'Stores in major Indian cities': IKEA CEO outlines expansion strategy
What's the story
In an interview with CNBC-TV18, IKEA CEO Jesper Brodin discussed the company's ambitious expansion plans in India. After launching stores in Hyderabad, Mumbai, and Bengaluru, the Swedish furniture giant has set its sights on Delhi. The long-term goal is to establish a presence in all major cities and expand through an omni-channel approach to reach as many customers as possible. Notably, the Mumbai store will be closed later this year because the location was not prime enough.
IKEA in Gurugram
Gurugram facility to be a shopping center
Brodin revealed that a new IKEA facility is already under construction in Gurugram. This location will not only serve as a store but also as a shopping center. He emphasized that IKEA is committed to India for the long haul, with the next phase of investments expected to be decided by 2024. The company is currently in talks with government officials and representatives to ensure a smooth transition into this next stage of growth.
IKEA's India strategy
Small store strategy and production scaling
Since 2018, IKEA has been experimenting with a small store strategy to bring their locations closer to city centers. Brodin shared that they have opened around 40-50 small stores and closed about 10, learning valuable lessons about the importance of prime locations and efficient store layouts. While the Indian market could potentially support more than 10 stores, IKEA's goal is not to dominate but rather to stimulate growth and create value chains in production and services.
Investment details
Investment commitment and digital capabilities
Eager to connect with more Indian consumers, Brodin stated, "We have committed to Rs. 10,500 crore investment and we will over deliver." The company plans to enhance its online digital capabilities and explore new ways of reaching customers in India. This expansion strategy aims to make IKEA products more affordable and accessible while also promoting growth in the local economy.