Ikea rushes to make up lost time on India expansion

New Delhi: Furniture giant Ikea is accelerating its India expansion after a nationwide pandemic lockdown last year delayed the construction and opening of new stores in one of its fastest-growing markets.

"If you have a lockdown you can't continue to construct," Peter Betzel, Ikea's chief executive officer for India said in an interview. "But now we are back in full speed."

The company opened its second India store on the outskirts of Mumbai in December and another in the southern city of Bengaluru is now on course to be completed in 12 months, Betzel said, adding that he was hopeful of meeting the target of rolling out shops in 30 Indian cities within seven years, Bloomberg reportrd.

Ikea, which opened it's first store in Hyderabad in 2018, also has just two years left to raise the ratio of goods and materials sourced from India — currently at 22 per cent — to at least 30 per cent to meet local regulations. Betzel said that was "absolutely" achievable.

"It's increasing as we speak," he said. "But this is not done overnight."

The Swedish furniture giant, known for its minimalistic aesthetics, is now making up for lost time as the Indian economy begins to rebound from the pandemic-induced recession and new Covid-19 infections slow down in the world's second-worst hit nation.

Ikea's ambitious plans for India, however, face potentially stiff competition after Asia's richest man Mukesh Ambani, whose conglomerate bought a local furniture e-tailer recently as part of its larger plans to dominate India's $1 trillion consumer retail market. Betzel, an Ikea veteran who headed the company's Spanish and German operations before moving to India in 2018, said there is ample space for multiple players to plug "a big need in India -- we are one part of that."

Ikea recently announced the acquisition of land in Noida, a satellite city adjacent to New Delhi, for a $753 million multipurpose mall that should be ready in about three and a half years, he said. Development on a second store close to India's national capital will begin this year and two smaller centers in Mumbai will open in 2021, in sync with its global expansion spree as it adds stores at a record pace despite worldwide virus restrictions.

In recent months Indians have returned in force to malls and markets, boosting retail sales.