Capital View: Ikea plans mega presence in Delhi to boost growth

The company will enter the NCR market via Ingka Centre which will come up in Gurugram.

The centre is a mixed use retail destination which will be anchored by a large format Ikea store and is expected to come up within 3-4 years.

Besides, the company plans to have an omnichannel approach which will have a combination of "big and small stores" as well as an online presence.

In conversation with IANS, Ikea India's CEO Peter Betzel, who also acts as the company's Chief Sustainability Officer said: "We have bought land in Gurugram and Noida and in parallel looking for suitable locations in Delhi."

"We should be able to announce the timelines (for Delhi and Noida projects) in the near future."

The home furnishings brand had opened its first physical store in 2018 in Hyderabad followed by the second one at Navi Mumbai in 2020, and recently, expanded its omnichannel presence through the launch of the 'IKEA App'.

Notably, it made an 'App' entry in Bangalore and several cities in Gujarat, including Ahmedabad, Surat, and Baroda.

"We are looking forward to open our first city store in Worli, Mumbai within this year."

At present, the company is present in Mumbai, Pune, Hyderabad, Bangalore, Ahmedabad, Surat and Baroda.

"India remains one of the important growth markets for the Ingka group. We have the ambition to meet more than 200 million people by 2025."

"We have been able to move forward with our omnichannel expansion in India. We have had to operate under strict guidelines and with restrictions sometimes but our projects have not been impacted."

On the pandemic's business impact, Betzel cited that more and more customers are shopping online.

"We have been strengthening our online presence in new markets and also introduced many online services such as 'Click & Collect', home furnishing consultancy, remote planning amongst others."

"Consumers are also looking for more affordable solutions... Consumers are thinking twice about every spend. During this time. Ikea has been able to lower prices for many of its products for the benefit of the customers."

On the other hand, he poited out the brisk buiness conducted by the conducted during the festive season.

"Demand for home furnishing has been getting better and will improve even further as the pandemic situation improves. Especially during this festive season, we have seen a lot of customers spending money on what they need for themselves and their families."

"We will also see an emergence of smart buying where customers will plan their shopping in advance and only purchase things that they need. With a likely decline in consumer spending in discretionary categories, value for money and affordable solutions will be a preferred option for consumers."

In addition, Betzel said that so far 23 per cent of the company's products sold in India are locally sourced and this has been achieved within the first three years of store operations.

"The ambition is to increase sourcing from India up to 50 per cent in the coming years to create more affordable products for our customers, reduce carbon footprint and grow the manufacturing sector in India."

"This will enable lower prices for our customers but also help create more jobs, enhance skills, keeping costs low while reducing the environmental impact."