IKEA set to open first India store on Thursday

Irving Hamilton
August 9, 2018

Swedish retail giant Ikea has put all its might behind the company's first store in India opening in Hyderabad.

The MNC, which had outlined an investment plan of Rs 10,500 crore when it secured FIPB permission for 100 per cent FDI, had mentioned about setting up 25 stores.

Hyderabad, India, is home to a 16th-century mosque, several ornate palaces. and soon, the world's largest IKEA cafeteria.

Speaking to India Today, Peter Betzel, CEO, IKEA India said that the company thanked the Telangana government for its tremendous support.

While India offers faster growth than Singapore, Japan, South Korea and other developed markets in Asia, its market is constrained by high poverty levels, income inequality, and relatively low per-household expenditure on homewares and home furnishings, Euromonitor's Adiraju said. Mumbai is slated to be the next city to welcome Ikea in early 2019 followed by followed by stores in Bengaluru and Delhi.

He said the company would also have an online channel for its customers and set up small format stores within cities in order to provide IKEA experience.

It will offer 7,500 affordable, good quality, value for money home furnishing products, all under one roof. "For us, the community is a very important priority".

Ikea, which reported revenues of $39 billion in 2017 globally, exports €350 million of product from India and has 50-plus suppliers.

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Plot size of 8-11 acres for store to be set up.

According to E&Y, retail is a $650 billion-dollar industry with only 10 percent of it being organised.

The store will employ more than 900 people, 150 of whom will work on assembling furniture - a break from IKEA's do-it-yourself model.

Another driving force for Indians when they pick furniture is the pricing and durability. "Ikea is globally game-changing business". "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". Pepperfry has raised $197 million while Urban Ladder has raised $106 million till now.

The Founders of Urban Ladder, meanwhile, told YourStory that they "welcome competition and it's good for the Indian economy".

GlobalData forecast compound annual growth rate of almost 11% over 2016-2021 in India's furniture and home-improvement market, reaching ₹ 4.97 trillion.

Ikea's arrival in India is being watched by other global retailers with a hawk eye.

Initially deterred by since-amended legislation that required foreign single-brand retailers to operate stores with a local partner, the Swedish giant began construction on the Hyderabad complex about two years ago. Indians are habituated to buying fully assembled and done up furniture - something Ikea is not known for. The consumer, it seems, is truly king!

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