Designing homes for small budgets – IKEA

Designing homes for small budgets – IKEA

FPJ BureauUpdated: Thursday, May 30, 2019, 12:21 PM IST
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IKEA worldwide built its business based on the mission of offering a wide range of good quality home furnishings at affordable prices. Founded in Sweden in 1943, IKEA today has stores in 27 nations and generates a turnover of Euro 28.7 billion. IKEA has been present in India for close to three decades with a sourcing bank of 50 suppliers.

It is the first major single brand retailer to be given FDI approval to set up retail operations in India. Patrik Antoni, Deputy Country Manager of IKEA India speaks about their plan in Indian market to Pankaj Joshi.

Where does IKEA see India operations by 2020 – in terms of locations, revenue estimates and contribution to IKEA’s global turnover at that time?

India is a long term market for IKEA. IKEA plans to open 25 stores by 2025 with a total of 1.5 billion euros investment. We are set to open our first store in Hyderabad by the end of 2017. We have bought land in Mumbai and continue looking for suitable locations in the prioritised cities of Delhi NCR, Karnataka, Maharashtra and Telengana. We believe that an IKEA store will be good for India and the states where we open as we will make a positive impact on the local economy, through GDP, taxes and employment, the manufacturing sector and contribute towards gender equality and diversity. IKEA India has committed to employ 50 per cent women at all levels in the organisation. It is too early to project revenues at this point.

How does IKEA see Indian market evolve from its current shape and size?

The full IKEA concept will be offered in India. The size of each IKEA India store will be at par with global IKEA stores. The Hyderabad store will be 40,000 sq. metres with an expected footfall of 4 million visitors a year; and employing 500-700 co-workers directly in the store and another 1500 indirectly or its services. Our service offer in India will be very strong because Indian customers have a strong service mind-set and services like delivery and assembly will be part of the offer. Like in other parts of IKEA, we will offer an Omni channel shopping experience in India.

What would be the bedrock points of IKEA’s sales strategy here?

We believe in democratic design that brings to life the IKEA vision– ‘To create a better everyday life for the many people.’ IKEA believes in offering products that fulfil all five aspects of what we call ‘democratic design’. Democratic design is the unique IKEA approach to home furnishing design – it is products designed to combine good form, good function, low price and sustainability. India is the most heterogeneous country in the world; every state has its unique speciality and characteristics. We look at India as a combination of multiple countries and each state is unique in terms of the diversity it offers and the different living situations. It is a great opportunity for IKEA to connect with the many people in India and offer relevant, affordable home furnishing solutions to create a better life at home. We are now doing home visits and many researches in the different cities to create a relevant offer.

How critical is India as a supply source for IKEA?

IKEA has been sourcing from India for 30 years for its stores around the world. Today we source products in India for approximately Euro 315 million every year, with the aim of doubling it in the next few years to meet our global and Indian needs. We work with 50 suppliers in India, engaging 45,000+ direct co-workers and approximately 4, 00,000 co-workers in our extended supply chain. We see potential to make India a major manufacturing and sourcing hub for our global market. We are very strong in textiles today and aim to diversify in other existing categories such as metal, plastic, lighting and in new categories like wood and sustainable locally available materials such as bamboo, jute, acacia etc.

Most of the range on offer in IKEA India stores will be the global range with few locally adapted products like the cookware. The presentation of the range will be adapted to reflect local living situations to make it as relevant to Indian customers as possible

What are IKEA’s views on the omni-channel utility debate?

Like in other markets, IKEA will adopt an omni channel approach, allowing customers to have various touch points and shop the way they want, offline or online. Convenience for customers comes first. Globally, we are on a journey to become a leading multichannel home furnishing retailer. IKEA Group is increasing its focus on integrating physical and digital commerce to enable customers to shop in ways that suits their needs. In addition, IKEA Group opened 12 new stores and 19 pickup and oder points during the last year, an effort that will be supported by developments of a flexible distribution network, ensuring accessibility and convenience for customers.

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