After studying Indian market for over a decade, Sweden-based furniture giant has opened its first store for people in Hyderabad’s Hitec City on Thursday.
The 400000 square feet outlet has around 7500-8000 products. Knowing the price-sensitive nature of Indian buyers, it has been offering about 1000 products in a price range below Rs 200.
Ikea plans to open 25 stores in India by 2025.
The outlet features products from pillows to spice jars. To keep catering to local demand, the company is getting many products such as carpets, pillows and mattresses from local manufacturers.
It has added around 150 assemblers to its first store and tied up with UrbanClap, for providing home services.
Based on its decade of research, Ikea expects a majority of sales in India to come from the living room and kitchen categories, said company’s country sales manager, Christian Kampe.
Inside the store has a massive 1,000-seater restaurant, which will serve customers a wide range of food items consisting of staples from Swedish and Indian cuisine, according to its site.
After launching in Hyderabad, IKEA plans to open the second store in Mumbai during 2019, followed by Bengaluru and Delhi NCR.
In 2012, the world’s largest furniture retailer first announced its India plans with an initial investment of Rs 10,500 crore.
In these years, Ikea has also talked with state governments including Telangana, West Bengal, Karnataka and Maharashtra for sourcing wood for furniture. The company has also expressed desire to invest Rs 4,000 crore in Maharashtra over the next 2-3 years.
The furniture firm will also deploy Rs 2,000 crore to open up two new stores in West Bengal. It will also hire 15,000 co-workers in India in next 7-8 years, of which half would be women.
IKEA had also emphasised earlier that in the next five years as much as 30 per cent of products it sells in India will be sourced locally.
The company has identified 49 Indian cities where it wants to set up physical stores. IKEA hopes to ground itself firmly in India’s furniture retail sector
In India, it will face competition from Urban Ladder and Pepperfry, who offer furniture through a mix of online and offline channels. Entry of Swedish furniture firm in the homeware and furniture market will raise the competition as well as the bar for local players.
According to a Redseer Consulting report, the home furniture industry is a $25 billion market altogether, of which $250 million is online.
IKEA has 403 stores around the world. At present, it has stores in 51 countries.