India will be among the top five markets for us: Ikea's Peter Betzel

In a Q&A, the CEO of the furniture retailer's Indian arm dwells on his firm's localisation efforts and long-term commitment to the country

Furniture retailer Ikea will launch its second store in India at Navi Mumbai on Friday. The over 500,000 sq ft outlet will be a flagship store for the Mumbai region, followed by two smaller outlets that will come up in the financial capital by next year. Ikea, according to Maharashtra government officials, has invested Rs 2,000 crore in its Navi Mumbai property alone out of the Rs 6,000 crore set aside for the state. In a conversation with Viveat Susan Pinto, Peter Betzel, chief executive officer and chief sustainability officer, Ikea India, throws light on the retailer's way forward. Edited Excerpts:

Ikea has said that it proposes to target 100 million customers in two years from Mumbai, Delhi-NCR and Bengaluru. But with the Mumbai flagship launched only now is this achievable? Bengaluru and Delhi-NCR properties haven't even been launched so far...

The strategy for India will be omni-channel retail. Mumbai is the first city where this strategy is being unveiled through a combination of large-format, smaller stores and an e-store. This will be taken to Bengaluru and Delhi-NCR. In Hyderabad, we have a flagship store and an e-store in place. In Pune, we have an e-store right now. The point is as you make yourself accessible to more people through various touchpoints, the 100-million number can be achieved.

Speaking about online, what has been the response to your e-stores in Mumbai, Pune and Hyderabad?

Total visitors online across Pune, Mumbai and Hyderabad is over 35 million, since August of 2019. The online potential is huge and the pandemic has only accelerated the growth of digital platforms in India. We are exploring where e-stores can be taken and how convenience can be improved for customers.

 

Ikea had set aside Rs 10,500 crore for the India market, of which over Rs 7,000 crore has been utilised so far. Will you line up more investments since you propose to expand your presence in the country?

India is a priority market for Ikea. It will be among the top five markets for us in the future and we remain committed to it for the long term. Investments will be made in line with the commitment we have for the India market. Also, we would like to grow responsibly and in a sustainable manner in India. With a population of 1.3 billion, we see enormous potential for home furnishings and furniture in India. The omni-channel approach we are taking here is something we are very excited about.

Is it a concern that stores are taking time to launch? The Navi Mumbai store has been delayed by over a year?

India is a market of potential, but it is also an emerging market with challenges of its own. We were aware of these when we decided to enter the Indian market (in 2012) and have navigated through these challenges over the years. Our first store opened in Hyderabad in 2018. Our second store is opening now in Navi Mumbai and more stores will follow in Bengaluru and Delhi-NCR. In Gurgaon, we are exploring a mixed-used possibility with an Ikea store and Ingka shopping centre. We are looking at the same model in Noida. We have also identified the site for development of our Bengaluru Ikea store and the two city-centre or smaller format stores in Mumbai will come up in the next 12 months. So work is on in full swing in India.

 

What is your strategy for smaller towns and cities. These centres have shown a consumption uptick through the pandemic?

Online is one way of targeting smaller towns and cities. But I will go back to the omni-channel approach I indicated earlier. It allows us to consider many more possibilities of reaching potential customers. It also gives consumers the convenience to order at home or visit our stores. The scope widens with an omni-channel retail approach and that is an exciting proposition in my view.

Will you set up a design centre in India, since it is a key market for you?

We have our design centre in Sweden. Having said that, there is a lot of localisation that we are doing in terms of sourcing from local suppliers, incorporating local tastes when designing products. We have specifically kept affordability in mind as far as Indian consumers are concerned. Mumbai, in particular, is space-constrained and our designs have factored these aspects in, so that it is not only comfortable, but also looks neat in terms of looks.