IKEA’s Bengaluru store, its fourth in India, aims to source 50% of products locally

Four years after entering India, Swedish furniture retailer IKEA has launched its fourth store, in Nagasandra, Bengaluru. The new store is its biggest in India, covering an  area of 460,000 sq ft.

At the store’s launch event, Suzanne Pulverer, CEO of IKEA India, told Moneycontrol that the retailer is seeing an impact from rising inflation and to combat it, will be focusing more on local sourcing to make products affordable.

“Everyone is impacted by what has happened in the world with the pandemic, and then we have disruptions because everything is connected. So yes, we are seeing a lot of pressure, on prices, on costs… We are trying to absorb and we are also adjusting our prices so that we can keep the balance between  affordability and margins,” said Pulverer.

27% of the Bengaluru store’s 7,000 types of products are produced in India and it currently employs around 1,000 people. IKEA will continue hiring more local talent in the coming months.

During the launch, IKEA’s top management highlighted that the Bengaluru store is different from its other stores. It has balcony furnishings, a large children’s play area called ‘Småland’, and a 1,000-seater restaurant with a mix of Swedish and Indian food.

Also Read: IKEA India all set to welcome customers in its Bengaluru store on June 22

“The product range is the same across markets in India. What we adjust is the solutions. So, for example, adjusting the inspiration routes to the local market that how houses and apartments are constructed. We have learned to become more relevant.”

Bedroom furnishings, work-from-home categories and living-room furnishings are among the most popular categories for IKEA in India.

Commenting on over a quarter of the Bengaluru store’s products being sourced locally, Pulverer said: “The textile part has always been very strong in India — corporate and home furnishing accessories. So, now we are expanding the categories contributing to partners developing the industry, we are sourcing it here. Gradually, we want to increase the local sourcing, long term, up to 50%.”

The retailer will be investing Rs 3,000 crore in Karnataka. Commenting on this, Pulverer said that the store is IKEA’s first investment. She added: “We will look at how we can open more customer meeting points, maybe smaller formats. So, all can go under this Rs 3,000 crore investment that we have committed.”

IKEA plans to launch its first city-centre store in Bengaluru next year. The retailer is working to launch its fifth store in Delhi-NCR but has not disclosed a timeline yet.