Swedish furniture major IKEA has begun work here on its first retail store in India, to be developed with an investment of about Rs. 700 crore.
While it scouts for land to set up more stores and partners to expand sourcing, its first store is expected to be ready by mid-2017. With a built-up space of about 4 lakh sq ft, the store is expected to feature over 7,500 home furnishing products apart from a 1,000-seater restaurant.
IKEA is planning a chain of stores in India over the decade. The aim is to set up 25 stores by 2025. The company had earlier indicated at an investment outlay of Rs. 10,500 crore.
“While IKEA has begun its India journey with the foundation for a store in Hyderabad for its retail presence, we have been sourcing products over the years from India and expect to ramp up sourcing as we spreads our wings,” said Juvencio Maeztu, Chief Executive officer of IKEA India.
Addressing the media after the ground breaking ceremony here, he said: “This is a big milestone and the first store in India seems close to reality now. We hope to bring our unique home furnishing products and solutions along with modern retail experience. We have committed to hire 50 per cent women in our workplace.”
Mumbai site
The company has also acquired a large site in Mumbai for a store and is in the process identifying sites in other cities including Bengaluru and Delhi.
IKEA has been sourcing products from India for the past 30 years and expects to grow this as it expands its retail presence in the country. It aims to double the global sale of products sourced from India — from the current level of €300 million — over three-five years.
It is a long drawn process to build a network of suppliers who meet IKEA standards. But once they become part of the network, their products are sold across IKEA stores globally, Maeztu explained.
Asked about the time frame for setting up stores in India, he said: “We have bought land for Mumbai and are looking at other locations. In a couple of years, we will be able to develop at least two-three stores per year and possibly more. The objective is to set up as many stores as possible.”
“While IKEA will bring a number of new and innovative products at affordable prices, its presence in India will make it a better IKEA,” Maeztu said.