IKEA plans to invest Rs 3,000 crore in Maharashtra; to open first store in Hyderabad

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Swedish home furnishing retailer IKEA has plans to invest Rs 3,000 crore in Maharashtra, as it wants to set up a distribution centre in Pune and multi-format stores and experience centres across Mumbai.

The investment is nearly 30 percent of its Rs 10,500-crore investment proposal that was approved by the Foreign Investment Promotion Board to open 25 stores. But Patrik Antoni, Deputy Country Manager-IKEA India said that the company will look to invest more than Rs 10,500 crore in future.

The Maharashtra operations will be led by Per Hornell, who joined IKEA India in March 2017. He will lead and develop implementation of multi-channel retailing in the state.

Out of the planned Rs 3,000-crore investment, the company would expend Rs 750 crores on setting up the first IKEA-owned distribution centre in Pune over the next 2-3 years.

The company has an existing warehouse facility in Chakan, Pune which for the time being will serve all IKEA stores in India.

The home furnishings giant will adopt a multi-channel approach that will make its products more accessible to customers, who would be able to experience and buy them at their convenience. Multiple touch-points will include the conceptual large format IKEA stores, experience centers and small format city center stores in the future.

The first IKEA store will open in Hyderabad later this year, while a store in Navi Mumbai will be unveiled in 2019.

IKEA has four sites in the states of Telangana, Maharashtra, Karnataka and Delhi/NCR and it will add more land sites in other major cities.

Customers will be able to buy IKEA products online from 2019.

At present, IKEA sources components from 11 suppliers in categories such as textiles, carbon steel, metal and plastic in the state. IKEA plans to manufacture more of its products in Maharashtra and then look for new suppliers and diversify.

The Netherlands-headquartered company is looking to collaborate with the State Government and is looking for partners to source local sustainable raw material.

The company would create more jobs through its retailing and distribution center operations. Each IKEA store will engage 2,000 co-workers of which 800 will be directly employed.

Currently, there are 403 IKEA stores in 49 countries with a sales volume of euros 38.3 billion.moneycontrol