Swedish home furnishing brand Ikea has drawn up a long-term plan to open 25 stores in the country.
The company had been sourcing products from India for 28 years but it is yet to open its first store in the country. At Rs 500 crore for each store, Ikea’s investment in 25 stores could be Rs 12,500 crore.
In July 2015, the company had bought 13 acres of land in Hyderabad for its maiden store. On September 24, Ikea signed a memorandum of understanding with the Uttar Pradesh government for three stores in Lucknow, Agra and Noida. Similar agreements have been signed with the state governments of Telangana, Maharashtra and Karnataka.
“Our priority is to find the right locations for our stores, to increase our supplier base, and establish long-term relations with the authorities and other important partners. In the first phase we are looking at establishing Ikea stores in Delhi-NCR, Mumbai, Bengaluru and Hyderabad,” a company spokesperson told Business Standard in reply to an emailed questionnaire. On the growing organised home furnishing market in India, the spokesperson said Ikea would have a positive impact on the sector.
“Ikea will provide affordable, quality products with good designs for many homes in India,” the spokesperson said. Ikea has 360 stores around the world with a network of 50 suppliers. It works with women artisans in some villages of Varanasi to produce handmade products. Besides, Ikea Foundation has been working on social projects in the carpet belt for 15 years.
“Uttar Pradesh has an enabling policy environment and the government has been very supportive. We are optimistic about the business opportunities in the state. It is one of our priorities states for retail and sourcing expansion,” the spokesperson added.