Ikea woos India’s rising consumer class, tapping new markets

Six months after Ikea opened its first store in Hyderabad, the 400,000-square-foot cornucopia of furniture, linens, kitchenware and other goodies is drawing between 10,000 and 30,000 visitors per day. (AP)
Updated 15 February 2019

Ikea woos India’s rising consumer class, tapping new markets

  • Ikea hopes to win over India’s growing consumer class with its clean, air-conditioned stores and unique offerings
  • It says India is a test case for whether to keep shifting resources toward emerging economies

HYDERABAD, India: Swedish giant Ikea is tackling the $40 billion Indian market for home furnishings, taking on local furniture makers in places like Hyderabad’s bustling Nampally market.
Ikea hopes to win over India’s growing consumer class with its clean, air-conditioned stores and unique offerings. It says India is a test case for whether to keep shifting resources toward emerging economies, including Latin America and China, given the saturation of markets in Europe and the United States — and the possibility of another global recession.
Six months after its first store opened in Hyderabad, Ikea’s 400,000-square-foot cornucopia of furniture, kitchenware and other goodies is drawing between 10,000 and 30,000 visitors.
But it’s unclear if all that foot traffic translates to big sales. So far the best sellers are priced below 300 rupees ($4.20).


Saudi mall operator Arabian Centres bucks retail malaise as profits surge

Updated 21 August 2019

Saudi mall operator Arabian Centres bucks retail malaise as profits surge

  • Mall operator defies online shopping pressure by lowering discounts to tenants, boosting occupancy and rental revenues

LONDON: Arabian Centres, the Saudi mall operator which went public in May, said first-quarter consolidated net profit almost trebled to SR227 million ($60.53 million) as occupancy edged higher across its shopping centers. Revenues increased by about 2.5 percent over the year to SR572.5 million.

The results helped to propel the group’s shares 3 percent higher on Tuesday.

The group said that it boosted performance by offering lower discounts to its tenants which helped to drive rental revenues. Like-for-like occupancy across all malls increased  to 93.2 percent from 92.4 percent in the year earlier period. Finance costs fell by about 65 percent from a year earlier to SR73.9 million.

FASTFACT

 

27 - Arabian Centres plans to expand its mall portfolio to 27 within four years.

Retailers across the Middle East are coming under increased pressure as more consumers shop online, while at the same time, tourists are spending less in dollar-pegged economies because their purchasing power has been cut by the strength of the greenback. Still, in Saudi Arabia, the under-served retail market is expected to receive a boost from rising investment in the entertainment sector, especially new cinemas.

“Faced with the rising challenge of online shopping, the brick-and-mortar retail segment has sought to diversify its offering to secure its customer base, providing an increased range of leisure and entertainment facilities,” said Oxford Business Group, in a report analyzing emerging trends in the Saudi retail sector.

“The reintroduction of cinemas to the Kingdom in April last year ... is expected to increase retail footfall,” it said.

Arabian Centres, majority-owned by Fawaz Alhokair Group, listed its shares on the Tadawul stock exchange in May — the first to do so in the Kingdom under Rule 144a, allowing the sale of securities, mainly to qualified institutional buyers in the US.

The group aims to expand to 27 malls within four years.