Swot Analysis Of Furniture Market

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With a middle class population of over 400 million and purchasing power on the rise, the Indian furniture retail market has been classified by CSIL Milano as one of the 14 largest furniture markets in the world. The Indian furniture market is worth US$8 billion and is growing at 30% compound annual growth rate in the organized sector which represents only 15% of the whole industry. The branded furniture market comprising of residential and commercial furniture, is valued at US$1.3 billion in 2008 and expected to reach US$3.7 billion in 2012. Currently there are only 10,500 furniture importers in the organized sector and they mainly import from Italy, Germany, Spain and Malaysia. Domestic demand is largely satisfied by local production. Nonetheless,…show more content…
It wasn’t until June 2013 that IKEA returned to India with an approved plan to invest 105 billion rupees (today valued at about $1.6 billion) and open 25 stand-alone stores across India. Although they’ve been sourcing materials from India for the past 28 years, IKEA now has to comply with local rules, which have significantly held up the progress of India store operations. As a fully independently owned company, they must ensure that an average of 30 percent of the production value of sold goods should be sourced from within India, and within five years of the initial investment. Also to set up new, big scale industrial suppliers following the IKEA IWAY conditions, their code of conduct when it comes to working conditions, social and environmental responsibility, it all takes…show more content…
Targeting this segment helped IKEA project itself as an aspirational western brand. This is a massive change in strategy, as IKEA is targeting the mass market in other parts of the world. This is a strategy that has worked for their expansion in China. Marketing Strategy In most markets, the company uses its product catalogue as a major marketing tool. But since IKEA is new in Indian market it needs to build its brand first. This requires excessive branding in initial stage so that people can get familiar with brand. This can be done through media, newspaper, TV advertisements, billboards. Also a lot of online advertisements through social media as they did in case of China. In China the company is using Chinese social media and micro-blogging website Weibo to target the urban youth. Store location IKEA also need to adjusted its store location strategy. In Europe and the US, where most customers use personal vehicles, IKEA stores are usually located in the suburbs. In China, however, most customers use public transportation. So the company set up its outlets on the outskirts of cities which are connected by rail and metro networks. Similarly, in urban cities they may start their stores in malls that attracts large number of people

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