Packing in a long-term India strategy

Packing in a long-term India strategy
Packing in a long-term India strategy

As Swedish retail giant IKEA gets set to open up its first India store in Hyderabad this year, 'India Investment Journal' catches up with IKEA India's Deputy Country Manager Patrik Antoni to see how the New Year is likely to pan out for the company. How do you view 2017 for the company in India Very exciting times as we are working towards opening our first India store in Hyderabad by end 2017. Many people in India will soon have access to our home furnishings offer and a unique IKEA shopping experience. India is a very important market for IKEA. We have been here for 30 years sourcing products for our stores around the world. We are learning a lot from India and we strongly believe that India will influence IKEA globally in a very positive way, both in terms of a retail market and also growing our sourcing landscape with new suppliers, new categories and new materials. We plan to open 25 stores by 2025 in the major Indian cities. So far we have bought land in Hyderabad and Mumbai, we are in parallel looking for sites in the four prioritised cities- Delhi NCR, Bengaluru, Mumbai and Hyderabad. Has the journey to the first store been quite a tough one, given Indian retail sector constraints It has been a very positive journey so far, and we see good initiatives coming from government easing the way business can be done. We feel supported both from the central government and by the states. [caption id="attachment_10324" align="alignright" width="452"]

IKEA's furniture models set for the Indian market[/caption] IKEA has a very long term view on India and we want to do things right from the start. With the government and the states focusing on ease of doing business, processes have become faster and more efficient. We also see that there is a healthy competition between the states to attract foreign investments and it is motivating a lot of global brands to look at India. IKEA will bring of modern retail practices in India and we strongly believe that this will have a positive impact on the retail industry. There are many best practises that can be put in place from how to attract women to the work place and to allow for logistics operation at night to how to simplify store routines like allowing relabelling and perhaps do away with pricing on the product itself. It has taken us time to acquire land in India since our need is of very large parcels with specific demands - great visibility, easy access on a major highway and near metros or public transport. Are the FDI norms welcoming enough for international retailers; what are some hurdles that still remain We appreciate many positive steps towards facilitating ease of doing business - positive approach to local sourcing norms, efforts made to develop retail policies by the states, e- commerce policy, GST and many other steps. However, we are still on the way and many things have to evolve in order to make retail in India more modern and attractive. Entering India was a smooth process. Now, we are working with the central and state governments on ease of business operations and bring some of the global modern retail practices that will benefit the consumers and the industry. There is a need to simplify existing regulations around land, labour and labelling - to avoid extra labelling and extra costs thereby making products more affordable. Land laws around ground coverage, floor area ratios etc need to be simplified. Labour laws need to facilitate better working processes for women and do away with current restrictions on women working at night. What are the kind of investments, both tangible and intangible in terms of CSR, your company is making in the local economy IKEA believes in making a real difference to the society and community and not just implement CSR activities for the sake of it. We believe that an IKEA store will be good as it will make a positive impact on the local economy, through GDP, taxes and employment, the manufacturing sector and contribute towards gender equality and diversity. IKEA India has committed to employ 50 per cent women at all levels in the organisation. We will engage the local communities around our stores in direct and indirect services, thereby boosting economic activities. We also see a great results in our supply chain. IKEA has over the past 15 years implemented IWAY, our code of conduct, and we today see that our Indian suppliers are performing well on global levels with both strong social commitments towards the employees and strong environmental commitments. IKEA Foundation the philanthropic arm of IKEA, has been working on community projects with long standing partners such as UNICEF, UNDP and Save the Children since 2001, with an aim to create better opportunities for children and families. An amount of €250 million is committed for India so far. The foundation has impacted 178 million globally, out of which 100 million children are in India and millions of women so far. Recently IKEA Foundation in partnership with many public and private partners is involved in a skill building project for 1 million women in India in different sectors, including retail. IKEA aims to initiate cooperation with local social entrepreneurs through the “Next Generation" initiative through various community and skill building projects. Since 2012 IKEA has been building partnerships with social entrepreneurs around the world sharing knowledge about design, production, export and more. Working with IKEA gives social entrepreneurs access to a global marketplace, giving them a strong foundation for self-sufficiency and independence. In return, IKEA customers get the opportunity to buy limited edition collections of handmade and unique products. Today we work with two social entrepreneurs in India, Rangsutra and Industree, involving 1,200 women artisans. What would be some uniquely Indian features at IKEA stores in the country The IKEA concept is the same all over the world and we aim to offer a great shopping experience for everyone. We will bring the totality of this concept to India, offering the Indian customer the same great IKEA experience as we do globally. We will offer relevant solutions to enable a better everyday life for the many people. About 9,500 inspirational home furnishing products will be on offer, most of which will be the global IKEA range and some locally relevant range such as the masala box, idli maker, pressure cooker, tawa etc. The IKEA stores are a one-stop destination for home furnishing needs and a family destination also for a day out. There will be something for everyone in the offer and as in all IKEA stores, we will have a children's play area called SMALAND where parents can leave their children while they shop, and an IKEA restaurant for customers to eat. Every store will depict local living situations conditions to be relevant for the target group and we want to be accessible to as many people as possible. IKEA is learning about India. Over the past few years we have been focusing on understanding life at home or how people live in their homes through over 500 home visits and researches and these can be different from state to state. This is needed to not only assess living situations but also understand frustrations, needs and aspirations. So, a store in Delhi will offer the same experience as a store in London but at the same time certain unique products and the way the range is presented will reflect the needs and aspirations of people in Delhi. How do you forecast Indians will receive IKEA′s ready-to-assemble options Do it yourself (DIY) is an integral part of the IKEA concept and the idea is that when you buy IKEA products, you are able to take it home the same day and start using them instantly. Assembling the furniture especially with the family is fun and hopefully Indian customers will enjoy doing them. We also know that India has a high level of service expectations and we will have a very strong service offer from the beginning for assembly, pick and deliver and delivery services. As a first touch point with IKEA products for Indian customers, IKEA will have Hej Home exhibitions ('Hej' is Swedish for 'hello'), starting from Hyderabad. As part of this, customers can touch and feel IKEA products and find inspiration about how to do up the home. We will also organise some DIY workshops.

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