Bangalore Swedish furniture and home furnishing retailer Ikea on Wednesday opened its new, large format store in Bengaluru. The 460,000 sq ft store in Nagasandra is its fourth largest in India and the largest in terms of retail space. It has a 7,000-seat restaurant with over 7,000 furnishing items and 65 designed room sets.
Rs 3,000 crore investment plan in Karnataka by Ikea India, part of the Ingka Group, is part of 10,500 crore investment plan for the country. Ikea has two more large stores in Hyderabad and Navi Mumbai, a city center store in South Mumbai’s Worli and plans to open stores in Noida and Gurugram as well. In an interview, Ikea’s new chief executive officer and chief sustainability officer for its India business, Suzanne Pulverer, talks about the company’s multi-format strategy, omnichannel push, profitability and expansion plans. Edited excerpt:
What was the India-specific mandate given to you when you took over as CEO in January?
The overall mandate given to me was to build the brand in India for a long time, and to be seen as trustworthy, unique and endearing. Of course, to build a brand, you need to meet as many customers as possible to continue expanding and growing. We will build on the investments we have made in three markets, and the fourth (NCR) on our way, where we started this Ikea journey. Finally, to build the Ikea culture here based on the values we have.
What is Ikea’s omnibus strategy in India?
Ikea’s big strategy is to start with large format stores outside city centres, and over time, we have seen the need to move closer to people within cities. Even in Europe and China, we are experimenting with other formats, smaller and closer to city centers that complement online services, remote selling. In India and elsewhere, the omnichannel approach was adopted before Covid to support customers to shop at Ikea, but accelerated due to the pandemic. A mix of offline and online with remote selling points will be important. However, experiencing a full-size store would be the best way for us to know.
What kind of expansion plan are you looking at?
Apart from having two stores in Noida and Gurugram, we are exploring the best way to meet customers across different cities. We are also working on plans that could include small format stores (5,000-10,000 sq ft or so) or even service centers in cities. People can visit these and see some samples, and then get support to experience and order it digitally. This is an opportunity in India. Access has become very important today, and compared to some other markets for India, which have large cities, long journeys and a great need for convenience and services. Therefore, we are looking forward to steady growth, committed to investing 10,500 crore in India.
Will we see Ikea move beyond metros?
We have an obligation to go beyond the metros, but we need to be ready for that expansion and build our business step by step. However, we are at the beginning of our journey and now our focus is to establish our business in India, which is a huge market.
When do you expect Ikea India to turn profitable?
Profitability is a combination of sales and growth. Higher volumes make it possible to lower prices. We’re working on moving toward profitability, which is critical to a sustainable, long-term business.