Recently appointed India CEO of Swedish furniture firm Ikea, Patrik Antoni said that the company has exhausted its initial investment of Rs 10,500 crore and will soon announce the next phase of investment.
Ikea is looking at Chennai and Pune as the next market for large format store, for which it will require the investment, in the meantime, it will continue to open city stores, which will be smaller in size.
“The investment numbers will come together with the expansion plans. We are trying to nail it down and will be able to announce it in the coming months,” said Antoni.
The Ingka Group, of which Ikea is a part, had got the Indian government’s approval in 2013 for Rs 10,500 crore investment.
Company’s large centres will become operational in Gurgaon in 2026 and in Noida in 2028.
“Between these two projects, we have exhausted the investment and we are looking at the next round,” said Susanne Pulverer, Country Regional Manager and CSO Ikea India
Ikea has opened its first store in Delhi at Pacific Mall in Tagore Garden, spread across 15,000 sq ft.
Retail consultancy firm SRED was the transaction advisor for the deal.
“We are seeing a lot of interest from global brands to expand presence of physical stores in India. While online presence is important, for segments like furniture and home Improvement, look and feel brings more new customers,” said Shriram PM Monga, cofounder of retail consultancy firm SRED.
Company has experimented with various store size and feels city stores are important for accessibility.
“It's an evolvement, Ikea has experimented since 2015 with various formats. Now we believe that the format we are opening now is the right format. We have this format in other cities and countries as well. Now we have the possibility to roll out more,” Antoni said.
Ikea will continue to roll out large format store in big cities.
“But they have to be complimented with stores that are close to where people need. In each big city, we should aim to have a full size Ikea store. Hyderabad store is very big but maybe it can be a little bit smaller in size. We have learned now, people cannot travel across the city to one store, we need to be, where people are,” said Pulverer.
The company set up shop in India 2018 under the single brand retail policy of the Indian government, which requires it to locally source at least 30% of the items sold at its outlets here.
“We source around 30%, but with the ambition to go up to 50% but is a long term thing that we need to work together with sourcing and to give its time,” Pulverer said.
Company also intends to increase the export from India.
Currently, Europe is the biggest production in the world, with at least 60% of the product are sourced in Europe, about 30% in China and 10% in other countries.
“Ikea is all about being affordable, and that is driven by our abilities to source locally. We will work a lot over the coming months, in line with the expansion plan, we are growing our market, volumes and we can also grow the local sourcing, and this will help us to get at the lower price point that can be affordable for more people. This is the key for us to drive the volumes,“ said Antoni.
The company is investing more than Rs 7,500 crore in developing two Ingka Centres in Gurgaon and Noida that will have office and retail space in addition to the Ikea store.
Ikea is looking at Chennai and Pune as the next market for large format store, for which it will require the investment, in the meantime, it will continue to open city stores, which will be smaller in size.
“The investment numbers will come together with the expansion plans. We are trying to nail it down and will be able to announce it in the coming months,” said Antoni.
The Ingka Group, of which Ikea is a part, had got the Indian government’s approval in 2013 for Rs 10,500 crore investment.
Company’s large centres will become operational in Gurgaon in 2026 and in Noida in 2028.
“Between these two projects, we have exhausted the investment and we are looking at the next round,” said Susanne Pulverer, Country Regional Manager and CSO Ikea India
Ikea has opened its first store in Delhi at Pacific Mall in Tagore Garden, spread across 15,000 sq ft.
Retail consultancy firm SRED was the transaction advisor for the deal.
“We are seeing a lot of interest from global brands to expand presence of physical stores in India. While online presence is important, for segments like furniture and home Improvement, look and feel brings more new customers,” said Shriram PM Monga, cofounder of retail consultancy firm SRED.
Company has experimented with various store size and feels city stores are important for accessibility.
“It's an evolvement, Ikea has experimented since 2015 with various formats. Now we believe that the format we are opening now is the right format. We have this format in other cities and countries as well. Now we have the possibility to roll out more,” Antoni said.
Ikea will continue to roll out large format store in big cities.
“But they have to be complimented with stores that are close to where people need. In each big city, we should aim to have a full size Ikea store. Hyderabad store is very big but maybe it can be a little bit smaller in size. We have learned now, people cannot travel across the city to one store, we need to be, where people are,” said Pulverer.
The company set up shop in India 2018 under the single brand retail policy of the Indian government, which requires it to locally source at least 30% of the items sold at its outlets here.
“We source around 30%, but with the ambition to go up to 50% but is a long term thing that we need to work together with sourcing and to give its time,” Pulverer said.
Company also intends to increase the export from India.
Currently, Europe is the biggest production in the world, with at least 60% of the product are sourced in Europe, about 30% in China and 10% in other countries.
“Ikea is all about being affordable, and that is driven by our abilities to source locally. We will work a lot over the coming months, in line with the expansion plan, we are growing our market, volumes and we can also grow the local sourcing, and this will help us to get at the lower price point that can be affordable for more people. This is the key for us to drive the volumes,“ said Antoni.
The company is investing more than Rs 7,500 crore in developing two Ingka Centres in Gurgaon and Noida that will have office and retail space in addition to the Ikea store.
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