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Swedish furniture chain IKEA, which made a euro 1.5-billion (Rs 10,500 crore) investment proposal for the India market last June and got a Cabinet nod earlier this year, is yet to identify a location for its first store in the country.
Now led by Peter Agnefjall, the new chief executive after Mikael Ohlsson retired recently, IKEA is still “defining the entry plan” for India.
“We have great potential for growth and primarily we are still focusing on existing stores and markets,” a company spokesperson in India told Business Standard. Adding: “We are also excited to meet new customers in a few new countries over the coming years; examples are Croatia, South Korea and India.”
The company would take at least three years to open a store from the time of identifying a location, the executive maintained. So, the first IKEA outlet in India is not expected before the end of 2016.
Taking it slow but steady
When asked how IKEA’s India plans looked after the new CEO had taken over, a company executive said: “India is an important market for IKEA In India and we are currently defining the entry plan. The most important priority is to find the right location for our stores at the right price in major cities, with easy access to public transport and a good road network.”
IKEA has been sourcing from India for about 25 years. It has begun talks with authorities in many states in the north and south. Indications are that the first store might be in in Noida or Gurgaon in the Delhi region.
Agnefjall had told a foreign newspaper recently that he did not recognise his predecessor's plan of opening 20 to 25 stores a year. He also said his focus would be on existing markets. Would that mean a delay in India plans? To that, there’s no clear answer from the company.
Globally, IKEA wants to reach euro 50 bn in total sales by 2020, through annual growth of 10 per cent, with half the growth from existing stores and the remaining half from new stores.
Meanwhile, IKEA representatives have started to meet Indian customers and visit their homes to understand “life at home in India better”.
The group announced on Monday that its total worldwide sales had increased 3.1 per cent to euro 27.9 bn in financial year 2013. Some of the strongest growth was in Russia and China and there was also significant progress in North America.
“While southern Europe continued being affected by the current economic situation, the IKEA Group continued gaining market shares in almost all markets,” it said.
IKEA has been sourcing from India for over 25 years.
