Ikea competes with eBay, Craigslist and Gumtree with a peer-to-peer marketplace where customers can sell used furniture to each other.
Ikea Preowned will be tested in Madrid and Oslo by the end of the year, with the aim of rolling out the buying and selling platform worldwide, says Jesper Brodin, managing director of Ingka, the main operator of Ikea stores.
“This has been a dream for some time,” Brodin told the Financial Times. “We are in a place at Ikea where we can do more advanced and cooler things. There is incredible confidence in the company's digital evolution.”
The new marketplace is part of a transformation Ikea has undergone in recent years, as the company moves from being an out-of-town retailer where customers have to pick up their furniture and assemble it themselves, to a company that offers online sales, downtown stores and services such as assembly.
Ikea had a small offering where the company bought used furniture from customers and resold it in-store. But the new platform is more ambitious: It targets the second-hand market, where customers sell directly to each other – an area where Brodin estimates Ikea has a higher market share than in selling new furniture.
Customers enter their product, their own pictures and a selling price, while Ikea's own database with artificial intelligence brings in its own advertising images and dimensions. The buyer picks up the furniture directly from the seller, who receives either money or an Ikea voucher with a 15 percent bonus.
“Very often there is a monopoly or oligopoly on platforms that work,” Brodin said, referring to eBay or digital classifieds services such as Gumtree in the UK and Finn in Norway. Finn has 8,700 Ikea items listed in Oslo alone. Early listings on Ikea Preowned include large items such as sofas for up to 600 euros and wardrobes for 450 euros, as well as smaller items such as a toilet paper holder for 4 euros.
The listings are free, but Brodin said Ikea could ultimately charge “a symbolic fee, a modest fee.”
He added: “We will look at the full scope, including the economics. If a lot of people take advantage of the offer to get a discount at Ikea, it's a good way to get back in touch with customers. I'm very excited. I think it makes business sense.”
Ikea has previously tested selling its new furniture on third-party platforms such as Alibaba's Tmall in China, but the preowned platform is its first foray into the second-hand market. It is also in line with the retailer's desire to become “circular and climate positive” by 2030.
The world's largest retailer had a plan in 2020 to introduce online shopping worldwide within three years, but due to the Covid-19 pandemic, that plan had to be accelerated to six weeks.
“It was a question of survival for us,” said Brodin. “We were 100 percent closed. Digital transformation saved us.”
He added that Ikea now wants to develop a platform that is “the go-to place for home furnishings,” with the marketplace being “one of the most important parts.” Other parts could include services, finance and home planning, as well as shopping, he added.
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