Swedish home furnishing multinational IKEA is all set to enter India with its first store in Hyderabad, this month. After the southern city, the company plans to widen in the country with more outlets in Delhi/NCR, Maharashtra and Karnataka. Precisely, the giant will move to Mumbai for its second store in 2019 followed by Bengaluru and Gurugram.
With an initial investment of Rs 10,500 cr IKEA will be instrumental in increasing the local sourcing for their products, as part of its rapid expansion plan. Peter Betzel, CEO, IKEA India, said, “In India, retail deserves to have an industry status as I see many opportunities here. The market has enormous potential with growing economy, increased manufacturing and sourcing from the country.” He further informed, “In the coming years we will have 15000 employees with 50 per cent women in the workforce. Currently, we have 1500 employees.”
IKEA is determined to increase local sourcing to be more affordable and to reduce import. “Our long-term goal would be to source more than 50 per cent of our products locally. FDI norms in India mandate 30 per cent value of all products to be sourced locally within five years of operations. We are on our way to around 19 per cent,” said Peter. Currently the giant works with approximately 60 suppliers and source textile, rugs and mattresses along with metal and lightning products.
IKEA is being betted upon to consolidate the unorganised home furnishing market of India. Working with 300,000 framers producing BT cotton in India the giant is sourcing many products like the bedspread, coir rugs for decades. They have also made a special collection for India called, Ursprungllig, as a tribute to the textile industry.
