Ikea opens first Indian store at Hyderabad

The Dutch-Swedish furnishing company, which has been present in the country for around 30 years, aims to open more than 25 stores by 2025; Currently, IKEA operates over 400 stores in nearly 50 countries, 14 opened in 2017

August 9, 2018

The Hyderabad outlet, set up at an investment of over US$145 million, is spread across 400,000 sq ft. The outlet will have around 7,500 items on offer, besides housing a 1,000 seater restaurant

The company, known for its utilitarian and affordable designs, has reduced the pricing on a large number of its products by sourcing locally in order to effectively compete in the Indian market

To power the Hyderabad operation and attend to an expected 7 million annual visitors, IKEA has hired 950 direct staff, around 50 per cent women, and about 1,500 indirect employees

After Hyderabad, IKEA’s next Indian store is scheduled to open in Mumbai in mid-2019, to be followed by Delhi and Bengaluru. The company is eyeing customer base of 200 million by 2021

On August 9 IKEA, a Sweden-based furnishing company, opened its first Indian outlet at Hyderabad in the south Indian state of Telengana. The outlet, set up at an investment of more than US$145 million, is spread across 400,000 sq ft. The outlet will have around 7,500 items on offer, besides housing a 1,000 seater restaurant. The company, known for its utilitarian and affordable designs, has reduced the pricing on a large number of its products in order to effectively compete in the Indian market. To do so, the company has relied on sourcing a number of its products and raw materials locally. As a result, nearly 1,000 products on IKEA’s Indian shelves will be priced below US$3. To power the Hyderabad operation and attend to an expected 7 million annual visitors, IKEA has hired 950 direct staff, around 50 per cent women, and about 1,500 indirect employees.

Back in 2013, IKEA had announced an initial investment of US$1.5 billion for its Indian unit, so far the company has spent around half of that budget. As the company opens more outlets in Delhi, Mumbai and Bengaluru, that investment is expected to increase. While the Hyderabad outlet is IKEA’s first retail operation in India, the company has been present in the nation for over 30 years, sourcing many different products for IKEA stores worldwide. Currently, the company sources products worth about US$365 million every year, with the aim of doubling it in the next few years to meet global and Indian needs. IKEA works with 48 suppliers in India, engaging more than 45,000 direct coworkers and about 400,000 coworkers in its extended supply chain. IKEA’s activities is in Iine with the Government’s initiative to draw foreign investment and create jobs.

After Hyderabad, IKEA’s next Indian store is scheduled to open in Mumbai in mid-2019. The company plans to invest more than US$460 million in establishing multi-format stores and innovative experience centres in western state of Maharashtra. The company said that it had acquired locations in its first-priority markets – Telangana, Maharashtra, Karnataka and Delhi NCR – as it continues to look for places in other regions. It is targeting a customer base of 200 million in India by 2021. IKEA aims to set up more than 25 stores by 2025, including new locations such as Chennai and Kolkata, Ahmedabad, Surat, Pune. Eventually, the company aims to open retail outlets in more than 40 Indian cities. Currently, IKEA operates more than 400 stores in nearly 50 countries, 14 opened in 2017, with total store visits of over 935 million and sales of around US$44.4 billion last year.

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