July 19 will mark the debut for IKEA, the world’s largest furniture retailer into India, with its first store being launched officially in Hyderabad, the capital of Telangana, the newest State.
Coincidentally, the store has seen an investment of Rs 1,000 crore. It will have 1,000 employees, and has been designed after teams visited 1,000 Indian homes across cities to study peoples' choices and needs and house the biggest restaurant in IKEA’s worldwide chain with a 1,000 seater.
The much-awaited store has taken the Swedish major's at least four years of efforts, with around 1,000 days into land acquisition, design and construction, product sourcing and recruitment to get everything up and going. The staff will be gender equal with 50 per cent of the 1,000 strong employees across all departments being women, Peter Betzel, the new India CEO, said.
The company will source up to 20 per cent of the products from local manufacturers. It will offer a wide range of 7,500 products, several of them made to typical Indian needs jointly by teams here and back home in Sweden, Betzel explained to a group of journalists at the store today.
Expressing that IKEA’s journey so far has been satisfying in the country, the CEO felt more rationalisation of regulatory framework and labour laws across states was necessary to encourage retailers to accelerate growth. He said the expansion plan was in place with the next store to come up in Mumbai early next year.
In addition to boasting of the largest restaurant, the Hyderabad store will for the first time offer a home delivery-cum-help in assembly of select products. It has tied up with logistics major GATI and about 150 staff will drive the service, John Achillea, MD of the store who has been shaping up things for the past two years, said.
Online and Multichannel focus
Peter Betzel said IKEA will offer online shopping and open up multichannel transactions from the launch of Mumbai store operations.
“Our emphasis will be on experiential shopping at stores to a transition to online in the future. The need for online shopping is growing in home furnishings. In some countries, it is between 6-10 per cent of the share of the total sales at present. It is offered in a dozen countries.”
Going forward, IKEA is targeting 49 large cities for setting up big format stores. It is also exploring smaller stores, increasing local sourcing to 50 per cent and bringing in technology, he said.
The Swedish giant has got the nod to open 25 stores with an investment of around Rs 1,000 crore per store over 10 years.