Ikea Plans To Open Smaller Stores In India
Swedish furniture retailer Ikea said it’s looking for opportunities to open smaller stores too as part of its expansion strategy in India.
“While we will add big stores in the country, we will also give the opportunity to smaller formats,” Ikea India CEO Peter Betzel, who attended the ground-breaking ceremony of the Swedish retailer’s third India store in Bengaluru on Thursday, told BloombergQuint in an interview. “We are looking for opportunities in cities like Bengaluru and Mumbai.”
Ikea plans to invest close to Rs 1,000 crore in its first store in Bengaluru, Betzel said, adding the 500,000-square-feet store is set to open in summer 2020. The company estimates the store to draw 7 million customers per year.
“Customer behavior is moving away from smaller-ticket purchase to bigger-ticket purchase into categories like kitchen and wardrobes, etc.,” Betzel said.
The Bengaluru store will employ 800-1,000 direct co-workers and more than 1,000 indirectly. The store, besides offering home furnishing solutions, will have a 1,000-seater cafeteria. The café, Betzel said, is expected to constitute 8-10 percent revenue share. “We are already serving more than 1 million people with food,” Betzel said.
Ikea’s Mumbai store, Betzel said, is slated to open next summer. Its first India store in Hyderabad was expected to draw nearly six million visitors per year.
But the company’s run so far has not been without glitches. Less than a month after its first India store opened, customers have raised concerns about the quality of food served at its restaurant.
Betzel, however, said the company is building up a systematic process with its suppliers to avoid such incidents.