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New Ikea India CEO Peter Betzel. Ikea is set to open its first store in India in Hyderabad in mid-2018, after spending six years understanding the country.
New Ikea India CEO Peter Betzel. Ikea is set to open its first store in India in Hyderabad in mid-2018, after spending six years understanding the country.

Peter Betzel appointed Ikea India CEO at a crucial phase

Peter Betzel's appointment as Ikea India CEO, replacing Juvencio Maetzu, comes ahead of the launch of Ikea's first India store in mid-2018

Bengaluru: Swedish furniture maker Ikea’s new India chief executive officer Peter Betzel takes over at a crucial point in the company’s journey in the country. Ikea is set to open its first store in India in Hyderabad in mid-2018, after spending six years understanding the country.

Betzel’s appointment was announced on Monday. He will replace Juvencio Maetzu, who moves into a global role as chief financial officer and deputy CEO of Ikea Group.

After handling Ikea’s largest market—Germany—Betzel will now take control of what the furniture maker calls one of its “most important growth markets", a market in which the firm has committed large investments.

On 23 February, Ikea India said it plans to invest Rs3,000-4,000 crore in Maharashtra over the next 2-3 years to set up multi-format stores and experience centres.

The company has also bought a land parcel each in Bengaluru, Mumbai and New Delhi to build stores, with more land to be acquired in cities such as Pune, Surat, Ahmedabad, Chennai and Kolkata.

Betzel has ambitious plans to lead the India story to success and will focus on both people and business growth, the company said in a statement. He is also expected to focus on diversity, inclusion and sustainability as he leads the India operations, which is expected to grow in terms of workforce to 15,000 from 400 over the coming years. 

Last December, Ikea said it plans to have 15,000 workers in India by 2025, of which 50% will be women, said a PTI report. Ikea is hiring 500-700 workers for each of its four stores that will open in Hyderabad, Mumbai, Bengaluru and Delhi-National Capital Region.

“I look forward to establishing Ikea as a meaningful, loved and trusted brand. I will be working with the local teams to bring in a unique global shopping experience, offering good quality and affordable home furnishing products to a diverse set of consumers across the country," Betzel, who’s been with the furniture-maker for 25 years, said in a statement. Ikea typically opens massive ‘black box’ stores that can comfortably house a few football fields. The company had originally planned to take this route in India, too, and open 25 large-format stores by 2025.

But the 25 stores by 2025 plan will now include smaller stores and experience centres as well, Ikea India’s deputy country manager Patrik Antoni said last month. The reason for the modification is to reach more customers by opening smaller stores closer to their residences in India’s space-constrained cities.

Each large-format Ikea store will typically require about Rs1,000 crore of investment.

“The conditions in India are significantly different from a lot of global markets. They’ve been at it for a long time in terms of understanding the market, studying it, getting ready to launch in India. And any retailer that has been successful outside its home market does defer to local tastes rather than just importing a model, and that is what Ikea will do too," said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

In another departure from its global norm, Ikea is already planning for its India stores to offer after-sales services including delivery and assembly after a recent survey undertaken by the company found only one in four Indians would opt to transport and assemble furniture on their own. The company is setting up small training centres for assembly close to its India stores.

“Over the last six years we have set up a strong foundation for Ikea’s presence in India. To materialise our long-term vision for India, Peter is the best person to lead Ikea in India in the next phase as he is known by his visionary leadership, deep understanding of the retail world and his focus on both people and business together," outgoing India CEO Maetzu said.

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