Multiplying IKEA Experience

Having opened its first India store in HITECH City, Hyderabad, IKEA is now racing against time to open 24 more stores in nine cities over next 72 months.

- Ashish Sinha

WHAT WOULD YOU think of a company that takes six years to open its first outlet after getting the requisite permissions? And what would your thoughts be if the company happens to be a multinational giant that is seeking to enter the Indian market?

The company in question is Swedish multinational and the world’s largest furniture retailer IKEA, which recently opened its first store in the country, six years after getting the approvals. In the past six years, its India arm, IKEA India, has spent more than Rs 5,250 crore and opened one store, started construction of its second (Navi Mumbai) and third store (Bengaluru); acquired land for another couple of stores and is currently in the process of acquiring land across half a dozen cities for further expansion. For the record, IKEA India’s first store in HITEC City, Hyderabad, which opened in August, took two years to build.

No doubt it has taken rather long for IKEA India to get its business up and running. So what really slowed down things for IKEA? Bureaucratic red-tape and obfuscation that make it so difficult to do business in India is what you expect to hear. But you are in for a surprise.

“Time has never been the only factor while establishing a business in India. It takes time and effort to build a strong brand rooted in our values and connected to the society. There is no compromise and short cut,” says John Achillea, Hyderabad Store Manager and MD, IKEA Telangana. Agrees Peter Betzel, CEO of IKEA India. “IKEA’s decision to enter India was never dependent on time,” he adds. “India is a long-term investment and one of the biggest markets for IKEA and we are prepared to take risks for years to come,” he says.