Leading Swedish furniture and home furnishing retailer IKEA expects its India sales to grow by over 10 per cent in the financial year 2025, a top company official said here.
IKEA follows the September-August financial year. While speaking with a media delegation, Ingka Group Retail Manager Tolga Öncü said that the company is confident of its expansion in the Indian market, where it plans to open a slew of small-format stores along with its traditional large (Blue Box) stores.
Ingka Group operates IKEA stores in 31 countries, including India.
IKEA, which gets around 30 per sales through online channels, is seeing an impressive jump in queries.
In FY24 IKEA in India reported a widening of its total loss to Rs 1,299.4 crore, though its revenue from operations was at Rs 1,809.8 crore, up 4.5 per cent.
When asked about the growth of IKEA in India, Tolga Öncü said: “So right now, after many years, seven years of being in India with the retail business, we have finally come to a point where we feel and see that the catch-up is happening for us." He also acknowledged that IKEA’s growth was slowed down in India due to the pandemic and other related disruptions. Before that, it was very aggressive in its growth.
"We see that we are growing faster (in India) than many other markets where we are," he added.
With the learning of the last seven years of retail operations in India, IKEA is trying to be "more relevant" for the many Indians and their everyday life at home.
“India is actually as big as a continent. And of course, we are a growth mindset organisation. So, we are expecting big growth for the coming years in India. We are establishing all the needed resources and focusing on growing IKEA in India, and I believe that this is just the beginning of what we are experiencing now,” he said.
Oncu did not comment on the number of stores that IKEA will build in India, but said: “There is an enormous amount of stores that need to be established in India, in order for us to reach the many Indian families and consumers.” IKEA, which recently opened a city store in Delhi, started retail operations in India in 2018 with its Hyderabad store, followed by Navi Mumbai and Bengaluru.
To grow faster and increase its penetration in India, IKEA has changed its approach to expand with several small stores, which could be sized from 2,000 to 5,000 sq feet, besides having traditional large format stores and city stores.
"So I see a big potential (in small stores). After many decades, we have learned how to establish, operate, and use our traditional stores. And now we are seeing that where these traditional ones are not able to be… we can now become closer to many people by developing these smaller formats. And of course, it's a combination and you need to see it as a part of an ecosystem,” he added.
Öncü also acknowledged that India is a value-conscious market, and to grow beyond the metro market, IKEA needs to offer low-priced items.
“We need to establish a very low-cost operation when it comes to the fulfilment, the logistic part, when it comes to the operation, so that all the costs we can lower, we can also lower the prices of our products to become even more affordable,” he added.
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