Ikea to chalk out €600-mn sourcing plan for India
Swedish furniture retail giant, Ikea, is planning to double its sourcing from India, from the current 300 million euro to about 600 million euro (approximately Rs 4,470 crore) in the next three to four years, according to its India Chief Executive Officer Juvencio Maeztu.
To open 700-crore store at Hyderabad, its first in India, by November 2017
Hyderabad: Swedish furniture retail giant, Ikea, is planning to double its sourcing from India, from the current 300 million euro to about 600 million euro (approximately Rs 4,470 crore) in the next three to four years, according to its India Chief Executive Officer Juvencio Maeztu.
The production-oriented company, with global revenues of euro 31.9 billion in FY2015, has been sourcing goods from India for the last 30 years for its global stores. In India, it currently has 50 suppliers with 45,000 direct employees and 400,000 people in the extended supply chain.
“We are planning at adding more products sourced from India to our basket, even as we are looking at having an e-commerce presence here, going forward,” he told reporters on Thursday.
Ikea will be opening its first store in India at Hyderabad in autumn (October-November) 2017, involving an investment of Rs 700 crore. The store, coming up on the company’s 15-acre site at Hitec City in Hyderabad, will hire 500 direct employees and another 1,500 engaged in providing services around the store, of which 50 per cent will be women.
“The store, which will be about 400,000 sft large, will host over six million customers every year, offering close to 7,500 well-designed, beautiful home furnishing products, besides a 1,000-seat restaurant serving Swedish and Indian dishes,” Maeztu said.
Stating that the company, in cooperation with UNDP and Xynteo, has launched the Hyderabad chapter of its skill-building programme Disha with the commitment to train one million women from India in the next 10 years, he said Ikea would participate as a partner and would employ women from this programme of its store operations.
The Hyderabad store is part of Ikea’s larger plan to open 25 single-brand retail stores in India over the next 10 years. The company, which currently operates 328 stores in 28 countries, has already received the Foreign Investment Promotion Board (FIPB)’s approval to invest Rs 10,500 crore in India.
“We have already acquired a large piece of land in Navi Mumbai, while we are in the process of identifying sites in Bengaluru and the National Capital Region (NCR) for setting up stores,” he said, while declining to draw any short-term timelines.
Responding to a query, Maeztu said the Goods and Services Tax (GST) would improve efficiencies and allow companies to pass on cost benefits to the consumers. “It (GST) creates confidence and builds trust in the business communities. It will benefit businesses and consumers alike,” he said.