Sitting on the toilet seat, Edward Norton in the 1999 film Fight Club is browsing through the Ikea catalogue. In a narrator's voice he observes, "Like so many others, I had become a slave to the Ikea nesting instinct. If I saw something clever like a little coffee table in the shape of a yin-yang, I had to have it."
It's this feeling, the 'Ikea nesting instinct', that Indians haven't experienced till now. Simply because we don't have an Ikea here. And going by president and CEO of Ikea, the Scandinavian home products giant, Mikael Ohlsson's quiet visit last week, it will be some time before we know that feeling.
The moment the floodgates opened for 100% FDI in single-brand retail, all eyes were on Ikea, which has been playing the waiting game to launch its India operations for some years now.
On November 27, PTI reported that Ohlsson will be visiting India to "announce strategic initiative for Indian market". The furore over retail reforms has mainly been addressing the 51% FDI in multi-brand retail. The move to increase FDI to 100% in single-brand retail largely went unnoticed. Yet, Ohlsson, probably persuaded by the current political climate, came and went last week, without any "strategic" announcement.
An Ikea spokesperson said, "Ikea has decided to take some more time to plan its India strategy." Yet, Ikea is not exactly alien to India. How can it be? It's a brand that has 326 stores in 38 countries. And a catalogue print run that rivals Harry Potter books (197 million catalogues in 29 languages and 61 editions in 2010).
In 2009-10, it showed a profit of $23.1 billion, a 7.7% jump from the year before. Many Indians have managed to have Ikea furniture, ordering their local carpenter to copy iconic Lack tables, Billy bookcases or Malm dressers from the Ikea catalogue.
What's the Big Ikea?
In the West, Ikea has become the first furniture of any individual. The October 3, 2011, issue of The New Yorker had Lauren Collins dissect the brand, its philosophy and culture. Collins describes it as "Legos for grown ups, connecting the furniture of our adulthoods with the toys of our childhood." It's currently the world's biggest furniture and furnishing manufacturer and the third largest consumer of wood ahead of Walmart but behind Home Depot and Lowe's.
Did you know that one in 10 Europeans is conceived on an Ikea bed?
Furniture industry insiders in India too are waiting for Ikea. The industry joke is that local carpenters will get new ideas to copy after Ikea comes in. More seriously, and as Manish Parekh. executive director of @home by Nilkamal, a furniture & furnishing retailer . says, Ikea's entry will help the segment grow more organised.
"Our study shows, wherever Ikea has opened a store, it has helped to grow the market and all players flourish." Launched in 2005, @home is now 19 stores across 13 cities, the brand achieved its break-even last year. "There is definitely a shift towards organised furniture retailing. Growth rate of organised retail is much higher than the overall furniture industry," he says, "But in India, we need Ikea to educate customers about readymade furniture."
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