#162 IKEA’s Kvartiroteka
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).
June 15, 2020 @ 3:26 am
It was a nice job from IKEA with an excellent entering condition (unlike the post #27). I found two issues very different in Russian culture. In my opinion, considering these two along with other factors can help us for qualified future decisions/investment. They are: 1) the classic culture of Russia is still alive even the same as 1 century ago or more, 2) they are family centered and the older generation is so much determined to transfer their culture to younger generation. According to the type of IKEA products, social-family issues matter in considerations. Also I learned from this article, offering a qualified product through the atmosphere of respect, love and clarity can bring results out of imagination.
June 29, 2020 @ 4:29 pm
I am an IKEA fan of my own and therefore it does not surprise me, that the company managed to address the needs of the Russian clients perfectly. It was very clever of IKEA to offer the possibility of spicing up the standardized flats, as they have so many products which can be combined, especially for small spaces IKEA offers a very broad product range, more than any other furniture company. I think a company should never underestimate the influence of local circumstances and influences like the local culture and habits. Only if a company is aware of the fact that no other country is like their home country, they can manage to adapt to foreign countries while still staying loyal to their own principles.
June 29, 2020 @ 6:46 pm
IKEA did a very good job entering the Russian market this time. Considering the Russian culture, it is crazy to see that they are still stuck in their soviet-era apartments. The country still lives under great political control which additionally makes it harder for companies to expand there. Especially for big companies this means that you really have to analyse and object a specific market before you enter it. I personally think it was very brave from IKEA, entering the market. It tells us once again that a great strategy in a country where change is not on everyones agenda, is the main key for success. However, I am was a bit worried because IKEA has its fails there and then, but the outcome showed that IKEA was able to smoothly adapt to this new market (e.g. standardized online floorplans) and nicely considered the different culture, history and current situation in the country. Nice job, IKEA!
July 18, 2020 @ 11:24 pm
This blog gives us a good example of a multinational company that has the opportunity to reoccupy the market even if it failed at the beginning. IKEA has good sales results in many countries, but it entered the Russian market with very unsuccessful results. However, by understanding the local geographic background, cultural living habits, and consumer consumption preferences, it has reversed IKEA’s sales and operations in Russia. I think this is something many multinational companies should learn, because entering a new market may be smooth or not at the beginning, but this does not represent the final result. The companies must constantly learn and adjust.
We can see that an idea of Kvartiroteka simply solve the needs of different family populations who live in limited floor plan in Soviet-era apartment buildings. IKEA figured out those population are there mainly customers, so it thought of a strategy suitable for those consumer groups. Finally, the blog later mentioned that the company was considering whether to introduce the Kvartiroteka into other communist countries. I think this is a good idea, but IKEA should first search for the laws, culture, and consumer patterns of these countries and then evaluate whether to enter the market.
July 19, 2020 @ 10:56 pm
IKEA has done a fantastic job in adapting its market entry strategy for Russia by not only learning from its passed failed attempt in entering the marketplace, but by gaining a deeper understanding of how Russians live at home. By understanding the need to adapt its strategy for the Russian market by producing an easily accessible and visual aid tool, named Kvatiroteka, IKEA’s mapping of the minimal number of floor plans available to Russians is brilliant. The modern technology has allowed IKEA’s customers to to understand how their apartments can look in a fashionable and affordable way that is fit for their particular lifestyle. Additionally, the naming of the application is brilliant because of its equivalency to the English translation, roughly, of “apartment”. IKEA’s thoughtfulness to understand that most of Russia has apartment buildings, instead of single family homes, supported the bridging of what IKEA is known for with its functional furniture designs and that it can be easily transform someone’s apartment. Had IKEA chosen an equivalent of “mansion”, “house”, or “cottage”, for example, the average Russian consumer may have felt that the virtual tool would not apply to them and would therefore alienate them from the potential IKEA offers.
July 26, 2020 @ 11:00 pm
IKEA’s entry into Russia is a good example of a reversal, because it was not smooth at the beginning. However, through their continuous changes, now Russia is its second fastest growing market after China. First, Ikea has a precise assessment of the Russian market. Russian Consumers became much more rational in terms of their spending, they would like to purchase durable products. The company’s vision is “to create a better everyday life for the many people.” Ikea continually improved to give a better everyday life through material goods. Second, its continuous innovation represents an emerging consumer market and a lifestyle of the twenty-first century which many Russian middle classes yearn for. For example, the Kvartiroteka concept in the article, it helps consumers find the most suitable furniture solution according to their preferences, tastes, and prices. This is an expression of respect for local consumer culture and customer satisfaction. The degree of corporate cultural adaptation and corporate diversification are some of the factors for Ikea’s success in Russia.
January 7, 2021 @ 12:56 pm
A perfect example how you can adapt your initial plan or process to become successful at the end and that it takes a multi-year time commitment in order to really see the fruits of your harvest when entering a foreign market. It also proofs how IKEA, as a multi-national, immediately spot the opportunities for other markets to extend the benefits of the new concept for their bottom line. Once more IKEA also is keeping up and adapting with/to the existing situation in their market. Another example in Germany the first ever city store of IKEA opened in 2014 with a different concept in order to cope with the situation of many people inside the city not having cars or difficulties to get bigger pieces from the IKEA stores in the suburbs to their homes. With this new store concept of less space for the “show-room” but more storage capacity for pick-ups IKEA also introduced a new delivery concept which till now is a big success. Not often re-produced yet besides in Taiwan and U.K. but there are plans e.g. for Vienna, Austria.
IKEA is following their plan and process sometimes slowly, always carefully but surely successful at the end.
January 13, 2021 @ 9:01 am
IKEA has done a great job here. Thank you, Gerhard, that you also bring positive examples in your blog – this underlines that expansions, with appropriate preparation can be very successful. In my opinion, IKEA’s success is based on a very good analysis of the Russian market, which is a very smart approach. I assume that the fact that the Russian population in general strives to avoid uncertainty was well known to those responsible for the expansion (see also Hofstede’s cultural dimensions. Uncertainty avoidance in Russia is at a very high score of 95. Sweden’s score is in contrast at 29; values as of 13.1.2021). To combine this knowledge with knowledge of Russia’s architectural history is, to my mind, a kind of stroke of genius and shows that those in charge do not view Swedish culture as superior or universal. In general, it shows that a systematic approach and a conscientious analysis of the target market are critical for success. Chapeau IKEA.
July 11, 2021 @ 5:31 pm
I totally agree with your opinion, that IKEA actually did a great job at entering the Russian market. Their concept to stay on top of Russians minds is awesome because this really is what Russians want when they buy furniture.
When I lived in Russia for a month I also noticed, that the style of their apartments is completely different to the Austrian standards and it is like they are stuck in a different era. This is also due to the huge political control that the country is influenced by. Moreover, IKEA was that good at entering the market, because they did research and analysed the russian people before starting business in this country. No matter how well thought out the strategy is, if it does not fit the culture of the country, it has no chance of success. And this is the reason why research is key, when expanding your business.
January 8, 2022 @ 8:09 am
Ikea’s Kvartiroteka is a very successful program. I will like Ikea’s culture. It always focuses on the customers’ needs and change their products based on the customers’ needs. Like Ikea’s Kvartiroteka, Ikea did a lot of research to understand the Russian culture and living condition, and then, Ikea discovered that a large percentage of Russians still live in uniform Soviet-era apartment blocks, which have a limited number of standardized floor plans. Similarly, at the beginning of entering the Chinese market, Ikea sold the beds which was the Hongkong’s standard. After several weeks, Ikea found the beds’ sales were very bad. It did the survey and discovered the beds of Hongkong’s standard were too small for the customers in mainland China. Another example was that Ikea entered the Japanese market. It was first time when Ikea entered the market out of Europe. It got a big failure because Japanese did not like the “DIY” culture. It immediately changed the beds to the European standard. As a multinational, it is important for Ikea to do a lot of research to understand the different cultures in different markets. For example, in blog 27, it failed because it did not well know the Russian culture, pervasive corruption and an impenetrable maze of bureaucracies before Ikea entered the Russian market.
April 15, 2022 @ 6:42 am
This example of Ikea in Russia shows how Ikea manages the balance between the focus on its core competence and the necessary adaption to the foreign market. As seen in the video from Ikea in China, they are also adapting to this local market. The famous Ikea catalog is only limited access in its paper form – because, in China, the world is digital. Also, the Kavrtioretka concept in Russia results from a deeper market understanding combined with the core values and the strategy of Ikea and to be on the pulse of the time.
After defining if your company is ready to enter a foreign country, I think product readiness seems to be the most critical part. To ensure that your product, service, and brand fit the consumer and market needs, you must know the foreign market preconditions, consumer preferences, and cultural differences.
Ikea also does very well is to roll out best practices from a specific market in other markets. In Austria, the famous Ikea paper catalog also does not exist anymore. And it only would be a question of time until the new inner-city store concept in Vienna Westbahnhof is launched in other countries.
June 26, 2022 @ 6:35 pm
Honestly, it does not surprise me, that IKEA was so successful with this strategy to enter a foreign market. I think this is a perfect example to never underestimate the influence of local circumstances, like the culture of the people that are living in this certain country. With offering products to spice up the standardized and undecorated flats of the Russian civilization, IKEA captured their hearts rapidly. My opinion is that IKEA could enter every market in the world, if the company does it in the same way they did in Russia. If you ask me, IKEA did a great job with Kvartiroteka and taught us an important lesson: Even if it does not work the first time, learn from your faults and try it again.
July 3, 2022 @ 9:24 am
When it comes to buying new furniture my first port of call is IKEA (or at least their website). Considering that I am not surprised that they managed to enter the Russian market in such a successful way. Nevertheless, I believe there is still room to improve IKEA’s overall strategy – or at least the one for Austria. When I think back to the search for my last rented flat, I remember that all the kitchens in the different flats looked quite similar. All of them had the same colors and patterns. However, it was quite difficult to find a matching dining table and other furniture. Perhaps IKEA should not only think about cultural aspects when entering new markets, but also to improve their existing ones.
March 19, 2023 @ 10:31 pm
Having lived as an expatriate in Dubai & Chicago for several years, IKEA has not only allowed me to furnish my homes cost-efficiently but also appeased some kind of homesickness through meeting other Europeans while waiting in line for the famous meatballs at IKEA’s cafeteria. During a trip across Sweden a few years ago I took the time to pass by the city of Älmhult, where IKEA’s successful journey has started with their first store, that has now been transformed into a museum. I took some photos of famous quotes from Ingvar Kamprad and remember a very emotional video which I understand as the connection between post #27, “IKEA fed up with Russia“ and post #162 IKEA’s Kvartiroteka, “I get a little worried when you call someone “the best”. All of a sudden, I might start to think of myself as being good. That would be a disaster. Whatever I do today, I have to be able to do a bit better tomorrow. To sit down and think that I’m good at something would be a disaster for me” and “I couldn’t get through a single day without having three or four errors to deal with. A life without mistakes would bring very little success”.