HomeBUSINESSIkea's new strategy: Small outlets, mega stores, online channel soon in India

Ikea’s new strategy: Small outlets, mega stores, online channel soon in India

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Swedish furniture retailer IKEA is planning to open small city outlets along with its mega standard stores in India supported by an online channel. The company will tweak its strategy in the wake of changing consumer behaviour, according to a senior company official as quoted by news agency PTI.

In 2013, the company received the government’s approval for its 10,500 crore investment in opening its stores in India. It had envisaged setting up 10 furnishing and homeware stores as well as allied infrastructure in over 10 years in the country. Simultaneously, it planned to open 15 more stores here.

So far, IKEA has set up three mega format stores in Hyderabad, Mumbai, Bengaluru, and two city centers in Mumbai.

In an interview with PTI, IKEA CEO Susanne Pulverer said that the company’s expansion plans in the country had slowed down a bit during the Covid-19 pandemic, but the company is also learning from the first market it has opened.

She said that the organization needs to be close to where people are, hence, smaller formats are relatively big for the Indian retail market.

There will also be Omni channel along with the smaller formats where people can come, plan, and get service for home decor, she said, adding that IKEA is still in the investment phase of its approved FDI and further investments have not been lined up although the furniture retailer is committed to the Indian market in the long term.

“According to us, we will have many stores and an Omni channel in India because we see that is the future. The combination, and how many, what year, I am not ready to share all this information yet. We are still working on these plans. We want to go physical and online together,” she said as quoted by PTI. 

Speaking about her online sales, she said that the current combination of the online channel to the overall sales is around 30%, having increased during the Covid-19 pandemic and staying high.

Currently, IKEA is offering products online through the website or application to its customers in Bengaluru, Hyderabad, Mumbai, Pune, Ahmedabad, Surat, and Vadodara.

IKEA operator to invest over 7,000 crore in India

Ingka Centres, part of Sweden’s Ingka Group which also runs Ikea retail stores, said that it will invest €900 million (about 7,266 crores) to build two mega shopping centres in the Delhi-NCR.

The company also broke ground for a €400 million ( 3,500-crore) Ingka Centre in Gurugram, which will be built by the second half of 2025. This will be followed by a similar centre in Noida.

The 1.7 million sq. ft Gurugram centre will house an Ikea store, other retail outlets for global and local brands, edutainment activities, a food park, and 320,000-sq ft commercial office space, spread over nine floors, the company said. The Ikea store will be spread across 250,000 sq ft and offer more than 9,000 home furnishing products. The company is targeting an annual footfall of 20 million at the Gurugram store.

The Noida centre, however, will take some time to develop, the company said, without giving a timeframe.

Ingka Centres operates 45 shopping centres in 15 countries to cater to the needs of 370 million visitors every year with products from more than 3,000 brands.

 

 

 

 

 

 

 

 

 

 

 

 

 

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