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Ikea finding India alluring, but difficult

By Sarah ChenIndia
1 min read
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Ikea has good reason to expand into India. The country has an emerging middle class dominated by millennial-age, mobile-first consumers, among other perks. That has led many retailers to eye the country as an alternative to faltering China.

English is an official language in the country, and serves as a common language for many of the sub-populations there. And while there’s a Chinese equivalent to Facebook, Twitter, and other social media platforms, the most widely used ones in India are those that are widely used in the U.S. India gives Facebook its second-largest membership base, after the U.S. That means brands have one less barrier to bust through when reaching Indian consumers.

Ikea finding India alluring, but difficult

Above all, though, experts have told Retail Dive that India’s demographics are almost ideal for retailers, with a population that includes a large young, mobile-first generation and a growing middle class. It’s now outpacing China as the world’s fastest-growing big economy.

But, it turns out, there’s a catch, or several. The bureaucratic and economic realities in India also present significant obstacles, as this report on Ikea demonstrates.

Questions & Answers

Q.

What makes India an attractive market for retailers like Ikea?

A.

India offers an emerging middle class, a large young, mobile-first generation, and a growing economy. English is also an official language, and widely used social media platforms are the same as in the US, simplifying brand reach.

Q.

Why is India considered a good alternative to China for retail expansion?

A.

India's economy is now outpacing China as the world's fastest-growing big economy. Its demographics are almost ideal for retailers, unlike the faltering market in China, making it an attractive alternative.

Q.

What major difficulties do retailers face when entering the Indian market?

A.

The bureaucratic and economic realities in India present significant obstacles for businesses. The article highlights these as major catches for retailers like Ikea despite the market's allure.

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