Betting big on the Indian retail market, Swedish home furnishing retailer Ikea is likely to submit a revised investment proposal to the central government for setting up more stores in different formats and expanding its footprint across the country.
Betting big on the Indian retail market, Swedish home furnishing retailer Ikea is likely to submit a revised investment proposal to the central government for setting up more stores in different formats and expanding its footprint across the country. Ikea is all set to open its first store in Hyderabad on Thursday (August 9, 2018), having got the FDI approval in 2013 that allowed 100% FDI for single-brand retailers in India. After Hyderabad, Ikea will start its start online presence, store and touch points in Mumbai in 2019, followed by Bengaluru and Gurgaon in the following years.
“With the changing market dynamics and increasing land prices, we may look at revisiting our investment targets for the Indian market. While we have not decided on the timeline, we will approach the government soon with new investment plans as part of our long-term commitment in India,’’ Patrik Antoni, deputy country Manager of Ikea India, said.
“So, far we have invested around Rs 4,500 crore in the Hyderabad store and other land plots across India. Rs 10,500 crore is our approved initial investment and we see this as an initial start. We have seen positive signs in India and so much potential, and so we believe that over time we will invest more than this initial money,’’ he said.
“We have to come back to the government and ask for more opportunities to invest in India,” Antoni said. “Our main ambition in India is to be affordable for many people and affordability will drive the local production. We have much higher ambition than the 30% local sourcing and we will grow the home furnishings market and create a growth ecosystem for the whole industry,” he added.
Way back in 2013, Ikea had an approved investment of Rs 10,500 crore and the company has invested Rs 1,000 crore in its first store in Hyderabad for land, construction and capital goods. So far, the multichannel retailer has spent half the amount.