IKEA for India: big suburban stores, price pull

Swedish furniture retailer IKEA, which recently announced a Rs 10,500-crore investment plan for India after clearing doubts on government regulations, will soon begin scouting for locations its "big-box" stores to offer affordable furniture for the Indian market.

The details are not out, but the stores are expected to be in smaller towns, with hypermarket sizes expected to be of 50,000-square feet or above.

"IKEA has both large format stores that are standalone and anchor stores within a mall. They could use a mix of both and tweak their strategy suited to the Indian market," said Shubhranshu Pani, managing director, retail, at property consulting firm Jones Lang LaSalle India. 

The company plans to put in Rs 6,300 crore to initially set up 25 retail stores through a wholly owned subsidiary.

Juvencio Maeztu, IKEA's country manager for India, said the retailer will create a new product range for India keeping in mind design, price and quality.

"Our goal is to offer a wide range of well-designed, functional products at prices so low that as many people as possible will be able to afford them," Maetzu said.

"IKEA's stores are huge and in India it is most likely going to set up stores on the outskirts of cities or between two cities," said Abheek Singhi, who heads the retail practice at Boston Consulting Group.


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