IKEA plans to double Indian market by end of 2020

World’s largest furniture retailers IKEA is in plans to double its sourcing in India by 2020. The Swedish retailer giant plans to open 25 stores in India by 2025 with an investment of Rs 10,500 crore. The company is also in the process of identifying sites in Delhi-NCR, Bengaluru, Tamil Nadu and Gujarat.

Henrik Gunnerling, purchase development manager, IKEA range and supply, said: “IKEA works on the principle of optimal sourcing for our global markets. Where it makes sense, we will source locally as well. We currently source products worth €318 million from India and will almost double this by 2020 to around €600 million. Maharashtra will be one of the key markets for us, and we have plans to open 5-6 stores across the state, going forward.”

IKEA will be hiring 500-700 direct co-workers and another 1,500 will be engaged in providing services from the stores. They are about 50 suppliers from India in product segments such as textiles, mattresses, and kitchen accessories.

IKEA is also in the process of scaling up its online business in many countries, including India. Additionally, it is scouting for property in Mumbai for launching ‘Hej Homes’, which may also act as its omnichannel retail format.

The world’s largest furniture retailer got India’s approval five years ago to set up stores as part of the government’s single-brand retail policy. Ikea will bring to the country its sustainable supply chain, which will include the sourcing of recyclable raw material.

According to India’s retailing policy, foreign companies have to meet the 30% local sourcing norm, preferably from SMEs. The Swedish company’s first two stores in India would be in metro cities of Hyderabad and Navi Mumbai, and both are expected to open in 2018. Ikea had already purchased 23 acres in Mumbai last year to set up its store. The Navi Mumbai store will have over 9,500 home furnishing products and an in-store restaurant.

Sandeep Sanan, new business manager, purchasing operations for Ikea South Asia,  said:“We are looking for new suppliers and also to give them assistance to grow their business. Many new suppliers will come from other segments who are looking to diversify their business.”

IKEA plans to double Indian market by end of 2020
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