Day 39 – Q 1. The leading furniture company IKEA opened its first store in India in Hyderabad recently. While it will have its economic implications for local furniture business, don’t you think it is also symptomatic of India’s burgeoning middle classes’s aspirations in the era of globalisation? Comment.
1. The leading furniture company IKEA opened its first store in India in Hyderabad recently. While it will have its economic implications for local furniture business, don’t you think it is also symptomatic of India’s burgeoning middle classes’s aspirations in the era of globalisation? Comment.
अग्रणी फर्नीचर कंपनी आईकेईए ने हाल ही में हैदराबाद में भारत में अपना पहला स्टोर खोला। हालांकि स्थानीय फर्नीचर व्यवसाय के लिए इसका आर्थिक प्रभाव होगा, क्या आपको नहीं लगता कि यह वैश्वीकरण के युग में भारत की बढ़ती मध्यम वर्ग की आकांक्षाओं का भी लक्षण है? टिप्पणी करें।
Approach:
- Introduction
- Economic implications for local furniture business.
- How it reflects India’s burgeoning middle classes’s aspirations?
- Conclusion
Introduction:
Ikea, the Swedish retail giant opened its first Indian store in Hyderabad recently. The company hopes to open 25 outlets by 2025 across the country of 1.25 billion people.
The company is bringing its classic IKEA range along with a small percentage of locally relevant products for the Indian market.
Economic implications for local furniture business:
With IKEA selling furniture at affordable prices (given its economies of scale), the local furniture business will get hurt. Both in terms of price and range.
However, As part of India’s FDI norms, 20% of products sold are locally sourced, while 1,000 products are made in India. The aspect of local sourcing can be tapped by local business.
Reflecting India’s burgeoning middle-class aspirations:
India is poised to overtake the US to become the world’s second-largest middle-class market by 2022. Rising incomes and affluence make for an attractive market in India
- IKEA is harping on affordability to capture the Indian market, which is known to be price sensitive. From items starting at as low as Rs 15, IKEA’s Hyderabad store has 1,000 products priced below Rs 200.
- Apart from affordability, the range is high. Given the diversity of Indian customer the wide range will help the brand cater to demand of all sorts of customers.
Conclusion:
Of course, the Indian customer needs more such stores which provides household items at affordable prices. The government, however, needs to provide enough handholding to local businesses so that they don’t get affected adversely.
Best answer: srp
