Ikea Plans Omnichannel Expansion and Workforce Growth in India’s Second Growth Phase
- ByStartupStory | September 4, 2023
Swedish furniture giant Ikea is embarking on an omnichannel expansion strategy in India, signaling the start of its second phase of growth in the Indian market. The company is set to launch its online operations in the Delhi-NCR region by the end of 2024 while exploring diverse retail formats to bring its offerings closer to Indian consumers.
Ikea’s CEO in India, Susanne Pulverer, outlined the company’s plans, which include expanding its physical store network by opening more outlets in cities like Pune and Chennai. Additionally, Ikea aims to increase its local sourcing efforts to make its products more affordable for Indian consumers.
The company, which recently celebrated five years of retail operations in India, is planning to significantly expand its workforce in the country, with a goal to increase its employee count from 3,000 to 10,000 in the coming years.
Our next growth phase in India looks very promising and full of opportunities. IKEA is committed to India and here for the long term. We are looking at an omnichannel expansion in India with diverse retail formats to come closer to the many people in India,” Pulverer told PTI.
She further said:” We have already booked an investment of Rs 10,500 crores in building five stores in India, apart from announcing investments in two large shopping centers in Gurugram and Noida with integrated IKEA stores.” In the second phase, Ikea is “looking at a faster expansion than the first five years”.
It expects an “accelerated expansion” based on the learnings from the first phase. Ikea has opened stores in cities such as Hyderabad, Mumbai, and Bengaluru cities and has an online presence in Ahmedabad, Vadodara, Surat, and Pune under the first phase.
“Delhi NCR is our next big market. We are planning to start online operations in Delhi by the end of 2024 followed by the Ingka Centres Gurugram project
After Delhi, Ikea is “looking at what are the next markets as well. Pune and Chennai are interesting. Of course, we are exploring more opportunities, but it is important to penetrate each market in a good way, with a good omni-channel setup”.It is important to penetrate India with good omni-channel support, Pulverer added.
“What we have learned is that our full-size stores, flagship stores of IKEA work very well in India. So that’s base and then to complement we will have a different format services fulfillment set up to support it,” she said.
Over investments, Pulverer hinted that it would not be limited to Rs 10,500 crore but would be expanded further in the long term.
“We are only in the beginning of reaching people in India. So we will have to invest much more this is as we say we are here for the long term. We have started with these investments and we are looking into the next phase based on what we have learned,” she said.
“We will go to many more cities, one by one, and really reach more people,” she added.
In reflection of its five years of operations in India, Ikea has learned valuable lessons, especially in managing supply chains during the pandemic. The company is also celebrating 40 years of sourcing from India for its global operations and is keen to expand its sourcing activities further, particularly in sustainable raw materials like wood.
“As we diversify into newer categories to manufacture IKEA products in India, we are also exploring the possibility of manufacturing wooden products in India,” she added.
On Ikea’s five years of operation here, IKEA India CEO Susanne Pulverer said the company has learned during the pandemic about managing the supply chains, which will help them “into the future”.
Ikea is also celebrating 40 years of sourcing from India for its global operations. “We started with textile and carpets, but that has also expanded into other categories plastic and metal and mixed materials, decorating items, fiber natural fibers, mattresses and we are now looking into a big category with wood,” she said.
“There is some availability but not sufficient to really be a big sourcing market -There is a need for more sustainably managed forests that can give the right sustainable raw material,” Pulverer added.
“We can we are not here just to sell furniture we want to be part of the India growth story and be a good business partner in that,” she said.
Ikea collaborates with approximately 65 suppliers in India to produce items for its stores worldwide. The company aims not only to be a furniture retailer but also a long-term participant in India’s growth story and a responsible business partner. In the financial year ending on March 31, 2022, Ikea India reported a significant increase in net sales/revenue, up by 77.07% to Rs 1,076.1 crore.
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