Pandemic accelerated the local sourcing from India: Ikea India CEO Susanne Pulverer

We are starting to get established. We are not known to many, but we focus on getting ourselves established. We have two big physical stores, third is coming up in Bangalore. We have a few city stores, and we are developing our online capabilities. We have come to a volume where we can see an impact now, so to say, we have entered the second phase of IKEA in India. 

The projects in Delhi are long term because they are large scale, but Bangalore and other projects are near term.

We have smaller projects in other cities besides Mumbai and Bangalore shortly . We are focusing and progressing on Hyderabad, Mumbai and Delhi markets currently. 

We are in eight cities, and the cities where we have a physical presence. Our focus is to first establish ourselves in these markets, both physical and online. In the next phase, we will expand to other cities. Today we have 30 per cent of our sales coming from online. We think that despite people coming to stores, this won’t change. 

Even before the pandemic, we were working on local sourcing in India. However, the pandemic created a lot of disturbances in sourcing from China. The pandemic only accelerated the local sourcing push from India for us. 

IKEA India has been steadily increasing its local sourcing footprint, and the ambition is to reach about 50 per cent in the long term and not just meet the mandatory requirements. IKEA India is in dialogue with the government and authorities to enable domestic manufacturing capabilities, bring in global best practices, availability of certified raw materials such as wood, and enable sourcing of sustainable raw materials available in India like bamboo. This, however, needs the collaboration of many partners, including the proactive involvement of relevant government and stakeholders.

No one is immune to the macroeconomic crisis, we have also been impacted by increased costs and prices, but we have tried to absorb as much as we can. We have also had to make a few price adjustments in a few categories. 

There has been good cooperation and collaboration with the government, and we will continue to contribute to the growth of the retail sector.

 Retail is a sector that would be a catalyst for India’s economic growth. Around 8 per cent -10 per cent of the total employment generated in the country is contributed by the retail sector. The retail industry is creating a diverse and inclusive workforce. Organized retail brings in investments and improved infrastructure. Retail is a significant driver for logistic sector growth as well as a faster adopter of technology and driving the digital economy. Giving retail industry status and more prominence will enhance the sector’s impact on India’s economy, giving it a positive direction and bringing it at par with other industries. This will make India an even more attractive investment destination for global companies. 

Policy responses to revive the economy need to be based on openness – removing tariff barriers such as customs duty hikes as well as non-tariff barriers such as testing documentation/import restrictions. An open economy will promote competition and increase the competitiveness of the local industry.

We have a focus on sustainability. We will have a section in the stores which will promote sustainable living in the future. We are looking at partnerships with like-minded companies that can help move the agenda forward and bring about sustainable actions – EV, Renewable energy, waste management, and circularity. IKEA welcomes dialogue and discussions and participates in this movement