Ikea India acquires land for store in Bengaluru
Bengaluru: Ikea Group has acquired 14 acres in Bengaluru to set up its third store in the country after Hyderabad and Mumbai, the Swedish furniture retailer said in a statement on Wednesday. Ikea’s first store in India will open early next year in Hyderabad.
The Bengaluru site is located in Nagasandra on Tumkur road, north of the city. It will house a 4.5 lakh sq. ft store that is expected to get more than 5 million visitors per year. Ikea has acquired the land from Bangalore Metro Rail Corp. Ltd (BMRCL).
The company which is evaluating other sites in Bengaluru, Mumbai, Delhi and NCR, said it aims to open 25 stores in India by 2025.
This is in line with Ikea’s three-step retail strategy of building large-format stores first and then looking at e-commerce and other new formats.
Ikea has identified 49 Indian cities where it wants to set up physical stores, Juvencio Maeztu, chief executive officer of Ikea India Pvt. Ltd told Mint on the sidelines of the company’s quality strategy workshop held in Bengaluru last week.
“Karnataka is a highly strategic and important market for IKEA. Along with retail stores, IKEA’s purchasing team will also grow local sourcing and engage with local artisans and communities in many projects. Our first Indian sofa supplier is from Karnataka supplying to our global stores,” Maeztu said in the statement.
Each store that the company opens will employ 500-700 people directly and 1,500 people indirectly in different services, Maetzu said, adding that Ikea’s commitment to ensuring 50% of its workforce at all levels are female was non-negotiable.
Ikea stores, the world over, are typically located towards the edges of cities. While that works for developed countries with widely-connected public transport systems, there were doubts—that even those within the firm raised at the workshop last week—over whether that format will work for India.
Perhaps in a move to combat that from the get-go, the Swedish firm said on Wednesday that it will connect its Bengaluru store to the Nagasandra metro station for easier access and offer the option of sustainable transport for customers.
Two weeks ago, Maetzu also said Ikea will focus more heavily on its home delivery and at-home assembly services in India than it does in other countries. Even existing Indian customers of Ikea, who have been testing out the firm’s products, view this service as crucial since consumers in the country are not used to carrying their own furniture home and assembling it themselves.
“IKEA will bring best business practices, many employment opportunities, infrastructure development and contribute to the growth of the retail sector in the state. We believe that IKEA will work as a catalyst in our development plans. The government is committed to provide the necessary support to IKEA for its future expansion plans in the state,” Karnataka chief minister Siddaramaiah said in the statement.