IKEA Announces Massive Rs 10,500 Crore Investment for Indian Expansion
IKEA plans to invest more than Rs 10,500 crore in India over the next five years. The Swedish furniture giant aims to expand its retail operations significantly across the country. Patrik Antoni, CEO of IKEA India, shared these ambitious plans in a recent interaction.
Doubling Down on Retail Development
The company has already deployed Rs 10,500 crore in India since its initial announcement in 2012. Now, IKEA wants to more than double that investment. A large portion of this fresh capital will fund new retail stores and shopping centres.
Antoni highlighted two major projects outside Delhi. These will be large shopping centres with integrated IKEA stores. Each project requires an investment of around Rs 400 crore to Rs 500 crore. They represent a first-of-its-kind venture for IKEA in India.
Store Expansion Strategy Across India
IKEA targets opening 20 to 30 new stores by 2030. This rapid expansion aims to strengthen its footprint nationwide. The primary focus cities include Delhi, Bengaluru, Mumbai, Hyderabad, and Chennai.
The company also explores opportunities in other locations. Lucknow, Chandigarh, and Jaipur are under consideration for future stores. Currently, IKEA operates six stores in India. These consist of three large-format stores, two city stores, and one plan-and-order point.
Profitability Goals and Broader Investments
IKEA aims to achieve profitability by the end of 2028. Beyond retail, the company invests in other areas within India. It expands its global capability centre and digital hub to support operations.
Antoni emphasized the importance of local sourcing. IKEA plans to double its sourcing from India to €800 million by 2030. This increase will raise domestic sourcing from 30% to 50% of its total procurement.
Challenges in Local Sourcing
Despite ambitious goals, IKEA faces hurdles in scaling local sourcing. The limited availability of traceable, FSC-certified wood poses a significant constraint. This shortage forces the company to import wood and machinery, incurring high import duties.
Antoni also pointed to the complex Quality Control Order certification process. This regulatory hurdle complicates efforts to boost local procurement. IKEA continues to engage with authorities to address these challenges.
Online Launch and Chennai Focus
IKEA recently launched online deliveries in several Tamil Nadu cities. Chennai, Madurai, Coimbatore, and Salem now have access to IKEA's online services. This move follows strong customer interest from the state.
Over 25,000 customers in Tamil Nadu have joined the IKEA loyalty programme. Many travel to stores in Bengaluru and Hyderabad for purchases. The online launch helps IKEA gain valuable market insights ahead of a physical store opening in Chennai.
While the company plans to open a retail store in Chennai, it has not specified a timeline for this launch. The online services will pave the way for deeper market penetration in the region.
