Ikea to invest close to ₹1,000 crore in Bengaluru store2 min read . Updated: 11 Oct 2018, 06:16 PM IST
The 500,000 sq ft store, set to open doors in summer 2020, will be the company's third store in the country after Hyderabad and Mumbai
Bengaluru: Swedish furniture retailer Ikea plans to invest close to Rs1,000 crore in its first store in Bengaluru. Karnataka is a priority market, the company said, adding, it will invest over Rs2,000 crore in the state in the long term.
Ikea’s Bengaluru store is expected to employ 800 to 1,000 directly and engage the services of another 1,500 indirectly. The 500,000 sq ft store, set to open doors in summer 2020, will be the company’s third store in the country. Its Mumbai store, the second one in India, is set to open later this year. The company also reiterated its 2016 target of opening 25 stores in the country by 2025.
After spending over a decade studying the Indian market, the furniture company opened its first store in Hyderabad in August. The company’s 400,00 sq ft outlet in Hyderabad opened after several delays though, of which the most recent ones were a push in its launch date from 2017 end to this year, and then a near 20-day postponement to August from July.
But Ikea has, over the years, constantly reiterated its main priority of meeting its quality commitments towards customers and co-workers, and alluded that India offered a significant enough market opportunity that was worth being patient for.
Its Hyderabad store, in which the company had invested around ₹ 800 crore till June, was expected to get as many as six million visitors a year. The Bengaluru store is expected to draw more crowd, with the company estimating more than 7 million customers per year. When it announced the purchase of land for its Navi Mumbai store in 2016, it said it expected that store to attract over five million visitors a year once it opened.
Ikea’s India chief executive Peter Betzel told Mint in June, about three months after he took over the reins from Juvencio Maeztu, that the country will be one of the top markets for the company.
“Bengaluru is truly cosmopolitan with many people moving in to find new opportunities. With the Ikea store, we will contribute to a better everyday life for all Bengalureans with well designed, functional home-furnishing solutions," Betzel said.
The Bengaluru store will have a parking space for around 2,000 and a 1,000-seater restaurant, similar in size to the Hyderabad store. It will also have a supervised children’s play area called Småland.
Ikea aims to be present in 49 cities by 2030 and its India footprint will include its typical large-format ‘blue box’ stores (like the ones in Hyderabad, Mumbai and Bengaluru), smaller formats that it plans to experiment with, and e-commerce. The company plans to launch its e-commerce platform in Mumbai first in 2019.
But its run so far has not been without glitches. Less than a month after its Hyderabad store opened, a customer tweeted a photo of a caterpillar in his plate of vegetable biryani, casting questions over food safety at its largest restaurant globally. Only two weeks after that, another customer said he found an insect emerging from the chocolate cake served to his daughter at the same store.
Ikea said it was taking steps to avoid such incidents but refuted media reports of local authorities collecting samples of cakes or issuing fines.
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