With two stores in pipeline, IKEA plans Rs 2K Cr investment in West Bengal

Swedish retail giant IKEA is planning to invest Rs 2,000 crore to open up two new stores in West Bengal.

A senior official of the company has promised to invest Rs 1,000 crore for each store that will open in the state, said a letter written to the state CM Mamata Banerjee.

West Bengal is one of the key markets and the company likes to start working in the state for establishing Ikea's expansion plans. "Each Ikea store in your state will be an investment of Rs 1,000 crore and generate employment of 800 directly and 1,200 jobs indirectly," PTI quoted Ikea's letter to Banerjee.

IKEA top official including CEO Patrik Antoni and the company's country expansion manager David McCausland have requested for an appointment with the West Bengal CM.

Besides in February, IKEA said it is planning 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 Telangana, Karnataka and Maharashtra for sourcing wood for furniture.

Last month, the Swedish company appointed Peter Betzel as the new Chief Executive Officer (CEO) for its India business.

IKEA is planning to open its first store in Hyderabad June this year (mid-2018). It has already opened its first experiential centre 'IKEA Hej Home' in the state capital. After opening up its first store, the firm plans to open the second store in Mumbai by 2019, followed by Bengaluru and Delhi NCR.

India is marked as one of the company's most important growth markets and has earlier committed Rs 10,500 crore investments.

Presently, it 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.

So far, the company has 403 stores around the world and has the presence in 51 countries.

In India, companies such as Urban Ladder and Pepperfry also 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.

Urban Ladder has till now 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.