Why Hyderabad was chosen by IKEA for its first India store

Roman Schwartz
August 12, 2018

The Hyderabad store is the first of 25 outlets planned to open across India by 2025 and it follows Ikea's previous attempt in 2006 to reach the country's burgeoning middle class which fell foul of local regulations.

IKEA is opening first store nearly five years after it received government approval in 2013 to invest Rs 10,500 crore in the country to open retail stores.

Store manager John Achillea had stated that they were expecting 40,000 to 45,000 people.

Officials told reporters that they would approach the Indian government for approval to pump in more Foreign Direct Investment (FDI) but declined to give the timeline or the quantum of the additional investment.

The company now revised the number of stores to 40 across all formats.

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Since its 1943 founding in Sweden, IKEA has offered home furnishings of good design and function at low prices so the majority of people can afford them. And since children often sleep in the same room as their parents, one model bedroom includes a child's bed amid all the furniture.

The Indian IKEA restaurant seats 1000 people and has a menu of local dishes and adapted IKEA stables such as Swedish köttbullar med potatismos (meatballs and mashed potatoes).

IKEA India HR head Anna - Carin Mansson says IKEA has a non-negotiable commitment to hire 50 per cent women co-workers at all levels in India including forklift drivers and assembling co- workers. Moreover, 4,000 solar panels have been installed on the roof of the Ikea store in Hyderabad.

It has already acquired land at Navi Mumbai, Gurugram and Bengaluru and has begun work on the Mumbai property, which is expected to be ready by summer of 2019. "One is the Swedish unique range and one is the local range", the company said. "We met and interacted with 1,000 Indian families to understand what were their dreams, their frustrations and what they want".

Alongside standard Ikea furniture like Billy bookshelves and Klippan "loveseats", the chain has "locally relevant products" like masala boxes, Indian frying pans called tawas, rice cake makers and mattresses with a coconut-fibre centre. IKEA has invested ₹ 105 billion in India. Like the products, the food is also affordable with biryani priced at Rs 99 and chicken meat balls Rs 149.

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