IKEA, the global home furnishings giant, has its sights set on India, aiming to double its business and sourcing efforts in the country. In an exclusive conversation with CNBC-TV18, Juvencio Maeztu, Deputy CEO and CFO at Ingka Group and IKEA, emphasized the brand’s deep emotional connection with India and unveiled a comprehensive roadmap for growth.
Over the past decade, IKEA has made significant commitments to the Indian market, and as Maeztu highlighted, the company has delivered on its promises. This includes a substantial investment of Rs 10,500 crore in 2013 and the successful achievement of 30% local sourcing, demonstrating the brand’s dedication to the nation. Furthermore, although their goal was to have 50% of women in the workforce, they have reached 46%, indicating a commitment to continued improvement.
So, what are the key areas of focus for IKEA’s expansion in India? With five years of retail presence in the country, IKEA is now looking to the future and planning how substantial its presence should be in the next 100 years. Maeztu underlines the strong mutual affinity between IKEA and Indian consumers, positioning the current moment as a “sweet spot” for the brand, aligning consumer preferences with India’s growing economy.
The company’s vision for the future revolves around three core areas. Firstly, they aim to develop IKEA Retail, ensuring the availability of certified raw materials to integrate into the global supply chain. Secondly, they intend to establish international standards to enhance product quality and global integration. Finally, there’s a focus on “international standards” to not only elevate product quality within India but also facilitate integration into the global supply chain.
As IKEA looks ahead, it is preparing to outline a second phase of significant investments in India. Although specific figures remain undisclosed, Maeztu assures that it will be a substantial commitment. This decision comes on the heels of the company’s impressive growth, with plans to double its business in India each year.
One noteworthy project on the horizon is the investment in Gurugram and Noida, featuring two large shopping centers. Maeztu expects the Gurugram center to materialize in less than two years, followed by Noida and many more to come. He reaffirms India’s remarkable potential as a manufacturing hub for the world, with the value of sourcing estimated at over Rs 5,000 crore, a figure that IKEA believes it can double.
IKEA’s involvement in India extends beyond retail. Maeztu envisions a holistic presence in the Indian market, combining sourcing and manufacturing with retail and additional services. The brand is actively exploring ways to accelerate growth and establish partnerships with Indian companies. IKEA currently collaborates with 65 suppliers in India, positively impacting approximately 500,000 workers in the supply chain. The focus on sourcing and production is pivotal for growth, with IKEA striving to increase local sourcing from 30% to over 50%.
As the brand solidifies its position in India, Maeztu emphasized the importance of securing the right international standards to ensure scalability and consumer welfare. With a vision that extends beyond retail, IKEA is poised to further elevate its presence in the dynamic and promising Indian market.
Sources By Agencies