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IKEA to invest Rs 10,500 crore in India; Rs 6,000 crore in Mumbai

After the Navi Mumbai store, IKEA plans to open two more city centre stores in 2021 to reach many more people in Mumbai.

December 17, 2020 / 06:03 PM IST

IKEA, part of the Ingka Group, plans to invest Rs 10,500 crore in its India operations. The Swedish furniture retailer will be investing Rs 6,000 crore in Maharashtra by 2030, officials said.

The leading Swedish home furnishings retailer will open the doors to its Navi Mumbai store at 11 am on December 18, 2020. The store will remain open every day between 11am and 9pm.

The Navi Mumbai Store is IKEA’s second store in India and the first big format store in Maharashtra.

"IKEA plans to invest Rs 10,500 crore in its India operations. With a planned investment of Rs 6,000 crore by 2030 in Maharashtra, IKEA aims to meet 25 million people in Maharashtra. IKEA will provide over 6000 jobs, of which 50 percent will be for women,” the officials said.

They said after the Navi Mumbai store, two more city centre IKEA stores will open during 2021 to reach many more people in Mumbai.

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Navi Mumbai IKEA is expected to boost employment opportunities for the local community. The IKEA Navi Mumbai store will employ close to 1,000 co-workers of which 50 percent will be women - 40 percent of these from the Navi Mumbai area.

Currently, the store has more than 70 percent support staff – mainly housekeeping and security – coming from in and around Turbhe and Ghansoli, they said.

Chief Minister of Maharashtra Uddhav Thackeray, who visited the IKEA store on December 17, said: “Maharashtra has been one of the top preferred investment destinations in the country and government support plays an integral role in enabling ‘Ease of Doing Business’ in the state. IKEA Navi Mumbai store will not only attract and create many job opportunities, but will also pave the way for many more companies to accelerate their investment plans in the state.”

To provide a safe shopping experience during the COVID-19 pandemic, it is taking a number of precautions from its global best practices and relevant learnings from its Hyderabad operations.

Also Read: EXCLUSIVE | We're coming to Mumbai to participate in a marathon and not a sprint, says Per Hornell of IKEA

To ensure social distancing, IKEA will initially have a cap on the number of visitors to the store through prior registration on its website, by which customers will be allotted a day and time slot to visit the store, the company said.

The Navi Mumbai store located in Turbhe is spread across 5.3 lakh sq ft and is large enough to accommodate 10 football fields. It is an extra-large store from an IKEA perspective.

“It is a gold certified store building,” Ikea officials said.

The Navi Mumbai store will have two floors of parking to accommodate 2,000 cars and two floors from the retailing perspective. It will also have the largest 1,000-seater restaurant like the Hyderabad store—the biggest in Asia.

The Mumbai store will be somewhat larger than the Hyderabad store. It will showcase 7,000 articles, have 50 different rooms built up with home furnishing inspiration, six homes representing how people live in Mumbai and additional areas to arrange a presentation. It will also have the largest children’s area called Småland.

“Today marks a major milestone as Mumbai is the first Omnichannel market for IKEA in India. The many people can now visit our store, shop online or buy their favorite and affordable products through our ‘Click & Collect’ service. We remain invested and committed to India and stand by our vision ‘to create a better everyday life for the many people,” Peter Betzel, CEO and Chief Sustainability Officer, IKEA India, told reporters.

“In the context of the pandemic, affordability has become all the more important. At the Navi Mumbai store, we will have more than 1,000 products priced below Rs 200,” he said.

"IKEA will bring alive inspiring home furnishing solutions with its large, unique range and home furnishing knowledge, showcasing many room-sets and homes, and multiple solutions for a more beautiful, smart, sustainable and affordable life at home - all this reflecting how people live in Mumbai. With our long-term commitment to Maharashtra, we will create 6,000+ jobs by 2030 of which 50 percent will be women," he added.

The company is targeting 100 million customers in Mumbai, Bengaluru, and Delhi over the next two years.

“We have set a short-term objective that IKEA will be accessible to at least 100 million people in India by 2022. The way to become accessible to 100 million people is to have an additional focus on the three main cities—Mumbai, Bengaluru, and Delhi—in that order.

"In all these three markets, we will be using the full portfolio of our retail format to be accessible and will be opening one flagship store in all of these three locations. All our flagship stores across the country will be between 300,000 and 500,000 sq ft. We will also be launching city stores in these areas, which would be spread across 80,000 sq ft to 100,000 sq ft,” said Per Hornell, Market and Expansion Manager, IKEA India.

“We have a long-term commitment to Maharashtra to create a positive impact on the local economy through our business. With our growing retail presence, IKEA will be a strong contributor to increasing the overall home furnishing market. We will generate opportunities for a growing eco-system for the whole industry. Mumbai has a unique spirit, and prior to opening the store, we have done more than 2,000 home visits to create solutions that reflect people’s life at home in Mumbai,” said Hornell.

Anna Lekvall, Consul General of Sweden in Mumbai, said, “The launch of the Swedish global brand IKEA in Navi Mumbai is yet another milestone in the ‘Swedish-Indian sambandh’ in which the dynamic state of Maharashtra holds a special place. It is the state with the largest presence of Swedish companies contributing to growth in India. The Sweden-India relationship holds great value for sustainable solutions, promoting green transition, gender equality and innovation. IKEA, as we know already, is a company working towards finding sustainable solutions. I would like to thank the Government of India and Maharashtra for its commitment and support to IKEA and other Swedish companies over the years. The Navi Mumbai store in the midst of the COVID-19 pandemic is testimony to that.”

Guruprasad Mohapatra, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), said: “The beginning of IKEA’s journey in Maharashtra is a welcome move as it would facilitate growth in the state’s retail industry. This would translate to general wellbeing of the local economy, more job opportunities and above all establishment of good trade practices. IKEA’s presence will also help to attract more FDI into the country as it sends a strong and positive signal to foreign investors in ease of doing business in the state as well as in the country.”

In India, the company is working with close to 50 suppliers which represent over 20 percent of its total sales. “We are working with new categories— ceramics, glassware, wood, natural fibres, bamboo, etc categories other than textiles (mattress, sofas, and chairs have started). This number will grow significantly over the coming years,” Hornell said.

Ikea was founded by Ingvar Kamprad, who turned a small-scale mail order business started on his family’s farm into a furniture empire by letting customers piece together his simple and inexpensive furniture themselves, in 1943.

IKEA now has stores in 40 countries and employs 131,000 people worldwide. The IKEA Group is headquartered in Leiden, the Netherlands.
Moneycontrol News
first published: Dec 17, 2020 03:18 pm