IKEA: States must follow Centre's business reforms
Lauding the Centre for its reforms in the ease of doing business in India, IKEA India Chief Juvencio Maeztu said Indian states should follow and implement the Centre's reforms. Maeztu made the statements at the Economist India Summit, and was speaking in the context of the GST bill. He added that IKEA has faced several land and labour problems in India.
- What is IKEA?
- The story behind IKEA's name
- IKEA and the Indian furniture market
- Affordable IKEA
- IKEA's plans for India
- IKEA plans for a long-term relationship with India
- IKEA laying the foundation for first Indian store
- The World's largest IKEA store
- IKEA: States must follow Centre's business reforms
What is IKEA?
Founded in 1943 by Swedish national Ingvar Kamprad, IKEA is a multinational company, and the world's largest furniture retailer, which sells ready to assemble furniture. It has 375 stores worldwide and employs over 172,000 people. In 2015, 882 million people visited IKEA stores worldwide, and IKEA earned a revenue of $37.7 billion - an increase of over $4 billion from $33.5 billion in 2014.
The story behind IKEA's name
The name IKEA comes from the initials of its founder Ingvar Kamprad (IK), Elmtaryd (E), the farm on which he grew up, and Agunnaryd (A), a nearby village. As of June 2015, Ingvar Kamprad was worth $43.2 billion, making him the world's 8th wealthiest man.
IKEA and the Indian furniture market
India has a massive $17,922 million furniture market (as of 2015). Around 85% of furniture production comes from the unorganized sector, and only 15% comprises of large manufacturers. Therefore IKEA, which plans to double its sourcing from India, from the current €300 million to €600 million by 2020, has ample opportunity to make use of local manufacturers provided they live up to IKEA standards.
Affordable IKEA
Due to its large operating size and increased efficiency, IKEA has consistently lowered prices of its products by 2-3% annually since 2000.
IKEA's plans for India
In 2012, IKEA proposed to invest Rs.10,500 crores in India's $600 billion retail market, and in 2013, India's foreign investment board ratified the proposal. However, since IKEA stores are typically 350,000 sq. feet plus, acquiring land took some time. As of now, IKEA is negotiating land deals in Karnataka and Maharashtra. By 2025, IKEA plans to have 25 stores in India.
IKEA plans for a long-term relationship with India
"These 25 stores will come up in the next 10 years. But it will not stop there. It will be a journey of 100 years and more," said IKEA India CEO Juvencio Maeztu.
IKEA laying the foundation for first Indian store
After over 3 years of dealing with the Indian Government, the world's largest furniture retailer, IKEA has started work on its first store in India which is expected to open by mid-2017. The 400,000 sq. feet store will be located in Hyderabad and will have an estimated 7,500 products for sale. The massive complex will also house a 1,000-seater Swedish and Indian restaurant.
The World's largest IKEA store
The world's largest IKEA store, located in the Swedish capital of Stockholm is a 594,000 sq. feet - bigger than 10 American football fields!
IKEA: States must follow Centre's business reforms
Lauding the Centre for its reforms in the ease of doing business in India, IKEA India Chief Juvencio Maeztu said Indian states should follow and implement the Centre's reforms. Maeztu made the statements at the Economist India Summit, and was speaking in the context of the GST bill. He added that IKEA has faced several land and labour problems in India.
