Ikea Is Not Low Cost: Deepak Shenoy


Ikea made a big bang when they finally opened a mega-store in Hyderabad. Thousands flocked to the furniture giant’s first outlet in India, creating scenes of chaos and traffic. Ever since, the company has made headlines for everything from its quirky food to its problematic food.

You might have noticed that they’ve yet to hit the news for any furniture-related events. In Europe and America, Ikea is the bread and butter for lower middle class families. Buy great looking, well-made furniture for cheap, and assemble it yourself. What’s the downside?

Well, in India, the obvious disadvantage is…everything. Indians don’t want generic, off-the-shelf furniture that anyone can get. Especially when you can get one-off artisanal pieces for much cheaper at the local furniture maker. Plus, why would you want to assemble your own bed, when you can hire someone to do it for dirt cheap?

To be fair, Ikea have started to appreciate these differences in Europe versus Southeast Asia. After a bad run in Thailand, they’ve made some concessions in India, such as sending over a carpenter to your house to assemble your furniture for free.

Then again, if your trademark is cheap, build-it-yourself furniture – but you are both more expensive and covering costs of installation – what exactly is Ikea’s trademark in India? On the latest episode of The Capitalmind Show, Deepak Shenoy delves into exactly how the Swedish company can become a success.

Oddly enough, he thinks they should just copy the business model of famous burger joint McDonald’s.


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