India a long-term investment for us, says IKEA global CEO Jesper Brodin

The world’s largest furniture and home products company IKEA is unfazed by the changing policy landscape in India and is in the country for the long haul, global CEO Jesper Brodin told a select group of journalists here.

Brodin’s take is significantly different from that of a few foreign retail executives who recently expressed wariness about the government’s latest draft policy that seeks to ring in sweeping changes to e-commerce business.

“Our business is long term. Of course, politics follows its own cycles,” Brodin said in Hyderabad, where the largest Swedish retailer opens its first outlet in India on Thursday. “For me and for us, there is logic in what India is doing for the development of India and we have to trust and believe that and it will continue to happen. So I would say we are not sleepless over that.”


Brodin said India is a long-term investment and one of the biggest future markets for IKEA and the company is prepared for some eventualities. “India is a big commitment for us and as a group, we are prepared to take risks for years to come,” he told a select group of reporters in Hyderabad.

The IKEA store in Hyderabad’s HITEC City is spread over 400,000 sq ft.

“By 2025, we need to bring a certain volume to our business in order to get an impact and profitability,” Brodin said at the store on the eve of its launch. “So, one store is too little volume for us to become as good as we want to.” IKEA would require at least need 8-10 stores in India to leverage economies of scale for the company in India.

IKEA said it has been aggressive in pricing by offering 1,000 of the total 7,500 SKUs priced under Rs 200 and 500 of them below Rs 100 and the company seeks to build a long-term market rather than chasing short-term profitability. “We have taken a very offensive strategy, meaning we step in bravely into low prices,” the global head for the Swedish retailer said.

“Coming years, we will exponentially increase our efforts into digital interface with the customers,” the CEO said. About 5% of IKEA’s 38 billion euros global revenue in 2017 came through online sales.

IKEA looks to upwardly revise investments
IKEA, which had agreed in 2013 to invest Rs 10,500 crore to open 25 stores in India, is now looking to speed up rollout of stores and upwardly revise its investments here, IKEA India deputy chief executive Patrik Antoni said.

“We see India more positive today than we thought when we arrived. We arrived with a positive outlook. But we see a very strong demographic growth and the economy is strong,” Antoni told ETon the sidelines of a media conference on Wednesday.

“We see bigger opportunities now,” said Antoni, adding that the changed economic environment and exploding retail market should help IKEA India expedite the rollout of its India stores and amplify investments.

—CR Sukumar

(Rasul Bailay was in Hyderabad at the invitation of IKEA.)

Undeterred by taxes, IKEA puts together cheap India pricing

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IKEA will do things differently in India after it opens its first store in the nation on Thursday, as it deals with higher taxes on imported goods and looks to woo cost-conscious shoppers unaccustomed to the company's DIY furniture assembly style.

IKEA will do things differently in India after it opens its first store in the nation on Thursday, as it deals with higher taxes on imported goods and looks to woo cost-conscious shoppers unaccusto..

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The Swedish furniture retailer is pushing into new countries in South America and Asia as growth slows in its traditional strongholds, including Europe. It is betting on India with its growing middle class, likely aiming to avoid a repeat of the high pricing that initially hit sales in China and Australia.

The Swedish furniture retailer is pushing into new countries in South America and Asia as growth slows in its traditional strongholds, including Europe. It is betting on India with its growing middle..

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The 400,000 square feet (37,160 square metre) store in the southern Indian city of Hyderabad will offer 1,000 products including cutlery, stuffed toys, hangers and container boxes priced under 200 Indian rupees ($2.91) - cheaper than in most countries.

A quick check on IKEA's newly launched India website showed popular products looked cheaper than in the United States. For instance, in India, the white variation of the company's best-selling Billy bookcase is cheaper by a fifth than in the United States and the dark-grey Ektorp sofa is priced 30 percent lower.

The 400,000 square feet (37,160 square metre) store in the southern Indian city of Hyderabad will offer 1,000 products including cutlery, stuffed toys, hangers and container boxes priced under 200 In..

Read More

To satisfy the Indian penchant for ready-made furniture, IKEA has set up a 150 member task force to help customers assemble furniture and is also partnering with UrbanClap, an app that connects people with a variety of service providers, including carpenters.

UrbanClap charges customers about 250 rupees ($3.64) for a 30-minute carpentry job. In comparison, TaskRabbit, the services platform acquired by IKEA in 2017, charges U.S. shoppers a minimum of $36 for any installation job.

IKEA has so far only said it will charge more than UrbanClap if its in-house assemblers do the job.

To satisfy the Indian penchant for ready-made furniture, IKEA has set up a 150 member task force to help customers assemble furniture and is also partnering with UrbanClap, an app that connects peopl..

Read More

IKEA's debut in India has been a long time coming. The company hit snags a few years ago after the government rejected its request to relax rules on buying goods locally.

Meanwhile, competition for IKEA in the country has increased as online furniture startups such as Pepperfry and UrbanLadder have become popular in large cities. The overall furniture market, though, remains largely dominated by unorganized retail and local vendors.

IKEA's debut in India has been a long time coming. The company hit snags a few years ago after the government rejected its request to relax rules on buying goods locally.Meanwhile, competition for IK..

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