Swedish furniture giant Ikea announced on 8 March its decision to invest 20bn rupees (£211m, $300m) in the north Indian state of Haryana which surrounds New Delhi. The low-cost furniture company has plans to open its first store by 2017.
"Haryana is a prioritised state for Ikea due to its open investment climate," said Ikea's India chief executive, Juvencio Maeztu, in a statement. According to reports, Ikea signed a memorandum of understanding with Haryana which will see an investment that will open the door for nearly 1,000 direct jobs and 3,000 indirect jobs created via Ikea services, like furniture assembly and delivery.
Ikea has previously signed memoranda of understanding with other Indian states. The first Ikea store is planned for the southern IT hub of Hyderabad in summer 2017, reported AFP News. The store will mirror the features offered in global Ikea stores, like restaurant and kids' play area, said Mikael Palmquist, Ikea's Asia Pacific Retail President. The products will also be featured from the global portfolio to fit the tastes of the region.
"After Hyderabad, in the first phase of growth, we plan to open stores in Delhi, Mumbai and Bangalore. We are searching for land in these cities. We want to open more than one store in locations where our stores come up," said Palmquist, reported the Business Standard. Palmquist believes IKEA stores in India will be one of, "the most visited stores in the world" and therefore the company is planning the retail outlets in the country with bigger restaurants and higher seating capacity.
Ikea presently sources materials from India but has no retail outlets in the country. "If we were to open our first store today, our sourcing from India would be less than 5 per cent. Main challenges in meeting sourcing norms is availability of raw material and identifying right entrepreneurs we can work with," said Palmquist. The company plans on opening 25 stores across nine Indian cities by 2025.