Ikea India, the furniture and home furnishing conglomerate, has reduced prices on a sizable part of its over 9,000 article range by 16-39 per cent. A similar move may be initiated in other markets.
Susanne Pulverer, Ikea India’s Chief Executive and Chief Sustainability 0fficer, said that the price cuts have been done, courtesy to improvements in the overall sourcing, design, product development, packaging and volumes.
She cleared that this step is not linked to inventory management, where a retailer offers a limited-period discount on products. It is also not driven by competitive pressures.
She said that the prime reason for the price cuts is their understanding that Indian consumers are very price-sensitive, which they knew from the company’s insights over the last four years of its presence in the country.
“There will not be any compromise on the quality, function, design and sustainability features of the products either,” she said.
Regarding the question of the impact of reducing prices on profit margins, she said the company has a much broader way of looking at it which is a combination of multiple factors where any potential margin impact will be compensated by higher sales.
