IKEA will decide on next phase of India Investment by end of 2024, says Global CEO
Global CEO Jesper Brodin told CNBC-TV18's Shereen Bhan that the Swedish furniture retailer will soon meet government officials in India to discuss on the next leg of investments in the country.
Swedish furniture retailer IKEA will be ready with a plan for its next phase of India investment before the end of the calendar year 2024.
"I can promise you that my team will come back to you, within this year, at least. Again, we have a couple of discussion points with officials and with representatives of governments to make sure that we gain enough confidence to say, we are ready to take the next step of investment," Global CEO Jesper Brodin told CNBC-TV18's Shereen Bhan in an exclusive interaction.
Brodin is confident that IKEA will overdeliver on the ₹10,500 investment commitment it made when it first stepped into the Indian market more than a decade ago. On the next tranche of investment, he said, "I promise you, it is a number you will like."
In 2013, the Swedish conglomerate received Indian government approval for ₹10,500 crore investment to set up retail infrastructure including 10 stores over 10 years.
India currently allows 100% foreign direct investment (FDI) in single-brand retail trading through the automatic route. However, foreign companies with more than 51% FDI in the country are required to locally source at least 30% of the value of goods purchased.
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IKEA opened its first store in Hyderabad in 2018, before expanding to other cities like Mumbai and Bengaluru. Currently, construction is on for its new store in Gurugram in the National Capital Region (NCR).
To expedite its next leg of growth, the company will be experimenting with new ways of finding customers "The long term plan for us is to establish IKEA in all big cities and then expand in an omni-channel context in India so we can reach as many people as possible,” Brodin said.
A key strategy of IKEA in India is the setup of small stores, with an aim to to bring stores closer to the city centres.
The retailer also recently introduced doorstep delivery in 62 new markets across the states of Maharashtra, Karnataka, Andhra Pradesh, and Telangana. The company gets one-fourth of its sales in India from online platforms including its own app and website. It also plans to introduce the Shop by Phone assistance service soon.
IKEA India sales were up 61% to ₹1,768 crore for the financial year 2023 (FY23), per RoC filings..
First Published: Feb 28, 2024 11:28 AM IST
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