The Swedish homecare major IKEA, that sells ready-to-assemble furniture, kitchen appliances and other home accessories, is betting high on India.
The company that started in Almhult, Sweden by Ingvar Kamprad in 1943 has recently opened its maiden India store in Hyderabad. It will have its second large format store coming up in Mumbai in 2019 and soon after that its third store is expected to be ready in Bangalore. IKEA on October 11th will hold a ground breaking ceremony near Nagasandra Metro Station on Tumkur Road for its store in Bangalore.More stores are in the pipeline for Delhi, Ahmedabad, Surat, Pune, Chennai and Kolkata. IKEA which has a presence in over 40 countries around the world has a mandate to reach 49 Indian cities with over one million population by 2030.
The company said it would explore a multichannel strategy in the country that comprises of large format stores, digital sales and experiential stores. It is also planning to open multiple small format stores of 1,000-5,000 square meters. IKEA is also in dialogue with several leading realty players, architects and interior designer firms to strengthen its B2B business.
The Swedish firm said India would be a significant contributor to its global online sales---which is currently in the 10% range---and it expects online share to go up to 25 to 30% in some time. The $40 billion revenue IKEA is already a familiar brand among Indian techies and other professionals who travel around the world on work, business and leisure
Patrik Antoni, Deputy Country Manager, IKEA India said, ``In India, the important thing for us is to meet the customer's demand of reaching to us. Previously, we used to meet the customers only at the store. With the digital platform, we will be able to interact with the customers more time than a store visit.’’
IKEA’s Hyderabad store offers 7,500 products of which 95% of them are global offerings while 5% are India-centric. It houses IKEA’s largest restaurant in the world. The store has already reported over a million footfalls since its opening in August.IKEA globally has over 1,000 suppliers---60% from Europe, some 30% from China and 6 to 8% from Americas---and 50 of them are in India.
``The retail business is changing across the world. The markets like Europe are our mature market and our legacy is doing physical stores. For us India we are really new and that gives us the advantage to try new things. In the country, we can move much quicker towards the modern way of retail. So we want to start both offline and online together,’’ said Antoni.
The company has its distribution hub in Pune. To boost its digital sales, it is currently in discussions with various delivery partners. It already roped in UrbanClap for assembly of the products sold online.
The size of India’s furniture market is estimated to be around $10 billion. Over 80% of it is in the unorganized sector. IKEA will be competing with players like Urban Ladder, Pepperfry, and Walmart-owned Flipkart to capture a slice in the home furnishing market.