After setting up its first Indian store in Hyderabad, Ikea is set to enter its third market. The Swedish home furnishing company broke ground in a ceremony in Bengaluru on Thursday.
Ikea will be investing Rs 1,000 crores for the Bengaluru store and will reportedly generate employment opportunities for 800 direct and 1,500 indirect employees, according to a tweet from Karnataka’s minister for heavy industries IT, BT science and technology KJ George, who presided over the ceremony.
Ikea acquired 14 acres of land from the Bengaluru Metro Rail Corporation (BMRCL) behind Nagasandra Metro Station in 2017. The Bengaluru store, which will open in 2020, will be spread across 4,00,000 square feet.
Ikea announced its entry into India five years ago, committing an investment of Rs 10,500 crore for 25 stores across the country. The first store opened in Hyderabad on August 9, while the Mumbai store is slated to open next year. The Bengaluru store will be followed by Gurugram.
In the next phase of expansion, it will open stores in other cities, including Ahmedabad, Surat, Pune, Chennai and Kolkata, and is looking to have more than 25 touchpoints (storefronts of various sizes and formats) across a number of cities by 2025. This also includes store-in-store formats.
During the store launch in Hyderabad, Ikea also announced that it had acquired four land sites in first-priority markets like Telangana, Maharashtra, Karnataka Delhi/NCR, and continues to look for suitable sites in different cities. Its plan is to open retail stores in more than 40 cities across the country. It is also in the process of building an online presence, which it aims to launch by next year.
The 4,00,000 square-feet Hyderabad store sparked much excitement during its opening and saw people from various parts of the country gathering to check out the popular home furnishing brand. Nearly 40,000 people visited the store on opening day.
Ikea is betting on affordability to capture the Indian market. Products in the current store start from as low as Rs 15, with 1,000 products being priced below Rs 200. While Ikea claims that 500 out of
its 7,500 products are promote sustainability, it faced backlash for cheap plastic items that were being sold.