Ikea is set to challenge online businesses like eBay, Craigslist and Gumtree by launching a customer-to-customer platform for buying and selling used furniture. The primary operator of Ikea stores, Ingka, will trial the platform, known as Ikea Preowned, in Madrid and Oslo, with plans for a global roll-out, confirmed the firm’s CEO Jesper Brodin.
Mr Brodin expressed enthusiasm about the venture, detailing it as an exciting advancement within Ikea’s ongoing digital evolution. The introduction of the peer-to-peer marketplace is part of Ikea’s recent shift in strategy, from being a traditional out-of-town retailer where customers collected and assembled their own purchases, to providing online sales, urban stores, and additional services like assembly.
Whilst Ikea does currently buy back and resell used products from customers, the establishment of Ikea Preowned represents a broader effort to tap into the second-hand market, a landscape where Brodin believes Ikea already possesses a significant advantage over new furniture sales.
The platform functions by customers uploading images and pricing of their items whilst Ikea’s artificial intelligence-driven database incorporates promotional photographs and display measurements. The buyers then coordinate with the sellers directly to get their purchases, either receiving a direct payment or opting for an Ikea voucher with an extra 15% value.
Brodin went on to discuss how platforms such as eBay and Gumtree often dominate the digital classifieds market in the UK, whilst in Norway, a property site named Finn lists around 8,700 Ikea goods in Oslo alone. The initial Ikea Preowned listings range from higher-priced items like wardrobes and sofas, through to less expensive products like toilet roll holders.
Brodin hinted that Ikea might consider introducing a “modest fee” for listings in the future, however he is eager to test the model fully, including the financial aspects. The marketplace is also viewed as a method of re-engaging with customers, providing them with more opportunities to connect with the brand.
Ikea has made its debut into the second-hand marketplace with the launch of its Preowned platform, after having earlier experimented with the sale of its novel furniture on Alibaba’s Tmall in China. This new move is consistent with the company’s aim to adopt a “circular and climate positive” operational model by 2030.
Ikea, the world’s leading retailer, had initially aimed to introduce online shopping globally within an ambitious three-year timeframe in 2020. However, the exigencies of the Covid-19 pandemic necessitated a hastening of this plan to a mere six weeks.
Heralding the immense role digitalisation played in the company’s survival, Mr Brodin stated, “We were completely shut. We owe our survival to the digital shift.” He also expressed, moving forward, Ikea’s intent to build a platform that becomes put simply, the default choice for home furnishing. A platform whose cornerstone would be the marketplace, while also incorporating services, finance, home planning and of course, shopping. All rights reserved Financial Times Limited 2024.