IKEA plans to source wooden toys from local makers
SWEDISH furniture major IKEA is looking to scale up sourcing of toys from India for its operations in the country, a top company official said.
The company, which sources only cotton-based soft toys from India, is also exploring expansion in categories such as wooden toys, said IKEA India country commercial manager Kavitha Rao.
IKEA, which took part in the India Toy Fair (February 27-March 4), said it was mulling partnering with other players in the toy segment. Rao said, “We feel there is a great opportunity for us to come together with some potential suppliers. We acould be a large buyer; of course, it is contingent on meeting standards and design thoughts.”
“IKEA has a fairly large range of over 1,000 products as part of its children’s range, which contributes around 6-8 per cent currently, and we aim to reach 10-12 per cent in the near future.”
Besides toys, the range includes beds and mattresses for children, ergonomic storage and seating solutions.
Besides cotton, IKEA said it saw an opportunity to source wooden toys for its stores. “If you look at our range, we do have a range of wooden-based toys. So, if we had the opportunity to source some of that from India, we would definitely like to explore it,” Rao said.
IKEA sources its raw material (for wooden toys) from sustainable sources.
Recently, the Indian government created eight toy clusters with significant investment. “It is a great approach because it will also give us the opportunity to look at possibilities for sourcing toys locally, from within India as well,” Rao said, adding that “this is a huge initiative and a big focus area for us”.
IKEA said it was working on sourcing locally in categories such as furniture, mattresses and sofas, besides textiles.
Under India’s current foreign direct investment rules for single-brand retailers, a local sourcing requirement of 30 per cent of the value of goods is mandated. This can be met as an average during the first five years, and thereafter annually towards its Indian operations.
In August 2019, the government amended the provision by adding that all procurements from India by a singlebrand retailer for that brand should be counted towards local sourcing, irrespective of whether the goods procured