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.
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.
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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.
Indian Furniture Market
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.
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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.