INTERVIEW: Ikea CFO says she still has ₹3,500 crore to be spent in India— the pandemic has changed targets but not the investment plan
- In an interview with Business Insider,
Preet Dhupar, IKEA India’s Chief Financial Officer shares the Swedish furniture retail giant’s big plans for India.
- IKEA India is finally opening the doors for its second store in India –
IKEA Navi Mumbai.
IKEAsees India as a long-term investment with the stores in Mumbai and Navi Mumbai, Bengaluru opening next and a land acquisition done in Gurugram for their first store in the North.
AdvertisementIkea may be used to gala events where thousands of people throng every store opening anywhere in the world. But the latest one in Navi Mumbai is likely to be a relatively sombre affair thanks to the COVID-19 pandemic. However, while it has toned down the fanfare associated with the Swedish furniture retailer, there is little change in the company’s goals.
In line with its global strategy, the company is sticking to its planned store openings in India, and hasn’t changed its strategy, the Chief Financial Officer, Preet Dhupar, responsible for the market told Business Insider. “India is a growth market for us, this is where a big part of the world’s population lives with a majority of young people starting their journeys. We want to be a part of their journey. Few years down the line, IKEA India hopes to be one of the biggest markets for the global team,” she said.
It is expected that there will be a considerable change in people’s behaviour— in that, they are likely to avoid crowded places like shopping areas and malls. That has led many retailers like Reliance Retail, DMart, and Shoppers Stop to pivot to a new strategy where more sales come from online platforms.
While Ikea too has relied on online sales during the pandemic, it hasn’t scaled down on its offline aspirations. “Of course, the targets have been revised as they have for all global outlets of IKEA. But that doesn’t change our investment plans in India,” she said.
IKEA will pump in ₹10,500 crore into its India unit— ₹7,000 crore has already been spent in fulfillment centres and store, land acquisitions in the country. According to Dhupar, the next store will be opened in Bengaluru, followed by Gurugram, its first one in North India, which reportedly has been delayed because of the company’s revised plans for the city.
As the 5.3 lakh sq ft store in Navi Mumbai, opens its doors to the public today (Dec 18), IKEA India will hope to make up for a lost year. However, it is likely to be a much smaller crowd than what Ikea is used to. IKEA’s opening in Hyderabad which saw over 15,000 people line up on the first day itself, won’t be a scene replicated in Mumbai. “We will be nowhere near that, in fact it will be 1/5th the number,” said Dhupar.
“Thanks to the size of our stores, we can make way for people to have a safe shopping experience. We are able to maintain social distancing with people having enough space to shop around,” said Dhupar.
In the last year, IKEA India has seen over 25 million people shop online and 5-6 million people walk into its Hyderabad store. With the easing off of the pandemic restrictions, Dhupar is keeping her fingers crossed to see the same number in the coming year, if not more.
“IKEA India is just scratching the surface when it comes to making a mark in the global numbers. You have to understand, we had just the one store in India until a few days ago. But hopefully, with the new store, we will be able to double the numbers,” she said.
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