IKEA India CEO Plans New Investments to Expand Presence in India

IKEA India, the Swedish furniture retailer, is gearing up for new investments to further expand its presence in the Indian market. After successfully utilizing its initial commitment of ₹10,500 crore over the past decade, IKEA is now looking to make additional investments to fuel its growth in the country. Exhausting the Initial Commitment and Planning for the Future IKEA India CEO Susanne Pulverer stated that the company has completed its committed investment of ₹10,500 crore, which was used for setting up stores and infrastructure projects in the National Capital Region (NCR). However, IKEA is now strategizing its next level of investment to continue building its presence in India, expand its volumes, and enhance sourcing capabilities. Store Network and Exploring New Locations Currently, IKEA operates stores in Hyderabad, Mumbai, and Bengaluru. It is in the process of investing around ₹7,000 crore to establish two new stores in Gurugram and Noida in the NCR. In addition to these expansions, IKEA is considering entering other cities such as Pune, Chennai, and Kolkata in a step-by-step approach. The company aims to tap into the growth potential of these markets and seize the opportunities they offer. Focus on South and West India, with Potential for Pan-India Presence With an omnichannel approach, IKEA is concentrating on the markets in South and West India. However, the upcoming stores in Delhi-NCR have prompted the company to explore expansion possibilities in other cities as well. While Pune and Chennai have piqued IKEA's interest, Kolkata is also on the company's radar. However, the expansion plans beyond the NCR are still in the formulation stage. Increasing Local Sourcing and Diversifying Product Range IKEA India is working towards increasing its sourcing from local markets to support its global retail operations. While the current export of furniture from India remains relatively small, IKEA sees tremendous potential in exploring regionalized and global sourcing from India. The company aims to diversify its product range and focus on specific categories such as textiles, plastics, metals, handicrafts, bulky furniture, and local production of wood-based furniture. Strategic Outlook and Optimism for the Indian Market IKEA India has a positive outlook on the Indian market, considering it as a dynamic and opportune market for growth. With India's projected growth in the coming decade and the rising aspirations of young people investing in their homes, IKEA sees immense potential in the country. The company is committed to sustainability, affordability, and meeting the evolving needs of Indian consumers. Online Presence and Sales Performance In line with the digital transformation in the retail industry, IKEA India has expanded its online presence and witnessed significant growth in online sales. Currently, one-fourth of its sales in India come from online platforms, including its own app and e-commerce portal. The company has also introduced convenient services such as Shop By Phone assistance and doorstep delivery in additional markets across India. Financial Performance and Future Prospects IKEA India's sales for the financial year ending on March 31, 2023, reached ₹1,768 crore, reflecting a 61% increase. However, the company reported a loss of ₹1,134 crore due to its expansion into new markets and investments in infrastructure. Despite the initial challenges, IKEA India remains optimistic about the future and is confident in its ability to succeed in the Indian market.