IKEA breaks into e-commerce in Saudi Arabia
An Oct. 12 press release covers the pilot program, which is now active in select cities, and will later be expanded to include the entire country.
The new service also provides for the setting up of specific delivery dates for customers. This new online service will add to the convenience of getting IKEA furniture shipped anywhere in Saudi Arabia. IKEA will work with major regional credit cards like Sadad to offer secure payment solutions.
Customers in Saudi Arabia will still have the option to go to brick and mortar stores in Jeddah, Riyadh and Dhahran, stores that exemplify IKEA's “self-serve, self-assembly” concept, an idea that’s popular with thrifty DIY buyers around the world.
“Saudi Arabia has been one of the fastest growing e-commerce markets in the MENA region,” Faisal Al-Gain, country marketing manager at IKEA Saudi Arabia, said in a press statement. “Due to boundless technological progress that we have witnessed during this day and age, it is only right for us to keep reinventing ourselves and the experience we offer our customers as we are continuously committed to creating a better everyday life for the many people.”
Media spokespersons for IKEA Saudi Arabia and media relations managers from Memac Ogilvy PR declined to provide comments by press time; but, in comments on Oct. 28, Dr. Timothy Derdenger spoke to Gulf News Journal about the kind of strategy it takes to get such e-commerce operations running and make them effective. Derdenger is a professor of marketing and strategy at Carnegie Mellon’s Tepper School of Business.
One of the issues with this type of new e-commerce project, he said, is brand awareness.
“Getting customers aware -- through organic means -- is probably what they're striving to accomplish,” Derdenger said.
While IKEA has lots of brand awareness in the U.S., Derdenger suggested it may be different in other global markets, and the strategy may differ as a result.
As for the expansion of IKEA's e-commerce service into Saudi Arabia, Derdenger said it makes sense for companies with bricks and mortar stores to add online purchase functionality.
“E-commerce is very beneficial for firms which offer products with characteristics that are easily evaluated before purchase, as consumer do not have to rely on traveling to stores to experience the good,” he said. “Given the sheer number of these products offered by IKEA, and the fact that consumers are becoming more comfortable with online purchases, it's not at all surprising that IKEA has moved forward with expanding its e-commerce platform to other international markets, such as Saudi Arabia.”