By 2015, you may be able to shop at an IKEA store in India. The euro 25-billion Swedish furniture major is expected to set up its first two-three stores in India within three years of getting government approvals, it is learnt.
These stores, to be modelled on the international format, would be spread over 100,000 sq ft area or more, a source aware of the developments told Business Standard. An IKEA senior management team is currently in India scouting for real estate across the country.
Likely to be located on the outskirts of cities as shopping hubs, the places being explored are around Delhi, Mumbai, Bangalore, Hyderabad and Chennai. Quite like what you find in other international cities, the ones in India would be complete with a cafe, restaurant, library and nursing stations.
After the first two-three stores come up, another 10 were expected within the subsequent five years and 15 more over the five years after that, the source said. When asked by when the first IKEA store could come up in India, a company spokesperson said, “This is too early to say. Once our application is approved by the Government of India, we will be able to share more information about our intentions to establish retail operations.”
However, typically, the process takes “at least four to five years after our decision before we see the first store in a new country,” she added. This can differ from country to country. The IKEA proposal had mentioned the company had a vision of establishing 10 stores over a 10-year horizon and around 25 over a longer period.
IKEA is not required to file a fresh application even as the government has revised the single-brand retail norms. The company will give its reply to the 10-odd questions ranging from brand ownership to the sourcing requirement that the department of industrial policy & promotion had asked after the company submitted its proposal on June 22. The reply will be sent through law firm Titus & Co once the government notifies the revised single-brand norms, it is learnt. Titus, which represents IKEA in India, had filed the application for IKEA Trading India Pvt Ltd with the Foreign Investment Promotion Board way back in 1995. Since then, IKEA Trading has been responsible for sourcing products from India for exporting to other markets.
IKEA sourced $450 million worth of products from India for sale in international markets in 2010. Of that, $383 million worth of products were from micro, small and medium enterprises.
