and practicality along with home decor styles. Variety of styles are good to have like Contemporary, Traditional, Bohemian, Scandinavian & Industrial yet usability and practicality plays a huge role in selecting a product.

It is time for IKEA to reboot its strategy and outreach program that are sensitive to Indian customer needs.