At last week’s Retail Leadership Summit in Mumbai, Peter Betzel, CEO of IKEA India, announced that the brand is set to open its supermarket flagship store in Turbhe, Navi Mumbai this summer. Besides the Navi Mumbai mega-store, IKEA India is also planning to launch at least one convenience store within Mumbai, to harness the capital’s full potential. This smaller store is expected to open later this calendar year. Founded in Sweden in 1943 by 17-year-old Ingvar Kamprad, IKEA is a European multinational that designs and sells ready-to-assemble furniture, kitchenware, and home accessories. They launched their first Indian retail store in Hyderabad in August 2018.
Industry insiders added that smaller IKEA India stores will be located in central business districts of Mumbai and residential areas such as South Mumbai, Western Suburbs, and Downtown. Turbhe’s proximity to Mumbai due to the city’s Eastern Express, along with smaller stores within Mumbai, will help IKEA India penetrate the great potential of India’s financial capital.
The Perfect Mix
At the top, Betzel also said IKEA India will implement a “hybrid” model in India, consisting of the merger of online and offline retailers, rather than relying solely on the typical giant outlets. For this retail model, the affordable furniture brand has committed the US $ 1.5 billion to invest. The ‘hybrid’ model will be introduced for the first time in Bengaluru, Delhi, and Hyderabad. Additionally, Betzel added that Hyderabad has set the standard for future IKEA stores in India. Since IKEA India opened in Hyderabad, the store has welcomed six million visitors and has conducted the business of over 400 million rupees.
Additionally, IKEA imports more than 75 percent of the products it sells in India from many countries. Betzel said that despite the fact that the Indian government recently raised import duties on items like furniture and kitchen appliances, IKEA India has no plans to increase product prices. Betzel announced, “We will not increase the prices of our products at this time because we want to remain accessible to everyone.” “We are disappointed that the import duties will have a negative impact on our business. “We are talking to the government about the fees,” he added.
The Current Situation
Finally, as China is one of the main markets that manufacture and supply products to IKEA India, Peter Betzel was asked about the impact of Coronavirus on the supply side. While she did not specify the impact of the virus on supply-side operations, she added that IKEA India is working to identify local Indian suppliers who meet stringent quality and product standards. However, according to him, this will take some time, as the Indian suppliers are currently not supplying many of their products.