Swedish retailer Ikea on Thursday said the company is looking to offer the lowest price possible in the Indian market and products could start from as low as `200, as the retailer plans to cater to customers across segments.
Swedish retailer Ikea on Thursday said the company is looking to offer the lowest price possible in the Indian market and products could start from as low as Rsc 200, as the retailer plans to cater to customers across segments. However, there will be impact of higher customs duty announced in the 2018-19 Budget, which has been doubled to 20% from the earlier 10%, said Patrik Antoni, deputy country manager, Ikea India, at a conference here. The increase in price will be passed on to customers. “End of the day, any increase in price will be passed on to customers, which will impact them and is neither good for us or them,” said Antonio, adding that once the retail stores are operational in the country, the company will source more from here. Experts said once Ikea enters the market, it will be a game changer and the furniture segment will get more organised. Further, the company plans to focus on last-mile delivery and assembling, which Indians like. “Indian furniture market continues to remain dominated by the unorganised players, but the scenario will change and there will be a lot of transformation after a player like Ikea enters the market,” said Rajat Wahi, partner, Deloitte India.
Ikea plans to invest around Rs 3,000-4,000 crore over the next five years in Maharashtra, and its investments in the country would exceed Rs 10,500 crore initially announced in 2013, said Antoni. Company officials said after analysing the markets in India, they have realised that the investments will be higher than they announced earlier. “Initially when we entered the country, Ikea informed the government of investments of Rs 10,500 crore by 2025. In Mumbai itself, we plan to invest around Rs 3,000-4,000 crore in the next five years and further investments in other parts of the country will definitely exceed our earlier planned financial,” Antoni said without providing further details.
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The first Ikea store will be operational in Hyderabad by mid-2018, while the second one scheduled in Navi Mumbai will be operational by mid-2019, the company said. Soon after that, the company plans to enter Delhi and Bengaluru, where they have already purchased land. After these four cities, the retailer plans to expand to Pune, Kolkata, Chennai and Ahmedabad. Further, the furniture retailer is likely to have its online store in India ready by 2019.