Globally renown Swedish furniture maker IKEA has appointed Peter Betzel as the new Chief Executive Officer (CEO) for its India business.
IKEA is planing to open its first store in Hyderabad around June this year (mid-2018). After the Hyderabad store, the firm plans to open the second store in Mumbai by 2019, followed by Bengaluru and Delhi NCR.
Peter Betzel, who has been known for his leadership and man management skills will take the lead in IKEA’s expansion in the company. India is marked as one of IKEA’s most important growth markets and the company has earlier committed Rs 10,500 crore investments, which might go up, to India.
“I will be working with the local teams to bring in a unique global shopping experience offering good quality and affordable home furnishing products to a diverse set of consumers across the country,” said Betzel in a statement. Prior to leading Germany, Peter was the Country Manager of IKEA Spain.
In India, IKEA, which claims to spent almost more than six years understanding the market, aims to sell what it thinks the local market needs, offering pressure cookers alongside its iconic Billy bookcases. IKEA after finding through a survey that only one in four Indians would opt to transport and assemble furniture on their own is planning to offer after-sales services including delivery and assembly. The company is setting up small training centres for assembly close to its India stores.
It is also thinking about tailoring stores to cities, to open 25 stores by 2025. The reason for the modification is to reach more customers by opening smaller stores closer to their residences in India’s space-constrained cities.
Besides, Swedish furnishing retailer has already opened its first experiential centre Ikea Hej Home in Hyderabad.
At present, IKEA has close to 400 co-workers in India and plans to have 15,000 co-workers by 2025, of which 50 percent will be women. It is recruiting 500-700 co-workers for each store.
In February, IKEA said it plans to invest Rs 3,000-4,000 crore in Maharashtra over the next 2-3 years. It has also been talking with state governments including Telengana, Karnataka and Maharashtra for sourcing wood for furniture.
The company has 403 stores around the world. IKEA has the presence in 51 countries.
Billionaire IKEA founder Ingvar Kamprad, who died aged 91 in Jan this year, founded IKEA in 1943. The retailer is now heading for 50 billion euros ($62 billion) in annual revenues.
Competitors in India
At present, there are 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, 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.