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News Article

Mexico Takes IKEA by Surprise

By Sofía Hanna | Thu, 11/19/2020 - 17:12

IKEA had planned to open its first store in Mexico City's Oceania Mall in October 2020. After the pandemic hit, the inauguration was postponed to 2021. However, the company did release its online sales platform and the results the company was expecting were not half as good as the ones received, reports Forbes.

MBN previously reported that Malcolm Pruys, CEO of IKEA in Mexico, said opening the store was not an option during the pandemic. However, the company had an e-commerce business that was starting in the fall. Even though some would hesitate to open up something like this during a pandemic, Pruys did not as this could bring new opportunities for people to enjoy IKEA’s products' comfort and accessibility.

Once the website was released, the company was swamped by the number of orders. Demand for its products exceeded expectations by 1,000 percent. Such was the case that the company even considers it is short on staff, so it will be hiring more personnel to handle the number of orders being made, stated Pruys in an interview with Forbes. This sudden surge in forecasts means IKEA’s strategy needs to change. The company was planning to open a physical store first and then move on toward e-commerce. Now, the goal is to figure out how to make deliveries available for the whole country.

Since the pandemic started, the way customers are shopping has changed. There is a new preference toward checking the product online before buying it and if it is available on the site, they will buy it there to avoid leaving their homes and risking their health, as stated in an MBN article. Another MBN article mentions that along with the increase in online sales, there would be a new "boom" in the job sector among retailers and logistics companies to meet last-mile demands, which is what is happening to IKEA.

Even though IKEA’s business plan in Mexico took a different turn, it still has plans to open its first store in 2021 and to follow that with a branch in Monterrey and Guadalajara. "Plans have not changed; we are still looking for opportunities to grow IKEA. Political and economic factors are out of our control, but our goals remain ambitious. We want to take IKEA to all the country," Pruys told Forbes. In the short term, the company wants to guarantee a good online experience, to establish the brand and to make sure that the stores will work correctly, reports Forbes.

The data used in this article was sourced from:  
Forbes, MBN
Photo by:   mastrminda, Pixabay
Sofía Hanna Sofía Hanna Journalist and Industry Analyst