Food can be the first contact point between Ikea and Indian customers: Patrik Antoni
The Ikea store will house a 1,000-seater restaurant—one of Ikea’s largest globally, as the company believes food will be the first contact point between Indians and Ikea
New Delhi: Ikea, the Swedish furniture retailer which has been sourcing from India for more than 30 years, will be opening its first store in Hyderabad in July. The Ikea store will house a 1,000-seater restaurant—one of Ikea’s largest globally, as the company believes food will be the first contact point between Indians and Ikea, its deputy country manager Patrik Antoni said in an interview. Edited excerpts:
Restaurant is an important part of Ikea stores. And Ikea is known for its meat balls. Are you bringing the same experience here?
Food can be the first contact point for Ikea in India. The 1,000-seater restaurant in the Hyderabad store, which is one of largest for Ikea globally, will have a lot of vegetarian options. We’ll have the meat balls, including the vegetarian options and fish dishes, but we’ll not sell beef and pork in India. About 50% of food will be Indian cuisine and the rest will be Swedish dishes. We would like about 30-40% of the people living in the city visiting our store in the first year.
Ikea has been sourcing from India for more than three decades. With the store, will that increase?
We have been sourcing textiles and other cotton products. About 90% of food ingredients are sourced from India. Currently, we have 56 suppliers for textile, other cotton products and sofa (to West Asian countries). For food, we have about 20 suppliers.
We have been working on possibility of sourcing wood products, big furniture. But sourcing has to be sustainable and we need certification of wood. We have already initiated talks with state governments of Karnataka and Maharashtra. In the long-term, we want to source about 50-60% of our products from India.
India is a price sensitive market. How would you address that?
Ikea stores in India will have about 1,000 products that will be priced below Rs200, which we believe would work as a point of introduction.
This the lowest price point for Ikea globally. About 2-3% of the 10,000 products that our stores will have will be India specific.
We have localized a lot of products after studying 1,000 Indian homes during the past few years. With local sourcing and the flexible labelling of MRP (maximum retail price), we’ll have the pricing advantage. We are pushing affordability and focus on value for money products in India.
Ikea has approval for Rs10,500 crore of investment in India. Will that be sufficient?
No. We’ll need much more. We can manage next couple of years with the approved Rs10,500 crore. We’ll have to seek approval for more. But we are yet to decide on a number. The potential for Ikea in India is huge, especially because of the fast urbanization.
All big cities in India will have more than one Ikea store. We are also piloting with smaller-format stores in Mumbai.
Do you plan to leverage online as a medium for sales?
Yes. We’ll start selling online in 2019 in a phased manner. Home delivery and assembly will be outsourced. And we’ll have our team for services.
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