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Two months after opening its first store in Hyderabad, Swedish home furnishings major IKEA, celebrated the ground-breaking ceremony of its Bengaluru store, in Nagasandra.
It will invest close to ₹1,000 crore for the 500,000 sq ft store, planned to open in the summer of 2020. Connected to the Nagasandra Metro station, the IKEA’s third store in India will have a parking space for 2,000 vehicles, a 1,000-seater restaurant serving Swedish and Indian food, a children’s play area called Smaland and around 7,500 products to choose from.
IKEA’s second store is scheduled for inauguration next year in Navi Mumbai.
Long-term investment
“Karnataka is a priority market and IKEA India will invest ₹2,000-crore plus in the longterm in the State. Bengaluru is a special city for us as we have active participation from our total value chain including IKEA Foundation, IKEA suppliers, IKEA social entrepreneurs and now IKEA retail. We will contribute positively to the State’s development by creating 800-1,000 direct jobs and engage another 1,500 indirectly in services,” said Peter Betzel, CEO, IKEA India.
Welcoming IKEA to the State, Deputy Chief Minister G Parameshwara said: “IKEA’s entry reflects Karnataka’s progressive policies for ease of doing business. IKEA will create many jobs and its commitment to employ 50 per cent women will enable many in the State to join the workforce. We see IKEA as a strong partner in increasing local manufacturing in the State and as a great contributor to the State’s sustainability efforts.”
IKEA stores will have solar panels, LED lights, rain water harvesting, water treatment plants, modern waste management systems with plans to use electric vehicles for deliveries and transportation of its employees. It also plans to increase local sourcing from 20 per cent at present to 50 per cent in future.
IKEA is one of the first major single brand retailers to get FDI approval of ₹10,500 crore in 2013. It plans to establish a multi-channel presence in 49 cities pan India by 2030 with small format stores and large format stores. It will begin its e-commerce channel in Mumbai and Hyderabad next year.
Bets on India
“We have already invested ₹4,500 crore in Hyderabad, Mumbai, Bengaluru and Gurugram; and in setting up distribution centres in Pune. Now, we realise that India presents a much bigger opportunity for which ₹10,500 crore is inadequate. We will need to get approval for more FDI,” Patrik Antoni, Deputy Country Manager, IKEA India, told BusinessLine .
The Swedish retailer has four land sites in Telangana, Maharashtra, Karnataka and Delhi/NCR and is scouting for more in other major cities.
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