Ikea to invest over US$463m in Maharashtra

The Dutch-Swedish furnishing company, which has been present in the country for around 30 years, aims to establish multi-format stores in the Indian state along with innovative experience centres.

February 22, 2018

IKEA India currently sources products worth more than US$388 million every year and plans to double its India sourcing in the near future to meet its global needs.

IKEA is aiming to open its first Indian store in Hyderabad later this year as part of a broader strategy to launch 25 stores across India over the next eight years.

The company, which plans to start selling its products online in India from 2019, will also start operating its first physical store in Maharashtra, in Navi Mumbai.

A typical IKEA store is spread on a plot size of 8-11 acres (about 4 football fields) and offers about 9,000 products and employs around 400-700 co-workers directly.

IKEA plans to invest more than US$463 million in establishing multi-format stores and innovative experience centres in the Indian state of Maharashtra, according to media reports citing Patrik Antoni, the company’s deputy country manager. The massive investment comes as part of the Dutch-Swedish furnishing company’s expansion in India. Although IKEA has been sourcing its raw materials from India for around 30 years, it entered the retail space fairly recently, encouraged by the Central Government’s investor friendly FDI and retail policies and regulations. The investment will boost India’s manufacturing sector, while supporting the expansion of supply chain and skill development.

A typical IKEA store size spans over 350,000 sq ft, built on a plot size of 8-11 acres (about 4 football fields) and offers about 9,000 products. Each store employs 400-700 co-workers directly and around 2,000 indirectly. IKEA India, part of the IKEA Group, currently sources products worth more than US$388 million every year, for IKEA stores worldwide. The company plans to double its sourcing from India in the next few years to meet its global and Indian needs. IKEA works with 48 suppliers in India, engaging more than 45,000 direct co-workers and about 400,000 co-workers in its extended supply chain. This provides lucrative opportunities for job creation, manufacturing and foreign investment.

The company, which plans to start selling its products online in India from 2019, will also start operating its first physical store in Maharashtra, located in Navi Mumbai around the same time. IKEA is aiming to open its first Indian store in Hyderabad later this year as part of a broader strategy to launch 25 stores across India over the next eight years. IKEA is already investing around US$116 million in opening its distribution centre, besides expanding its sourcing to sustainable materials such as bamboo, jute and coir. IKEA’s total investment plan for the Indian market is estimated at around US$1.6 billion. The company has been the world’s largest furniture retailer for nearly a decade.