IKEA to invest 6,000 crore for expansion in Maharashtra
IKEA India is planning to invest 6,000 crore as a part of its expansion plans in Maharashtra. The Swedish furniture giant is expecting five million visitors at this store in 2021.
Per Hornell, Market and Expansion Manager at IKEA India, told BusinessLine that the investments will be made over the next 10 years as the Swedish company is looking at a long-term growth opportunity here. In Mumbai, IKEAplans to build six-eight stores of different formats. Two of the smaller city centre stores are planned during FY21.
IKEA had earlier announced 10,000 jobs in Maharashtra, 50 per cent for women. “As far as hiring is concerned, we have plans to hire approximately 4,000-5,000 people directly with a 50-50 ratio, and an equal amount of relations with our suppliers,” Hornell added.
The IKEA store in Navi Mumbai will add to the overall demand generation, support local communities with jobs and equal opportunities, increase the supply chain with a focus on local production, skill-building. The store has the largest children’s area — Småland — in IKEA globally. It also has the largest 1,000-seater restaurant similar to the Hyderabad store.
Globally, in the countries that IKEA operates in, the company has factories as well. However, Hornell said that it had no plans to set up factories in India but rather to invest in its suppliers instead.
IKEA launched its first store in 2018 in Hyderabad. More than six million people have visited the Hyderabad store so far. Given the Covid-19 pandemic and its learnings from the Hyderabad store, IKEA has decided that it will welcome only customers who have pre-registered at the Navi Mumbai store.
When asked if this would be a dampener in terms of getting higher footfalls, Hornell, said “We are as excited as we were while launching our first store even today. For us, Mumbai isn’t a sprint, it is a marathon. So it’s not about the first day or first week here, we are here for the long run,” he added.
At its maiden store in Hyderabad, Ikea has generated a revenue of ₹400 crore since launch. When asked if IKEA Navi Mumbai expected to surpass these numbers, Hornell said that the company is confident about the market potential. “We have high expectations from this store, and Mumbai as a whole. With our omnichannel approach, we are confident we will be able to achieve our goals.”
IKEA has reduced the product prices in a bid to get customers during the pandemic. The company plans to continue with this offer for this fiscal.