Swedish furniture giant IKEA is gearing up for its next round of investment in India after successfully fulfilling its commitment of Rs 10,500 crore made a decade ago, according to Susanne Pulverer, the CEO of IKEA India. The company entered the Indian market in 2013 and began its retail operations in August 2018 with the opening of its first store in Hyderabad.
IKEA’s current focus is on projects in the Delhi-NCR region, which are slated to open in 2025 and will complete the committed investment for the initial 10 years. Pulverer stated, “With the projects in NCR, we have exhausted the Rs 10,500 crore, and we are looking at the next level of investment to further build IKEA presence in India, to expand volumes and increase sourcing.”
In 2013, the Indian government approved IKEA’s Rs 10,500 crore Foreign Direct Investment (FDI) proposal to set up 10 stores with allied infrastructure over a decade. At present, 100% FDI is permitted in single-brand retail trading through the automatic route.
Susanne Pulverer shared that the decision on the scale of the next investment would be taken by IKEA’s parent company, Ingka Group. She expressed the intention for the next round to be “big and bold” considering the growth potential of India. Pulverer emphasized India’s dynamic market, driven by young consumers upgrading their lives and investing in their homes.
While IKEA is currently operating stores in Hyderabad, Mumbai, and Bengaluru, it is investing around Rs 7,000 crore to enter the National Capital Region with two stores in Gurugram and Noida. Pulverer hinted at the possibility of expanding to other cities such as Lucknow and Chandigarh in North India, with a particular focus on markets in the South and West regions.
The IKEA India CEO also revealed plans to increase sourcing from Indian markets for global retail operations. While currently sourcing around 33% of retailed products locally, IKEA aims to grow this percentage, leveraging India’s potential to supply other IKEA markets. The focus will be on categories like textiles, plastics, metals, stainless steel, mixed materials, handicrafts, bulky furniture, and local production of wood-based furniture.
Pulverer highlighted the importance of sustainability and affordability for Indian consumers and emphasized IKEA’s commitment to increasing the percentage of locally sourced products. In terms of online sales, IKEA India witnessed a significant uptick, with one-fourth of its sales generated through online platforms like its app and e-commerce portal. The company continues to explore avenues for growth and expansion in the Indian market.