I am personally a big fan of IKEA and we have already discussed how IKEA’s entry would change the Household furniture Industry in India. It is common knowledge that IKEA has been keen to enter India for quite some time now.
However, Indian FDI policies have put a spoke in IKEA’s plans…until now. With 100% FDI in single brand retail becoming a reality, IKEA now plans huge entry on Indian shores.
According to the Press Information Bureau press release, IKEA’s CEO Mikael Ohlsson met the Indian Union Minister of Commerce, Industry and Textiles Shri. Anand Sharma in St. Petersburg and confirmed that they will be investing in India to the tune of Euro 600 Million (approximately Rs. 4200 crores) in the first stage and additional estimated FDI of upto Euro 900 Million (approximately Rs. 6300 crores) totaling to estimated Euro 1.5 billion (approximately Rs. 10, 500 crores) for initial establishment of twenty-five retail stores in a wholly owned subsidiary.
Along with the investment, Ohlsson also said that they will be raise existing sourcing for their global operation from India significantly.
Most well travelled Indians from semi urban and urban cities know the brand name of IKEA fairly well. IKEA along with Starbucks and Walmart, has been made familiar to Indians because they keep appearing in the media due to their constantly changing plans of entering the Indian marketplace.
With announcement of 25 stores, IKEA will probably have an outlet in every Metro city and A grade cities in India. With that kind of reach and investment, clubbed with IKEA’s competitive prices and quality home furnishing products, IKEA may very well become one of the leading brands in coming decade.
What’s your take?