IKEA to set up store in Bangalore, invest Rs 2,000 crore

The Swedish home fu­r­nishing major, IKEA, held a grou­nd-breaking ceremony of its third India store in Ba­ngalore on Thursday. The 500,000 sqft store that will come up in 2020 near Nagasandra on Tumkur Road will be logistically conne­cted to the Metro station.

Peter Betzel, CEO, IKEA India said Karnataka was a priority market for the co-mpany and it would invest Rs 2,000 crore here: Rs 1,000 crore will go into the construction of the store while rest will be used in setting up multi-channel formats including meeting places and experiential sto-res. The store will directly employ around 1000 people while another 1500 will be employed indirectly.

“Bengalore is a special city for us as we have active participation from our total value chain – IKEA Foundation, IKEA suppliers, IKEA social entrepreneurs and now IKEA retail. This city is truly cosmopolitan with many people moving in to find new opportunities,” he said.

With the IKEA store, we will contribute to a better everyday life for all Bengaloreans with well-designed, functional home-furnishing solution. We will contribute positively to the sta-te’s development by creating employment opportunities, investing in skill/competence development, gro-wing local sourcing to meet India and global demands and bringing IKEA’s global best practices to grow India’s retail and manufacturing sector,’’ said Betzel.

The store that will stock over 7500 products is expected to attract over seven million visitors a year. It will have 2000 parking slots and a 1000-seater restaurant serving Swedish and Indian cuisine.

It will also have a supervised children’s play area called “Smaland”. Speaking on the occasion, Deputy chief minister of Karnataka, G Parameshwara said, “IKEA's entry reflects Karnataka's progressive policies for ease of doing businesses.

We see IKEA as a strong partner in increasing local manufacturing in the state and bring best practices in retail and supply chain. We also see IKEA as a great contributor in the state’s sustainability efforts.

IKEA will create many jobs and its commitment to employ 50 per cent women will enable many more women in the state to join the workforce.

We will extend full support to facilitate ease of doing business here and to be able to open the store very quickly to IKEA.” India has been a sourcing partner for IKEA in the last 35 years.

It currently has 55 suppliers in the country   who directly employ 45,000 people and some 400,000 people are indirect beneficiaries of this supply chain. IKEA Foundation, its philanthropic arm, has invested $175 million in India in the last 18 years and has already touched the lives of some 120 million needy children. It has a mandate to improve the lives of 1 million women by 2019.

IKEA reported an overwhelming customer response in its first story in Hyderabad. The store received over a million visitors in six weeks into its launch.

The second IKEA store will come up in Mumbai by end of next year.  The Swedish company has a mandate to establish stores in 49 cities across the country by 2030.

IKEA has 423 stores in 50 countries with a sales volume of 38.3 billion euros. Some 936 million customers visited IKEA stores in FY17 and more than 2.3 billion people visited IKEA online. It currently has direct people strength of 194,000.