Ikea to double merchandise sourcing from India by 2020
Seeking to take benefits from ‘Make in India’ campaign, furniture giant IKEA is all set to have fresh tie-ups with small and medium enterprises, to help the company double the merchandise it sources in India by 2020.business Updated: Nov 28, 2014 09:21 IST
Seeking to take benefits from Prime Minister Narendra Modi’s ‘Make in India’ campaign, Swedish furniture giant IKEA is all set to have fresh tie-ups with small and medium enterprises (SMEs), which will help the company double the merchandise it sources in India by 2020.
“IKEA Group is positive to all government initiatives that help in simplifying and making it easier to produce and export products in India,” said Sandeep Sanan, head of sourcing, IKEA India, told HT. “We are actively looking for new suppliers and to increase the categories sourced in India. We don’t talk about ‘Make in India’ for India, but ‘Make in India’ for IKEA worldwide.”
A senior official from the Department of Industry Policy and Promotion (DIPP) said: “IKEA by inking a deal with SMEs will be manufacturing products not only for its outlets in other countries but will also create products especially for its Indian outlets, through the Make in India initiatives for manufacturing.”
IKEA, which enjoys the benefit of being one of the first companies in India to be allowed to bring in 100% foreign direct investment in single brand retail business, has been sourcing from India for the last 27 years for its stores around the world. At present, IKEA Group sources about 315 million euros of products in India.
IKEA is also said to have Indianised products, which would on consumer response then be exported to other global stores under specific categories.
“IKEA’s products are produced in several countries. The sourcing that we have today in India and the planned doubling of sourcing will be for global IKEA, of course including our Indian future stores. This gives the current and future suppliers in India a much bigger market to aspire for. Apart from our core range, we also work with social entrepreneurs in UP, Rajasthan and Karnataka, producing limited collections for IKEA,” Sanan added.
IKEA plans to open its first store in Telangana, with an investment of around Rs 500-600 crore.
“We have been working with several SMEs in India and they have grown with us over the years. We would want to work with more SMEs that can align with our values,” Sanan said.