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Ikea's product sourcing from India to double by 2020
26
Apr '17
Courtesy: Ikea
Courtesy: Ikea
Ikea, the global home furnishing giant from Sweden, plans to double product sourcing from India to €600 million by 2020. The company, with current sourcing of worth €318 million from India, is setting up a second store in the country in Navi Mumbai while its first store is opening in Hyderabad. Maharashtra is expected to have Ikea's five-six stores.
 
The work on Ikea's second store in Navi Mumbai is expected to begin in May 2017. The store is being set up with an investment of about Rs 700 crore, according to a news agency report. The store is expected to be operational by the middle of 2018. The company is also in the process of identifying sites in Delhi-NCR, Bengaluru, Tamil Nadu and Gujarat.
 
Ikea plans to open 25 stores in India by 2025 with an investment of Rs 10,500 crore, the report said.
 
"Ikea works on the principle of optimal sourcing for our global markets. Where it makes sense, we will source locally as well. We currently source products worth €318 million from India and will almost double this by 2020 to around €600 million," Henrik Gunnerling, purchase development manager, Ikea range and supply, told the news agency in Sweden.
 
"Maharashtra will be one of the key markets for us, and we have plans to open 5-6 stores across the state, going forward," Patrik Antoni, deputy country manager for Ikea India, told the agency. "We are also planning to open a large distribution centre in Pune," he added. 
 
Ikea had purchased 23 acres in Mumbai last year to set up its store. The Navi Mumbai store will have over 9,500 home furnishing products and an in-store restaurant. Ikea's first store will come up in Hyderabad later this year. 
 
Every Ikea store will hire 500-700 direct co-workers and another 1,500 for providing services around the store. It has also committed that 50 per cent of its workforce will be women, according to the report.
 
India's modern retail policy requires 30 per cent local sourcing, preferably from small enterprises. "India has a lot of potential. We have about 50 suppliers at present and have added 15 last year," Sandeep Sanan, new business manager, purchasing operations for Ikea South Asia, said.
 
About 70 per cent of Ikea's exports from India are textiles while the rest comprises items like sofas, mattresses, and kitchen accessories. Ikea is also looking at sourcing different kinds of wood for its furniture, including sustainable materials like bamboos and acacia, Sanan said. (SV)

Fibre2Fashion News Desk – India


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