“The investment numbers will come together with the expansion plans. We are trying to nail it down and will be able to announce it in the coming months,” said Antoni.
The Ingka Group, of which Ikea is a part, had secured Indian government approval in 2013 to invest Rs 10,500 crore in the first phase.
Ingka Group is investing more than Rs 7,500 crore in developing an Ingka Centre each in Gurugram and Noida, featuring office and retail spaces, in addition to an Ikea store. The Gurugram and Noida centres are slated to open in 2026 and 2028 respectively.
“Between these two projects, we have exhausted the investments, and we are looking at the next round,” said Susanne Pulverer, country retail manager and chief sustainability officer, IKEA India. Ikea opened its first store in Delhi, at Pacific Mall in Tagore Garden, spread over 15,000 sq ft. Retail consultancy firm SRED was the transaction advisor for the deal.“We are seeing a lot of interest from global brands to expand presence of physical stores in India. While online presence is important, for segments like furniture and home Improvement, look and feel brings more new customers,” said Shriram PM Monga, cofounder of retail consultancy firm SRED.
The company has experimented with various store sizes and feels city stores are important for accessibility.
“It’s an evolvement. Ikea has experimented since 2015 with various formats,” said Antoni. “Now we believe that the format we are opening now is the right format. We have this format in other cities and countries as well. Now we have the possibility to roll out more.”
Ikea will also continue to open large format stores in India’s major cities.
“But they have to be complemented with stores that are close to where people need them. In each big city, we should aim to have a full-size Ikea store,” said Pulverer.
She emphasised that the Hyderabad store “is very big but maybe it can be a little bit smaller in size.” “We have learned now, people cannot travel across the city to one store, we need to be where people are,” she said.
Ikea first set up shop in India in 2018 under the single brand retail policy of the Indian government, which requires it to locally source at least 30% of the items sold at its outlets in the country.
“We source around 30%, but with the ambition to go up to 50% but it is a long term thing that we need to work together with sourcing and to give its time,” Pulverer said.
The company also intends to grow exports from India.
Currently, Europe is Ikea’s biggest production hub, with at least 60% of the products sourced from the region, about 30% from China, and 10% from other countries.
“Ikea is all about being affordable, and that is driven by our abilities to source locally,” said Antoni. “We will work a lot over the coming months in line with the expansion plan; we are growing our market, volumes, and we can also grow the local sourcing, and this will help us to get at the lower price point that can be affordable for more people. This is the key for us to drive the volumes.”