Ikea will sell in India through experience centres, small format stores too

Swedish home furnishing retailer Ikea will be adopting a multi-channel approach for the Indian market as its first India store in Hyderabad gets ready to start retailing in the coming months.

The aim, according to top company executives, is to create a better shopping experience for its affordable home furnishing products and solutions.

Patrik Antoni, deputy country manager, Ikea India, said that the multi-channel approach will make its products more accessible and enable customers to experience and buy them at their convenience.

"These multiple touch-points will include the conceptual large format Ikea stores, experience centres and small format city-centre stores in the future," said Antoni, adding that customers will also have the option of buying Ikea products online starting 2019.

Ikea has already acquired four land parcels in the states of Telangana, Maharashtra, Karnataka and Delhi/NCR and continues to look for more in other major cities. The home furnishing major with 403 stores across 49 countries is likely to open its second India store at Turbhe, Navi Mumbai in Maharashtra sometime in 2019.

The Maharashtra operations, according to Ikea India, will be led by Per Hornell, who joined as the head of Maharashtra market in March 2017 after a global stint with Ikea. While leading and develop a long-term direction, he will also be responsible for successful implementation of multi-channel retailing in the state.

"Maharashtra is a key market for Ikea and the state will see investments of between Rs 3,000 and Rs 4,000 crore in the long term. These funds will largely go towards setting up multi-format stores and experience centres across Mumbai. We are also investing Rs 750 crore in setting up the first Ikea-owned distribution centre (DC) in Pune over the next two-three years. There is already a warehousing facility operational in Chakan that will serve all Ikea stores in India for the time being," said Hornell.

The retailing and DC operations, according to Ikea, will create many jobs. Each store is expected to engage 2,000 co-workers (800 directly employed and 1,200 indirectly in services).

As for its sourcing footprint in Maharashtra, Ikea currently has 11 suppliers in categories such as textiles, including carbon steel, metal and plastic, and is looking for new suppliers to expand into new categories.

According to Hornell, the company is looking at collaborating with the state government and partners to source local sustainable raw materials such as bamboo, jute, rubberwood, banana barks, coir, water hyacinth, etc.

Scheduled for a mid-2019 launch, the Navi Mumbai store is located near the Turbhe train station and is spread over 430,000 square feet. With an investment of over Rs 1,000 crore, the store will employ 800 direct co-workers in addition to creating 1,500 indirect employment. Offering close to 1,500 car park units, the company is expecting approximately four million visitors per year at the store that will offer a range of 9,500 products.

MANY AVENUES

• The customers will also have the option of buying Ikea products online starting 2019
   
• The aim is to create a better shopping experience for its affordable home furnishing products and solutions