Swedish furniture retailer Ikea will tweak its range, design and some styles to suit local tastes for its proposed Indian retail venture, a senior company official said on Wednesday at the India Retail Forum in Mumbai.
“We don’t know yet what our plan is. At this point, there are many questions to be solved,” said Juvencio Maeztu, Ikea’s recently appointed India head, who has spent the past few months visiting several homes in the country. The company has a lot of “learning and understanding” to do in India, he said.
Ikea was among the earliest international retailers to announce plans for India after the government in January allowed 100% foreign direct investment (FDI) in single-brand retail. It plans to invest Rs.10,600 crore in India.
The retailer completed the submission of documents to the government recently after the resolution of concerns over mandatory sourcing requirements with the government easing conditions related to that.Maeztu said the company in India will stick to the large-size store formats that it has overseas and look at taking a holistic approach for long-term partnership development in the country.
A typical Ikea store is of 30,000 to 1 million sq. ft. and does business of about Rs.700 crore a year on average, according to Abheek Singhi, head, retail and consumer sector, at Boston Consulting Group.
“Ikea will be a game-changer as they open stores away from the city and will attract consumers to come and spend the day there,” said Singhi.
Such large stores, he said, can’t come up in the main city area and probable locations would be the Mumbai-Pune expressway, the National Capital Region belt and the Bangalore-Mysore belt. “We like big stores as we don’t sell products, but solutions. So we want everything under one roof,” Maeztu said.
Ikea’s top agenda for India is to make its products affordable, he said. “We are obsessed with low prices.”
Via : LiveMint