The Swedish Are here
IKEA opens doors to its first store in Hyderabad, India, within this year after being in India for 30 long years.
The Indian furniture market has remained fragmented & dominated by small individual furniture shops and unorganized segments of furniture carpenters. The absence of organized furniture retail was filled in to some extent by e-commerce players like Pepperfry, Flipkart and Amazon to some extent. But, with the Swedish furniture giant, IKEA it is all set to enter the Indian furniture segment. India seems to be gearing up for a major transformation. Founded by Ingvar Kamprad in 1943, IKEA today has sprawling stores in 412 locations in over 40 countries. But, the company’s India journey had not been so smooth. IKEA India for around 30 years has been sourcing products from India for the company’s stores worldwide. In an attempt to establish its retail presence in the country, the company first applied to open a store in 2006, but was frustrated by rules forbidding foreign companies from operating retail stores without a local partner. It was only with Indian government allowing 100 per cent foreign ownership of “single-brand” retail outlets, that IKEA again floated it India retail store plans bloomed again, and this time with success. IKEA stores globally have vast space demands and to achieve the same scale in India, it needed to consider no less than 5-6 acre of land for each store. The company’s upcoming 400,000 square feet store in Hyderabad, Telangana, is the result of assistance of local state government. The Telangana government made the process simple by explaining the regulations and assisting the company in purchasing land. The application of GST made sourcing and transportation easier which allows IKEA to keep their range affordable and offer customers more value for their money. The company has also acquired property to set up a 100,000 sq. ft. warehouse to ensure immediate delivery of orders and a national contact centre. IKEA plans to stay in India for the long-term and has expanded its supplier base to assist the new stores in the years to come. Post its Hyderabad launch, IKEA is expected to set up shop in Mumbai followed by Benagaluru and Delhi NCR. The company is also considering establishing its presence in the markets of Surat, Ahmedabad, Kolkata, Chennai and Pune.
According to IKEA Deputy Country Manager Patrik Antoni, india will be IKEA’S most testing markets, as consumers are unaccustomed to spending much money on furniture and shopping is mainly done at small, family-owned stores.