Ikea's first India store opens today, aims to reach 200 mn people in 3 yrs

Ikea aims to reach 200 million people in India in the next three years and its journey is going to be based on affordability and accessibility, the Swedish home furnishings chain’s Group Chief Executive Officer Jesper Brodin said on Wednesday on the eve of the launch of the company’s first Indian store in Hyderabad.  

Brodin said the company would like to keep the product prices within the reach of various segments of the society without compromising on quality. The furniture retailer, he added, wanted  to expand its footprint in other Indian cities as quickly as possible to gain a significant share in one of the largest markets in the world. In 2013, the Centre had cleared Ikea's Rs105-billion foreign direct investment (FDI) proposal to set up 25 single brand retail stores in the country. Of this investment commitment, the company has invested Rs10 billion on the Hyderabad store, which has a 400,000-square-foot built-up area, besides acquiring land in Mumbai, Bengaluru, and Delhi to set up similar stores in the coming years.

Addressing the local partners and media at the “day before opening” event at the 1,000-seater restaurant of the brand new store, Brodin said, “Ikea is good for India, and India makes Ikea better.”

He said the company’s products offering was based on a thorough understanding of the needs and aspirations of Indian households, and in this process it had also learnt new things that could be replicated in other stores outside India.

The first store in Hyderabad will be followed by online presence, a store and touch points in Mumbai next year. Subsequently, it will set up one store each in Bengaluru and National Capital Region (NCR). Besides, the company is also planning to invest Rs7.5 billion to build its own warehouses and a large distribution centre in Maharashtra in the next three years, as most of its import consignments reach Indian shores via Mumbai port.

In the next phase, Ikea will expand to other cities, such as Ahmedabad, Surat, Pune, Chennai and Kolkata.

Ikea’s Hyderabad store features 7,500 products, of which 2,000 products are tailored to suit Indian needs, according to the company. About 1,000 products are priced below Rs200. It expects 3-6 million footfalls at the store in the first year. The store employs 950 co-workers, half of them women, directly and 1,500 indirectly in services. The €38.1-billion Ikea group has more than 400 stores in 49 countries and has registered 936 million customer visits.

Ramesh Abhishek, secretary, Department of Industrial Policy, said the Indian retail market was set to touch $1-trillion mark in the next few years, and the presence of global retail companies such as Ikea would have a positive impact on the market growth.