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Five challenges Ikea faces as it opens in India

Some of the goods on sale inside India's first ever Ikea store. Photo: AP Photo/Mahesh Kumar/TT

Published: 09.Aug.2018 07:19 hrs

As Ikea opens its first store in India on Thursday following years of delays, here are five challenges the Swedish furniture giant will face while trying to navigate a difficult local market.

Making money

Ikea is spending $1.5 billion in India but analysts reckon it is going to be several years before the company with a presence in 49 countries starts seeing significant returns on that investment.

The home goods retailer has already spent close to $750 million procuring Indian sites for four stores, including the massive, new 37,160-square-metre (400,000-square-feet) outlet in Hyderabad.

Ikea will offer more than 1,000 products under 200 rupees ($2.91) but experts say it faces a difficult balancing act between setting prices low enough to attract cost-sensitive consumers but high enough to reel in the status-conscious rich.

"It needs to get its brand image and product pricing right lest the growing Indian middle class steers away from the brand," Sowmya Adiraju, an analyst at research firm Euromonitor, told AFP.

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