Swedish home furnishing retailer IKEA opened its fifth store in India on Thursday and its third outlet in Mumbai, spread across 72,000 square feet. In 2019, the company started its ecommerce services in the country followed by a store launch in Navi Mumbai in 2020.
Only last month, IKEA launched a 460,000 square feet store in Bengaluru. The company has allocated investments of Rs6,000 crore for Maharashtra and Rs3,000 crore for Karnataka. For the Indian market, the Swedish firm plans to invest Rs10,500 crore.
Though the company has only five stores in India currently, the Ingka Group, IKEA’s parent company, sees the country as a ‘growth market’. It is likely to set up its next outlet in New Delhi. Susanne Pulverer, chief executive officer & chief sustainability officer at IKEA India, speaks to Forbes India about the company’s expansion plans. Edited excerpts:
Q. What has been the response from the Indian market?
We’ve got a great response from India so far… it has been extremely welcoming. The common factor between our core and India is the love for home and family. When we opened our Bengaluru store or the Mumbai outlet, we saw that many people were waiting for us to open [a store], which is great. Our vision to offer affordable home furnishing solutions aligned well with the Indian market.
Q. How is the Indian market different from other global markets?
What is important for India—as it is for all markets, but even more so here—is to be affordable, provide value and quality for the money spent, be accessible and support customers with additional services. Looking at the market conditions here, we have tried to keep prices as low as we can. We are working on sourcing a lot more locally, which would reduce imports of products and help reduce prices further. Additionally, our best friend is volumes… so the more we grow, the more we can work on lowering prices further.
Q. You have partnered with players like Urban Company for furniture assembly. Is this an India-specific service?
In the past, when IKEA started to grow out from Sweden to other countries, there was a clear message—you do your part and we’ll do ours. It’s a win-win situation… we can keep lower prices and distribute our products in flat packages, which is also more sustainable. Over time, however, we realised that life has become a lot more hectic for people world over and additional services are in need. Hence, services like assembling products or home deliveries are important, not just for India, but also globally.
Q. IKEA is rapidly expanding in terms of its offline presence in India. Are people leaning more towards physical stores now?
Post the pandemic, people are eager to come to our stores. We are happy about it because that’s when you get the best IKEA experience. The model and concept for our India stores are similar to those globally. However, if you look at the rooms and homes showcased here, they have been inspired by lifestyles of people in each city. We have incorporated traditions and habits to showcase how apartments would look like, making solutions relevant for people. For instance, if you go to the Mumbai store, the homes on display there would be a little different than those in Bengaluru or Hyderabad.
Q. For a few years now, IKEA has been sourcing products from India. Any plans to expand deeper in existing segments and also explore more segments?
We have been sourcing from India for over 40 years. Traditionally, the core products from India have been textiles, carpets and smaller home furnishing accessories. The company is working with 12 local suppliers in Maharashtra for food and home furnishing products. But now, we are looking at other segments such as locally produced mattresses, sofas and wooden-based furniture. This will require some more investment, so it is slightly in the longer term.
In terms of design as well, though a majority of designs across the globe for IKEA remains the same, there are some local adaptations we’ve made. We are trying to work closely with social entrepreneurs in India, using their unique designs that are developed and produced here. Hopefully, if they work well, we could look at exporting them to other markets too.
Q. What are IKEA’s expansion plans for India?
Though India only has five IKEA stores now, it is one of our biggest growth markets. Our next big project is in New Delhi. The Ingka Group is looking at building up a massive shopping centre with an IKEA store.