IKEA TO INVEST RS 5,500 CR IN UP, SIGNS MOU
The Swedish furniture retailer will invest ₹5,500 cr in Noida shopping centre
LUCKNOW : The state government on Friday signed an MoU with the world’s largest furniture and home appliances Swedish company, IKEA, which will invest Rs 5,500 crore in the state in the next five years.
The MoU was signed virtually in the presence of CM Yogi Adityanath, said the state government in a statement. The company has already paid Rs 850 crore for land in Noida.
NEW DELHI: Sweden’s Ikea group will open a mall in Noida, its first shopping centre in India, with the furniture store as an anchor client, at a cost of ₹5,500 crore, stepping up its investments in India amid the pandemic.
On Friday, the Swedish furniture retailer said it purchased a 47,800 sq. m plot in Noida to develop Ingka Centres. The shopping centre is part of the Ingka Group, which also includes Ikea Retail. The group runs 46 such shopping centres across the world. The company didn’t say when the Noida project will be completed.
“India is an exciting and dynamic market, and today’s acquisition is a key milestone in our strategic vision to transform the business in response to the changing retail environment. Millions of people live within easy reach of Noida, and we want to build emotional connections with them,” Cindy Andersen, managing director, Ingka Centres, said in a statement. The Swedish furniture retailer has two standalone large format stores in India. Ikea opened its first store in Hyderabad in 2018 and the second one in Navi Mumbai last year. In addition, shoppers in
Pune, Mumbai and Hyderabad can also buy its products online. Its Navi Mumbai store was developed with an investment of ₹1,500 crore. Ikea plans to open two smaller format stores in Mumbai over the next one year.
“The new development (in Noida) is expected to create more job opportunities, support infrastructure development and growth of the organized retail and home furnishings sector in the region,” the retailer said.
Ingka Centres are always anchored around an Ikea store
and house restaurants and other retail stores. These centres are developed under trademarks such as MEGA in Russia and LIVAT in China.
“Delhi-NCR is one of our most important markets in India, and we will reach many people with our beautiful, affordable, well designed and sustainable home furnishing products. This next step in our expansion is in line with Ikea’s ambition to meet 100 million people in India in the coming years,” said Peter Betzel, chief executive of Ikea India.
The retailer has also bought a plot in Gurugram, Haryana, with the intention of building a shopping centre, two people aware of the retailer’s plans said on the condition of anonymity.
Ikea wants to expand across several formats in India.
Analysts said the Indian furniture market is highly unorganized, allowing large retailers a ready market to develop experiential centres.
“The Indian retail story is all about the fact that there is nobody like IKEA in India. The market is largely unorganized
and fragmented. Secondly, they obviously know that they have a clear advantage because of the lack of quality shopping malls in India. They have the big anchor format to draw footfalls,” said Pankaj Renjhen, chief operating officer and joint managing director at real estate consulting firm Anarock Retail.
For the year ended 31 March 2020, Ikea India Pvt. Ltd reported a 63% jump in revenue at ₹665.6 crore, according to data shared by business intelligence platform Tofler. Its loss stood at ₹720.7 crore.