To expand its wings in India, Swedish home furnishing major Ikea is all set to launch its first warehouse in Pune’s Chakan area. The company will invest Rs 100 crore in the warehouse to double its distribution centre for the online venture.
The 3.3 lakh sqft warehouse will meet the distribution needs of the Ikea’s upcoming stores in Mumbai, Gurugram, and Bangalore. It has a plan to open 25 stores across the country.
The upcoming stores will focus on India-specific products including tawas, roti-makers, idli-makers, and pressure cookers.
Swedish furnishing retailer has already opened its first experiential centre Ikea Hej Home in Hyderabad, where products are not for sale but for display. The Home highlights what the retailer stands for and what to expect from upcoming IKEA stores.
The company also plans to bring Hej Home to other Indian cities as well.
The 74-year-old company is not new to India. Its purchasing organisation has been sourcing from the country for over 30 years. It currently works with 48 suppliers in India and does business worth €315 million largely sourcing textiles, along with some metal, plastic, lighting and decoration products.
Currently, it has 300 members team in India, which it plans to expand it to 900.
At present, there is a slew of companies including Urban Ladder and Pepperfry that offer furniture through a mix of online and offline channels. Entry of Ikea in the homeware and furniture market will raise the competition as well as the bar for local players.
So far, Urban Ladder has raised $95.2 million and clocked an operating revenue of Rs 42 crore in the fiscal year 2016-17, a 22 per cent growth from the previous fiscal. Another player, Pepperfry, which has raised $195 million so far, clocked a total revenue of Rs 127.5 crore in FY17, a 30 per cent higher than the previous year.
According to a Redseer Consulting report, the home furniture industry is a $25 billion market altogether, of which $250 million is online. However, by 2020, the home furniture industry is supposed to be worth $35 billion, with $700 million of it being online.
The development news was first reported by The Times of India.