Despite my obsession of learning from failures in international business, every once in a while, I must acknowledge companies that did an exceptionally good job at entering a foreign market. And today, it is IKEA’s turn to step in front of the curtain. More than a decade ago, the Swedish furniture and retail giant has had its share of disappointment in Russia (see post #27, “IKEA fed up with Russia“). However, last year IKEA has proven it has gained a deeper understanding of the Russian market with a bold initiative that seems to be paying off. IKEA recognized that a large percentage of Russians still live in uniform Soviet-era apartment blocks, which have a limited number of standardized floor plans. Ikea has replicated these floor plans for both a virtual reality application available in some of its stores and, more importantly, on its website in Russia, called Kvartiroteka (Квартиротека). On the Kvartiroteka, IKEA customers can now find creative furniture and design solutions that allow them to spice up the standardized apartments by picking from a variety of creative solutions. The site features more than a dozen types of standardized floorpans with multiple innovative solutions for each one of them. Depending on the customer’s family situation and needs, the same apartment can now be a flashy bachelor pad for the twenty something, a home for a family with small children, or a single parent with a teenager. The Kvartiroteka concept has struck a chord with Russians and brought about 2.8 million visitors to the website since the launch and increased sales by double digits. This move not only shows great respect for local conditions and consumer preferences, but it is also a successful initiative to replicate IKEA’s in-store experience in the online space. Russia has become IKEA’s fastest-growing market after Hungary, and the company is considering whether to introduce the Kavrtioretka concept to places with similar communist-era housing, such as Poland or China. As urbanization increases and car ownership / usage decrease, IKEA’s approach might prove to be an important strategic investment into the future. Well done!
Brown, Evan Nicole (2020). Soviet housing gets an airy makeover, thanks to IKEA, Fast Company (March 9).
Khrennikov, Ilya (2020). Ikea’s web app brings interior design to Soviet-era Apartments, Bloomberg Businessweek (February 4).
Retail Detail (2020). Soviet flats push Ikea to enormous growth (February 10). Russia Business Today (2020).
Russia Business Today (2020). Ikea Expands in Russia through Interior Design Web App (February 5).