New Delhi: Swedish furniture major Ikea, which will open its first India store in Hyderabad tomorrow, expects to launch its Mumbai store next year, according to a top executive. The Mumbai store is under construction and is expected to open next summer, Ikea’s India country manager Peter Betzel told Reuters, adding that India will be one of Ikea’s biggest sourcing markets in the future. Ikea is opening its first India store at a 13-acre complex in Hitec City, Hyderabad, and expects to welcome as many as 7 million visitors a year. IKEA has set up a 150 member task force to help customers assemble furniture and is also partnering with UrbanClap, an app that connects people with a variety of service providers, including carpenters. IKEA had initially planned to open 25 stores across the nation by 2025. In June, the company said it was likely to open more stores, possibly some smaller stores in cities to complement their typically larger showrooms in suburbs. The company has bought land in Hyderabad, Bangalore, Mumbai and Gurugram, and is also looking to expand into Surat, Ahmedabad, Kolkata, Chennai and Pune. Mint had previously reported that Ikea plans to open a store in Mumbai in 2019 and will also allow consumers to buy online following the Mumbai launch. With the Mumbai launch, the company will also experiment with new business models like home furnishing consultancy. Under this model, customers who become a part of the Ikea Family Members programme can request personal meetings with Ikea co-workers who visit their homes, understand their dreams and needs and get personalized recommendations. With Agency Inputs Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter. Never miss a story! Stay connected and informed with Mint. Download our App Now! ! Topics<doc-sep>HYDERABAD: Curious customers lay on beds and nestled into armchairs Thursday as Ikea opened its first Indian outlet, hoping to wow a burgeoning middle class with offerings tweaked to local tastes, including its famous meatballs. Opened with a military band, the store in the southern city of Hyderabad is the first of 25 outlets the Swedish furniture giant hopes to open by 2025 across the country of 1.25 billion people. Analysts said, however, that the firm’s concept of affordable, self-assembly furniture may have trouble translating to a market where do-it-yourself homemaking is an alien idea and spending levels are low. Around 200 people queued up in the underground car park before the opening, and were greeted inside by hundreds of blue-and-yellow clad employees on the stairs waving Swedish and Indian flags. “I’ve come all the way from Bangalore (575 kilometers, 360 miles away). I am excited to see what’s there,” garment factory employee Krishna Mohan Dixit, 39, who began lining up 90 minutes before the opening, told AFP. “We are looking forward to it. Actually it’s my wife who got me here. Her sister sends a lot of Ikea stuff from Dubai. So here we are,” said IT manager Nasrullah Khan, 34, another early bird. Patrik Antoni, deputy retail manager for Ikea India, told AFP that he had tears in his eyes when the first customers arrived. “It is overwhelming, a dream come true,” he said. The changes compared with Ikea elsewhere start with the restaurant — “Smaklig Maltid — Enjoy your Meal in Swedish” is written on the wall — with space for 1,000 people, the firm’s biggest. For religious reasons, the meatballs are not beef or pork but chicken or vegetarian instead, while Indians’ beloved biryani dish was on offer for 99 rupees ($1.44). On Thursday, the eatery was crowded, with people happy to queue up with their trays. Bhaskar Reddy, 35, who runs a stockbroking company in Hyderabad and who lived in Sweden for about two years, opted to compare the food first. “I quite like the meatballs. It’s chicken and not beef but nice they have tweaked the food for our sensibilities,” Bhaskar told AFP. Alongside standard Ikea furniture like Billy bookshelves and Klippan “loveseats,” the chain has “locally relevant products” like masala boxes, Indian frying pans called tawas, rice cake makers and mattresses with a coconut-fiber center. There are also more than 1,000 products under 200 rupees to satisfy consumers whom John Achillea, store manager, said have “big aspirations for their homes and small wallets.” A six-piece bowl set with cutlery for kids costs 131 rupees, for example. The interior has a noticeable local feel too, with Indian-design bedspreads and framed photos of the Taj Mahal and other Indian monuments — alongside Klimt’s painting “The Kiss” recalling faraway Europe. “We decided not to copy and paste,” Juvencio Maeztu, Ikea’s finance chief, told AFP. “We met and interacted with 1,000 Indian families to understand what were their dreams, their frustrations and what they want.” On Thursday, by midday the outlet was filled with people with more pouring in all the time, mostly just checking things out but with a few making their first purchases. It was the living room section that attracted most attention with curious customers testing the softness of the sofas and stretching out on the king-sized beds. To overcome Indians’ aversion to assembling their furniture, with people used to small, family-owned firms providing a bespoke service, Ikea teamed up with UrbanClap, an online platform connecting handymen with consumers. After Hyderabad, Ikea plans to open outlets in the financial capital Mumbai next year, followed by Bangalore and New Delhi as it seeks to grab a share of India’s estimated $40-billion home goods market. But Satish Meena from Forrester Research said the firm will also have to adapt its offerings to the “extremely diverse” Indian market. “No two states or cities have the same furniture demand and behavior, lifestyle and culture vary from one region to another. Hence, Ikea will have to address space, pricing and design issues and pick products accordingly,” Meena said. Locals in Hyderabad not at Ikea were skeptical. “I will wait and watch,” Mohammad Noor, a businessman, told AFP. “I have never been to an Ikea store before. But I believe there it’s all compressed wood. Indian wood is much better.” And Siddharth, who is in charge of a Hyderabad furniture shop and goes by one name, said Ikea might attract hard-up students but in general people would stick with “quality.” “It will be a flop, I tell you,” he told AFP. “The regular furniture consumer will stick with the more solid wood available in the Indian market ... I don’t think it will give us much competition.”<doc-sep>After it opens in Hyderabad next month, IKEA will arrive in Mumbai, India’s financial capital, sometime in 2019. But the Swedish furniture retailer has some unusual plans for the 20 million residents of Mumbai and its neighbourhood. Not only will it build a signature big-box store on the city’s outskirts, IKEA will also debut its small stores there and launch an e-commerce service for what it believes is one of its most important markets in the country. Together, these will make IKEA’s Mumbai outing its “first multi-channel, multi-format destination for India,” a company spokesperson told Quartz. This is in contrast to the usual strategy followed by the company. Typically, it enters a market with a large store, and launches e-commerce much later. However, with purchasing patterns now alternating between physical stores and online, IKEA is shifting gears. “That (Mumbai) will be a super exciting market for IKEA because we have never entered a market like that before,” Patrik Antoni, IKEA’s deputy country manager in India told Quartz. ”(Mumbai) has a dense population. Therefore the need for a different solution is (present) there.” Mumbai is India’s largest city and among the world’s most populated. It is home to the country’s largest population of millionaires with a total wealth of $820 billion. However, it is also the world’s second-most densely populated urban centre with a burgeoning middle class. That makes housing and space a big challenge. The retail giant began constructing its 4,30,000 square feet store in Turbhe, Navi Mumbai, in May 2017. This IKEA store will serve residents of eight different municipal corporations under the Mumbai metropolitan region, including Thane, Kalyan-Dombivili, and, Navi Mumbai, besides Mumbai itself. IKEA also plans to launch small-format stores—typically sized between 1,500 and 2,000 square feet—in Mumbai to give shoppers a look and feel of the larger store. Such stores will be digitally connected, offering shoppers an option to place online orders. The company is yet to announce the location of such an outlet. “There is no land available, you cannot build stores around the city, unlike Delhi, where you can open stores on the outskirts and people can access it,” Antoni added, explaining the need to launch multiple-retail formats in the city. It’s an approach that analysts agree with. “Mumbai is a large city with a big access problem,” said Aditya Sachdeva, director for retail at real estate consulting firm Knight Frank India. “They cannot serve certain suburbs of Mumbai with just a Navi Mumbai store. There’s traffic and the distances are too long.” Locations apart, Mumbai’s IKEA stores will also be curated for local needs. The city’s small apartments where residents make the most of cramped spaces—for instance, a single room often doubles up for multiple purposes like sleeping, dining, and even dressing—will serve as an inspiration for the store layout, Antoni said. And as it expands to more Indian cities, IKEA might replicate its strategy of having smaller stores. In all, the company has outlined a plan to set up to 25 outlets across India over the next decade.<doc-sep>
Hyderabad: Ikea of Sweden opens its first Indian store in Hyderabad on Thursday, a ₹ 1,000-crore bet that affordable furniture and assisted assembly will draw buyers in the world’s fastest-growing economy to its swanky 400,000 sq ft outlet. It has been a milestone that’s more than a decade in the making, and the company expects to welcome as many as 6 million visitors a year. The showroom has some 7,500 products, of which about 1,000 will sell for less than ₹ 200 each. It’s the first of 25 stores Ikea plans to open across the country by 2025. Based on feedback from its home visits, Ikea expects a majority of sales in India to come from the living room and kitchen categories, the company’s country sales manager, Christian Kampe, said. Many people were keen to invest in their homes and make changes in their living rooms, he said. “We saw that it was very strong and these are the strategies, which will be our first step in going forward," he added. Ikea’s launch comes at least 12 years after it started studying India. Patrik Antoni, Ikea’s deputy country manager, said the company is also looking at smaller cities in the future. “People love homes here, this is the difference between India and other markets. If you want to party or just celebrate, you call people home," Antoni said. If two-seat sofas costing as little as ₹ 5,990 and ₹ 7,990 double-bed frames aren’t enough to lure shoppers, the Hyderabad store features a 1,000-seat restaurant—one of the largest across Ikea’s 400-strong global chain—that will serve a mix of Nordic and local dishes, including biryani for ₹ 99 a plate. Chicken and vegetarian meatballs, for ₹ 129 a serve, will replace the traditional Swedish ones made with beef and pork. Ikea has also acquired land in Bengaluru, Mumbai and Gurugram and plans to open shop in Surat, Chennai and Ahmedabad. “The pace of opening stores in India will intensify," said Harminder Sahni, founder and managing director of consulting firm Wazir Advisors in Gurugram. “Ikea has never failed; it’s never closed a single store in its history." According to GlobalData, a data and insights solution provider, rising disposable incomes and improving living conditions of urbanites present vast opportunities in India. Against the backdrop, the company forecasts the Indian home sector to grow at a compound annual growth rate (CAGR) of 10.9% during 2016-2021 and reach ₹ 4.979 trillion by 2021. Ikea’s Kampe also pointed out that the ₹ 200 price tag was identified as a number that Indians will be attracted to. “We also have 500 products under ₹ 100 within the 1,000 items under ₹ 200," he said. Ikea’s competitors in India include Godrej Group’s Godrej Interio, Future Group’s HomeTown, Nilkamal Ltd’s @Home, and Durian Industries Pvt. Ltd’s namesake furniture business, along with mom-and-pop stores vying for an indoor furniture market predicted to expand about 8.8% annually through 2022, according to Euromonitor. Concerned that the absence of a strong do-it-yourself culture in India could impede acceptance of Ikea’s traditional model of self-assembling furniture, Ikea partnered with local start-up, UrbanClap, and hired 150 staff to offer paid delivery and assembly options, and plans to introduce an online store in conjunction with the opening of its Mumbai outlet in 2019. Around 950 people will be employed directly by Ikea in Hyderabad, with an additional 1,500 jobs created indirectly, a company spokesperson said. Kampe added that an average Ikea store does around €100 million of business (annually) and the company plans to watch how things go in the first year and achieve the same target in India as well, in the next five years. Bloomberg contributed to this story. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.