Ikea, the Swedish home furnishings retailer, opened the doors of its Hyderabad store, its first in India, to customers at 10 am on August 9, which will be followed by online presence, store and touch point in Navi Mumbai in 2019. The company aims to expand its presence in other cities with more than 25 touch points like Ahmedabad, Surat and Pune by 2025.
Ikea got FDI approval of Rs 10,500 crore in 2013 that allowed 100% FDI for single brand retailers and Rs 1,000 crore (140 million Euros) investment per store in India. So far, the company has spent around half the amount. A press note by Ikea states, “As we see big opportunities in India we believe that we will increase market investment as we continue our expansion in India in the future.”
Jesper Brodin, CEO, Ikea Group, said, “Today is a proud moment as it marks a major milestone in a journey that started more than 30 years ago when Ikea partnered with local manufacturers in India. We have a long-term commitment to India, which is an important market for us. We bring an inspiring, affordable and convenient home furnishing offer and we are more than ready to meet and understand the needs, frustrations and dreams in the everyday lives of our customers in India.”
Ikea has set a goal to reach 200 million people in the next three years with the foundation for a strong and relevant offer is affordability and accessibility. 1,000 products will be priced below Rs 200.
In India, Ikea has invested Rs 20 crore for a 2.7 lakh sq. ft. distribution centre in Pune on leased land in partnership with IndoSpace Industrial Park and will further invest Rs 100 crore in the distribution centre. The company has acquired four land sites in first-priority markets, Telangana, Maharashtra, Karnataka and Delhi/NCR, and is looking for other sites in various cities.
The Hyderabad store is 4,00,000 sq. ft. 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 Ikea store in Hyderabad will offer ideas, inspiration and solutions. It will exhibit two 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 will house a 1,000-seater restaurant, Ikea’s largest and possibly India’s largest restaurant, a café that will offer coffee, bakes, frozen yogurt and many more for purchase, a kids’ play area called Småland where customers can leave their children safely. The Ikea restaurant will offer 50% Swedish specialities like salmon and chicken and vegetarian meatballs and 50% 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.
Peter Betzel, CEO, Ikea India, said, “At Ikea the people, the community and our contribution to safeguarding the health of the planet is the biggest priority. Over the last five years Juvencio Maeztu and the team here have laid a very strong foundation and a solid base for Ikea to be successful. I thank all our friends in India, including the government and officials, for all the support and partnership to make this dream a reality.”
In terms of the products, the company will be bringing its classic Ikea range along with a small percentage of locally relevant products for the Indian market like masala boxes, pressure cookers, tawas, idli makers, colourful sheets and mattresses made with coconut fibre centre. Customers will also be able to buy global classics like the Billy bookcase, Klippan sofa, Lack table and Poäng armchair among others.
Each store will have between 800-1,000 co-workers. About 1,500 indirectly engage in services, etc., which makes a total of about 2,300 employees per store. It will be a mix of internationally experienced co-workers and locally recruited. The company is committed to have 50% women managers and co-workers in its organisation at all levels.
Welcoming the people of Hyderabad, John Achillea, Ikea, Hyderabad Store Manager, said, “I am excited to throw open the doors of the first Ikea India store to the people of Hyderabad and its neighbouring community. Telangana has given us a lot of love over the last few years and now we hope to witness the people of Hyderabad truly enjoying our store that has been built with love. I thank the local officials who have made this day possible. The biggest value we bring is to the many people who have big aspirations for their homes and thin wallets. Our promise is one of value, of quality and of making the everyday life better at home for all of the many people in the state and beyond.”
There are currently 403 Ikea stores in 49 countries with a sales volume of 38.3 billion euros. 936 million customers visited Ikea stores in FY17 and more than 2.3 billion people visited Ikea online.
Ikea has been sourcing from India for over 30 years for its global stores. In India, it currently has more than 50 suppliers with 45,000 direct employees and 400,000 people in the extended supply chain.