Ikea's marketing expenses are always optimised and not extravagant: Amitabh Pande

In a conversation with e4m, Pande, Country Marketing Manager, IKEA India, explains why Ikea is a cost-conscious company that believes in delivering affordable prices

e4m by Javed Farooqui
Published: Jan 4, 2021 8:18 AM  | 4 min read
IKEA India

Furniture retailer IKEA India's Country Marketing Manager, Amitabh Pande, has said that the retail company's marketing spends will be less impacted by the pandemic and will continue to be based on what is needed to build the brand for the long term in India.

According to Registrar of Companies filing shared by market intelligence firm Tofler, Ikea India's advertising promotional expenses for the fiscal ended 31st March 2020 has declined to Rs 76.3 crore compared to Rs 82.2 crore in the previous fiscal.

Pande said that the company's marketing and advertising expenses vary from year to year depending on the plan for the year, which itself is dependent on the brand and business goals for the year. "We are a cost-conscious company that believes in delivering affordable prices on our products. So our marketing expenses are not extravagant and always optimised," he noted.

He pointed out that FY19 was the year when Ikea launched its first store in India in Hyderabad and FY20 was the second year in Hyderabad, where the marketing expenses were to sustain the business.

"The company had different plans for FY19 and FY20 and therefore there is likely to be a variation in the spends. We have just launched the second IKEA India store in Navi Mumbai and are online in Mumbai, Hyderabad, and Pune. Our marketing spends in FY20 and going forward have been and will be less impacted by the pandemic and will continue to be based on what is needed to build the brand for the long term in India," he stated.

IKEA's brand objective is to build local relevance and create a meaningful, loved, and trusted IKEA brand. "IKEA is all about the home - We are deeply engaged in understanding life at home, what people do, how they live at home to be able to create communication that is inspiring engaging, and relatable," he said.

The company's advertising strategy is based on building the IKEA brand from scratch in India where the majority are still getting to know it. Its India positioning tag line is “Make Everyday Brighter”.

"And all our communication is designed to depict that. India is a new market for IKEA, we have been operational for 2 years and we will continue to gain more understanding of the different markets to be more relevant and in line with our updated understanding, we expect our advertising and communication to evolve over the coming years," he averred.

Speaking about the marketing mix, Pande said that the mix varies depending on the campaign and the intent is to maximize reach, impact, and engagement. "We usually deploy a mix of traditional and new age/ online media, PR and owned channels like the website and IKEA India social channels. The mix also varies from one campaign to another, depending on the objectives and the insights. Our coworkers are also an important part of our communication plans, and our best brand ambassadors to spread the IKEA love."

On the company's key consumer base, Pande said that anyone who lives in a home is part of our consumer base in India. "With a wide range of 7500+ products under one roof, we have something for everyone, no matter what demographic you belong to. we are reaching out to the many people in India with our beautiful, affordable, sustainable home furnishing products and solutions and there is something for everyone However, we do have a stronger inclination towards families with children."

Despite the pandemic upsetting the business plans of most companies, Ikea will continue to invest in India. "We are committed to India for the long term, and despite the pandemic, we continue to invest in India on all fronts, including in marketing and communications towards building a unique, meaningful, and trusted brand," Pande asserted.

The company's net sales/revenue from operations swelled to Rs 566 crore in FY20 from Rs 343.7 crore a year ago. Other income jumped to Rs 99.6 crore from Rs 64.2 crore. Total revenue stood at Rs 665.6 crore from Rs 407.9 crore.

Total operating expenses excluding interest, depreciation, and amortization stood at Rs 1066.8 crore compared to Rs 945.8 crore. The company's net loss widened to Rs 720.1 crore from Rs 685.4 crore.

Part of Ingka Group, IKEA India had opened its first retail store in Hyderabad in August 2018. Subsequently, the company launched online stores in Mumbai, Hyderabad, and Pune. Recently, Ikea opened its flagship store in Navi Mumbai. It also has plans to set up two city-center stores in Mumbai.

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