IKEA is bullish about the growth of its children range and expects this segment to witness 100 per cent growth in next few years.
Kavitha Rao, Country Commercial Manager, IKEA shared that the children segment is a big focus for the company and it reflects in the company’s stores and website also. Currently, this segment contributes 6 to 8 per cent in company’s revenue, which can further grow by 10 to 12 per cent in coming years.
Apart from the home furnishing range, currently, the company is sourcing only soft toys from India as soft toys have been India’s strength on the backdrop of textiles.
At the same time, the retail giant is also exploring the other possibilities that exist in toys for IKEA’s children range. It is also looking at accessories for the children.
In the recently concluded Toy fair, IKEA also explored new manufacturers. Notably, 5 large-scale top manufacturers are in touch with IKEA with regard to starting the supply of toys.
On IKEA’s expansion and sourcing strategy in India, especially regarding the toys, Kavitha believes that as far as the number or volume of cotton toys is concerned, it is too early to say anything as it’s in the early stage of discussion with the manufacturers.
However, she added that the company would like to achieve the target of 30 per cent of local sourcing in the toys segment also. And it can be achieved as an ecosystem for the same is taking shape in terms of quality standards and as well as allowing multiple suppliers to scale and space.
As of now, the company has focused on sourcing toys from India for its Indian stores only, but there is enough possibility that it would scale the Indian sourcing for its global stores.
The company is also motivating social entrepreneurs through various channels and wishes to source as much as possible from India.
Sourcing textile products from India for the last 35 years, IKEA has achieved significant success in this regard. Therefore, there is enough probability that IKEA will have its significant sourcing from India.
Currently, it has stores in Hyderabad and Mumbai while the Bengaluru store is under construction. Similarly, Delhi is also on the radar of the company – not to mention its continual focus on digital business, which continues to grow.
The company recently bought a 48,000-square-metre plot in the city of Noida on the outskirts of Delhi and would develop the new site into a mall anchored by an IKEA store. It has planned to invest nearly 55 billion rupees (US $ 759 million) in the Noida project.
