Ikea: Will double India-sourcing and launch 2nd store in Maharashtra
The Dollar Business Bureau
Senior officials from Ikea have shared that the Swedish furniture-maker will double its India-sourcing from 318 million euros to 600 million euros by 2020. The company will also be commencing work on setting a second store in Navi Mumbai at an investment of Rs. 700 Cr.
The company has purchased 23 acres in Navi-Mumbai to set up a store measuring 4.3 lakh sq ft. Once completed by mid of 2018, the store will stock nearly 10,000 products. A typical Ikea store spans 3.5 lakh square feet, ideally a plot size of 8-11 acres. So, there is space for more development on the Navi Mumbai store.
Ikea in 2015 envisaged an investment of Rs. 1,800 Cr for 2-3 stores each in Maharashtra, Telangana, Karnataka, and NCR in Delhi. Of these, the one in Hyderabad will be the first to go live, followed by Navi Mumbai and then the remaining two. The company had also commented previously that it would infuse 1,500 Cr for 25 stores across India.
Maharashtra Industries minister Subhash Desai had signed the first agreement in 2015 and shared that Ikea’s India foray would lend a fillip to the make-in-India campaign as well boost Ikea’s exports by 30-40% by leveraging from Mumbai’s entry and exit ports, thereby creating more jobs. Each Ikea store ideally provides employment to 700 direct workers and 1500 in providing services around the store.
Currently, the company works with 48 suppliers in India but will grow as operations pick up steam. Each store employs 400-700 co-workers directly and 2000 indirectly. Each store would generate abundant potential for Ikea’s exports and sourcing business line.
A company official commented in a news report that the company was confident of opening more stores across Maharashtra, especially a distribution centre in Pune.
Ikea was the first major group to be awarded FDI approval for retail operations in India. According to its official website, it intends to open several stores across India with a priority to find the right locations with metro connectivity and access to public transport.