IKEA brings big-box shopping to India

The store, set up with an investment of Rs 1,000 crore, employs 950 people (called co-workers) directly and 1500 indirectly in services.

By E Kumar Sharma  
Thursday, August 9, 2018

IKEA, the world's leading Swedish home furnishings retailer has entered the Indian market with the launch of its first store in India at Hyderabad.

It is a landmark moment for IKEA after it got FDI approval in 2013 that allowed 100 per cent FDI for single brand retailers in India. IKEA has been sourcing from India for its global stores for more than 30 years. It today has close to 60 suppliers from India and in this 15 have been additions in the last two years across 10 new product categories going beyond textiles. IKEA, according to the company officials, has been sourcing from India for the last 30 years and in value terms crossed the 350 million euro mark, which is about 2,500 crore.

It plans to open stores in over 40 cities across the country, starting with Mumbai, Bangalore and New Delhi. Responding to a question from Business Today on key take away from India for the Swedish giant, Jesper Brodin, CEO, IKEA group said, it was really around affordability of the products it offers while ensuring its highest quality standards and those lessons it would want to bring to practice in its future roll outs in other parts of the country and abroad.

Peter Betzel, CEO of IKEA India, told Business Today that while the store was a blue and yellow box and huge in scale and size, like how it is globally, from the outside, it brought local flavour and products that suit Indian needs. These are for small and functional kitchens or bedrooms and dining spaces. Our surveys into some 1,000 Indian homes, he said, revealed that many people live out of small spaces and would like increased functionality and multifunctionality with clever storage spaces. That plus, meeting local needs like those for an idly - maker or a steam cooker, have all been looked into here. 

The store is 4,00,000 sq. ft. large and is spread over 13 acres in the heart of Hyderabad's tech hub HITEC City and promises to be a 'fun day out' for the family. It will offer 7,500 affordable, good quality, value for money home furnishing products, all under one roof. The store will remain open 365 days from  10 am to 11 pm each day.  

The IKEA store in Hyderabad will offer ideas, inspiration and solutions. It will exhibit 2 full homes that reflect life at Home in Hyderabad, besides different room sets based on different parts of the home like bedroom, kitchen, children's room and living room. It will also have a market hall where you will find home kitchen utensils and accessories, textiles, rugs, lighting, decoration, stationary and even live plants.

The store houses a 1,000-seater restaurant, IKEA's largest and possibly India's largest restaurant, a cafe which will offer coffee, bakes, frozen yogurt and many more for purchase, a kids' play area named Smaland where customers can leave their children safely. The IKEA restaurant will offer 50 per cent Swedish specialities like salmon and chicken and vegetarian meatballs and 50 per cent local delicacies like biryani, samosas, dal makhni in the case of Hyderabad. The food will be very affordable, for example a plate of samosas will cost Rs 10. The IKEA store is to offer as many as 1,000 products priced below Rs 200!

IKEA's goal, says Betzel, is to reach 200 million people in the next 3 years. The store, set up with an investment of Rs 1,000 crore, employs 950 people (called co-workers) directly and 1500 indirectly in services and is expecting to host 7 million visitors each year. Next year, it also plans to start e-commerce so that customers in other locations can also start buying IKEA products.

IKEA India HR head Anna - Carin Mansson says IKEA has a non-negotiable commitment to hire 50 per cent women co-workers at all levels in India including forklift drivers and assembling co- workers. It will also come with a strong and affordable service offer including delivery and assembly to help customers who are not familiar with the DIY (Do it yourself) concept just yet!

There are currently 403 IKEA stores in 49 countries accounting for sales of 38.3 billion euros.  The first IKEA India store in Hyderabad this year, will be followed by the Navi Mumbai store in 2019. IKEA has four land sites in Telangana, Maharashtra, Karnataka and Delhi-NCR and apparently is continuing to look for more in other major cities.

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