‘Ikea looking at steady and long-term growth’
PremiumWe have an obligation to go beyond the metros but we need to be ready for that expansion and build our business step by step, says Susanne Pulverer, CEO, Ikea India
BENGALURU : Swedish furniture and home furnishing retailer Ikea opens its new, large-format store in Bengaluru on Wednesday. The 460,000 sq ft store at Nagasandra is its fourth in India, and the largest in terms of retail space. It has over 7,000 furnishing items and 65 designed room sets, along with a 1,000-seater restaurant.
The ₹3,000 crore investment in Karnataka planned by Ikea India, part of the Ingka Group, is part of its ₹10,500 crore investment plan for the country. Ikea has two more large stores in Hyderabad and Navi Mumbai, a city centre store in south Mumbai’s Worli and it also plans to open stores in Noida and Gurugram. In an interview, Susanne Pulverer, Ikea’s new chief executive officer and chief sustainability officer for its India business, spoke about the company’s multi-format strategy, omnichannel push, profitability and expansion plans. Edited excerpts:
What was the India-specific mandate given to you when took over as CEO in January?
The overall mandate given to me was to build the brand in India for the long term, and for it to be seen as trustworthy, unique and loved. Of course, to build a brand, you need to meet more and more customers, to continue to expand and grow. We will build on the investments made in three markets, and the fourth (NCR) on its way, where we have started this Ikea journey. Finally, to build the Ikea culture here, based on the values we have.
What’s Ikea’s omnichannel strategy in India?
Ikea’s larger strategy is to start with big format stores outside city centres, and over time, we have seen the need to get closer to people, within cities. Even in Europe and China, we are experimenting with other formats, which are smaller and closer to city centres complemented with online services, remote selling. In India and elsewhere, the omnichannel approach was adopted before covid, to support customers to shop at Ikea, but that got accelerated due to the pandemic. The mix of offline and online, along with remote selling points, would be important. However, experiencing a full-size store would be the best way to know us.
What kind of expansion plan are you looking at?
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Besides the two stores in Noida and Gurugram, we are exploring how to meet the customer in the best way in different cities. We are also working on plans which could include even smaller format stores (5,000-10,000 sq. ft or so) in cities, or even service centres. People can visit these and see some samples, and then get support to experience it digitally and order. That’s an opportunity in India. Accessibility has become very important today, and more so for India than some other markets, which has large cities, long commutes and there is a big need for convenience and services. So, we are looking at steady growth, having committed to invest ₹10,500 crore in India.
Will we see Ikea grow beyond the metros?
We have an obligation to go beyond the metros, but we need to be ready for that expansion and build our business step by step. However, we are in the beginning of our journey and the focus now is to establish our business in India, and it’s a large market.
When do you expect Ikea India to turn profitable?
Profitability is a combination of sales and growth. High volumes make it possible to lower prices. We are working on moving towards profitability, which is important to have a sustainable, long-term business.