Brands
Behind the scenes of IKEA’s India marketing strategy
MUMBAI: Hej IKEA i Indien! This translates to ‘Hello IKEA in India!’ Unless you’re living under a rock, by now we’ve all heard and read about Swedish furnishing brand IKEA’s great and pompous launch in India!
Indians alien to the concept of assembling furniture themselves lunged at IKEA’s launch in Hyderabad City. This reflects from 40,000 customers trooping in on the opening day, where the retailer rang up sales of a little over Rs 1 crore the same day.
But what really made Hyderabad and the nation go gaga over a company that they had probably never even heard of before 2017? Well, the answer is simple – branding and marketing.
In the global advertising world, IKEA is often cited as a master of branding, marketing and advertising. The company has consistently won the marketing game on social media and traditional mediums to carve some of the finest campaigns to reach out to the masses but India is a different animal altogether. A global campaign or a standard tone would never connect or work with the audiences here as India is an amalgamation of several cultures, traditions and beliefs.
But how do you connect with a country that has a population of 1.35 billion, doesn’t know a thing about the brand and can’t connect with the concept of self assembling furniture? Labour is cheap here so you can just get your local carpenter to fix anything for you in a jiffy. Hire the best agency available and capture nuances in the communication. For this, the Swedish giant hired Dentsu Impact as its official creative agency to launch the brand’s maiden campaign for India. Its ‘Make Everyday Brighter’ ads resonated fantastically well with Ikea’s belief to create a better life every day and drove home a customer traction that none had ever expected.
And now, as IKEA moves ahead aggressively to eke out a niche for itself in the country, Dentsu Impact is steadily helping the brand to discover this new culture and expand its footprint, nationwide.
While we have all read about how the launch of IKEA is a positive step for FDI, generating local jobs and a tough fight for e-commerce players, nobody really knows what went into making IKEA’s launch in India grandiose. To understand this, Indiantelevision.com spoke exclusively to the men behind Ikea’s entry in India – Dentsu Impact president Amit Wadhwa and chief creative officer Soumitra Karnik – where they spoke about what went behind the planning, the agency’s strategy for Ikea, challenges while working for an international brand and much more. Excerpts:
How did Dentsu Impact end up bagging the IKEA business for India?
Amit Wadhwa: It was a long process that started way back in February 2016. They called us for the credentials sharing meeting which was more of a chemistry meeting. They shortlisted eight agencies basis the credential meeting and asked us on how they should launch IKEA in India and what should be their strategy. It was quite an elaborate pitch and they gave us three months to work on the pitch which was a little surprising considering how pitches normally happen in India. It took us a lot of time to understand the brand, how it functions and its tonality. Our creative team actually went to Hyderabad and stayed there for a few weeks to understand the Hyderabad market and the requirements for home furnishing there.
So when did you officially get the mandate?
Amit Wadhwa: We officially got the mandate in September 2016. But there’s a lot more that we’ve done for IKEA other than the launch campaign.
What do you mean when you say that? Were they pre-launch initiatives?
Amit Wadhwa: Yeah, we did an employee branding asking people to join IKEA where we used existing IKEA workers to promote the campaign rather than models. We also launched an experience centre for IKEA before the store launch where people could see the products but not buy them.
How was it working for an international brand like IKEA? How interesting was it for you to work on a brand’s entry in a market like India?
Soumitra Karnik: It’s been quite interesting and exciting because every adverting person around the world admires IKEA’s creative ads and it is a dream brand to work with for everyone. However, the challenge is that it’s not really easy to work for IKEA. IKEA is not only about award-winning ads and its products, it’s more than that and you realise that only after you’ve worked with them. The tonality of the brand is extremely exciting as they want to understand the local nuances of each market they enter into.
What was the brief that team IKEA shared with you when you said they want to launch their maiden campaign in India?
Amit Wadhwa: No two countries are exactly the same and moreover India is an amalgamation of many countries. What we have done for IKEA is take their belief and marry it with what India stands for. There are great similarities between brand IKEA and what India stands for. Family culture plays an important role for Indian and Swedish families and that’s well ingrained in IKEA as a brand and all their communications.
How will you ensure that you maintain brand recall through creativity in your campaigns for IKEA?
Amit Wadhwa: We have launched ad campaigns where it talks more about the products available at IKEA rather than just throwing out a good looking ad. We are creating things which are firsts in the IKEA world. The whole endeavour is to keep a balance between creating a brand language since IKEA has to be distinct and at the same time it needs to connect with the Indian consumers. They are very clear that the ads need to be locally relevant to connect with the consumers.
What will be IKEA’s strategy for India under your agency’s guidance?
Amit Wadhwa: It is not a typical client-agency relationship but more of a joint effort by IKEA and Dentsu to ensure we talk to many. Our focus will be on connecting with the family audiences but at the same time, they want to connect with the many.
Who were your target consumers when you created the campaign? Also, going forward, will the campaigns be targeted at anyone and everyone?
Amit Wadhwa: When we launched the first campaign, we wanted to target families and everyone. Now, going forward, while families will be at the core of our communication, we will look at targeting bachelors and elderly couples. You will see shades of many of them in our communication, but the core audience will always remain families with kids as IKEA wants to target families.
What is Dentsu Impact’s plan with IKEA going forward? How will you strengthen the relationship?
Soumitra Karnik: When we started working on the brand, we were super happy but now we are overwhelmed. It’s going to be an exciting journey with many more stories coming up. What the Mumbai store will bring to us is what we are really looking forward to!
Are there any constraints while working for a global retailer in India? For instance, how will a person sitting in Hyderabad connect with a brand that’s Swedish unless you really break it down to their level?
Amit Wadhwa: It’s definitely a challenge, but an interesting one! We understand that there could be challenge in terms of acceptance since it’s a Swedish brand and Indians probably had never even heard of it, but with the right communication, you can overcome that challenge. We really think we were able to overcome that but are working towards creating better communication going forward.
Brands
Microsoft faces worst quarter since 2008 financial crisis
Cloud giant battles soaring AI costs and fierce competition from nimble startups.
MUMBAI: When the tech titan starts looking a little wobbly, even the Magnificent Seven can feel the tremors because Microsoft is currently starring in its own sequel, “Clouds and Doubts.” Microsoft is on track for its worst quarterly performance since the 2008 global financial crisis, according to Bloomberg, as investors grow increasingly uneasy about rising capital expenditure and intensifying competition from nimble AI firms. The company has been pouring money into AI infrastructure, yet markets are questioning when these hefty investments will finally deliver stronger revenue growth.
At the same time, investors are shifting away from traditional software stocks amid fears that AI startups such as Anthropic and OpenAI are developing autonomous agents capable of replacing established products, including those from Microsoft. Jonathan Cofsky, portfolio manager at Janus Henderson Investors, noted growing concern that customers may bypass Microsoft and deal directly with AI vendors, potentially disrupting its core business and putting pressure on pricing and margins.
Microsoft’s stock has tumbled 25 per cent in the first quarter, putting it on course for its largest drop since a 27 per cent fall in the fourth quarter of 2008. It has also emerged as the weakest performer among the so-called Magnificent Seven technology stocks, while a broader index tracking the group has fallen 14 per cent over the same period. The shares slipped a further 1.7 per cent after markets opened on Friday, marking a potential fourth consecutive session of declines.
Cofsky pointed out that Microsoft has become more capital intensive and that improved investor confidence will hinge on assurances that software growth will not slow materially. Despite the sell-off, the stock is now trading at less than 20 times projected earnings over the next 12 months, its lowest valuation level since June 2016. Its valuation remains slightly above that of the S&P 500 Index, although it has recently traded at a discount to the broader benchmark for the first time since 2015.
Bloomberg data shows Microsoft’s capital expenditure, including leases, is expected to surge to $146 billion in fiscal 2026, up around 66 per cent from $88 billion in fiscal 2025. Spending is projected to climb further to $170 billion in fiscal 2027 and $191 billion in fiscal 2028, based on average estimates. Investors are growing cautious about such levels of spending without clearer signs of stronger growth.
Microsoft’s Azure cloud division has reported a slight slowdown in growth compared with the previous quarter, while its Copilot AI product has seen limited user traction, prompting internal changes aimed at improving performance. Ben Reitzes, an analyst at Melius Research, warned in a March note that Microsoft’s upside in Azure could be constrained as the company works to address challenges related to its AI models and Copilot offering, adding that these issues are unlikely to be resolved in the short term.
Of the 67 analysts covering Microsoft, 63 maintain buy ratings, three hold ratings and one a sell rating. The average 12-month price target of $592 implies a potential upside of more than 64 per cent, the highest on record based on data going back to 2009. The stock is also trading below its 200-day moving average by the widest margin since 2009.
Reitzes suggested the dominance of buy ratings may indicate complacency among analysts, while highlighting risks in Microsoft’s productivity and business processes segment as well as its More Personal Computing division. In contrast, Tal Liani of Bank of America reinstated coverage with a buy rating, citing durable multi-year growth prospects across cloud and AI. Jake Seltz, portfolio manager at Allspring Global Investments, maintained that Microsoft retains strong long-term value and that its AI strategy is likely to be validated over time, viewing near-term concerns as a potential opportunity for longer-term investors.
The report highlights a growing divergence in market sentiment, with optimism around long-term AI potential weighed against immediate execution risks and investor uncertainty. In the world of big tech, even the mightiest clouds can have silver linings but right now, Microsoft’s investors are scanning the horizon for clearer skies.
