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.

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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.

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