Mulling smaller stores in other cities to expand India biz: IKEA chief

In a Q&A, Susanne Pulverer says the Swedish firm aims at 5 mn footfalls at its new mega store in Bengaluru this year

IKEA is set to open its third large store in Bengaluru on Wednesday, spanning 460,000 sq ft. The firm aims to get 5 million customers to visit its new store this year. In an interview, Susanne Pulverer, CEO & Chief Sustainability Officer, IKEA India, talks to Sharleen D’Souza about its expansion plans in the country.  

After opening this store in Bengaluru, where do we see more stores opening up?

We are looking at different ways to meet customers with smaller stores like the one in Mumbai. We are also expanding in the markets where we have already opened big stores. We also have a large store launch planned in Gurugram, which will have a shopping mall to be developed with the sister company.

Will we see city stores in Hyderabad and Bengaluru as well, as you have large stores in these cities?

We will explore. There are some that have progressed quite far, like another city store in Mumbai. We are also planning to open stores in other cities, but that will be announced at a later date. The existing four markets are big cities with many people and one store and online is not enough. So, we need to look at how we can become more accessible and closer to so many people in these cities.

Will you look at other cities as well to grow?

We will also look beyond the existing cities we operate in. These are the plans I can share. We believe there is so much more to do in Bengaluru than opening this store. We're looking at cities beyond Mumbai, Delhi and Hyderabad.

Will you expand your online presence beyond the six cities you are currently present in?

What we have learned and what we know is that the whole omni channel experience is important for a good customer experience. To only have online doesn't give the full experience. Having a meeting point where one can experience the range physically is important. We are looking at developing an omni channel way. When you open online, you need all the services in place and you need the fulfillments really backed up. We look at it in totality when we expand further. We will focus on these markets, We look into other markets, but the focus will be working very intensely with these (existing) markets where we have started to expand.

Will there be further investments in India from IKEA?

When we entered India and open the first door four years back, we made a commitment of Rs 10,500 crore and that is what we are working on building and investing and growing within that frame.

While markets have opened with very few restrictions, how is demand shaping up currently?

We are happy that we right now have ease on the restrictions, even if we take precaution and still protect ourselves with the masks and hygiene, we can see people are keen to get back into stores to experience the real world, not only be online, so we see people coming, we see visitation increasing.

By how much will IKEA increase its sourcing from India?

We are 25 to 27 per cent locally sourced for what we sell in India and the long term target is 50 per cent. That means we need to move into new categories that needs to be developed by partners that work together with our sourcing team, here in India. It is a long term investment, but we believe that's the right way forward for all the good reasons to keep lower prices and be more affordable to contribute in society with employment and development of new industries. And, to be more sustainable with less transport and closer to the consumption. So all of it will be good reasons for us to source locally and increase our share. When we increase that (sourcing from India), and when it becomes more competitive, it will also mean more exports from India. So that's another way it will contribute to the Indian economy.

What are the sustainability initiatives you are taking for the Indian market?

We have a clear sustainability strategy around three pillars. The first is how we can contribute to a more sustainable and healthy living through our products and our solutions. The second is climate change, and circularity. Here we work on more energy efficiency in our premises to reduce co2 emissions. We want to move to zero waste, we are working on decreasing water consumption and increasing the share of renewable energy. We also move towards electrical vehicles for our home delivery. We have said by 2025, 100 per cent of our home deliveries will be fulfilled by electrical vehicles. And the last pillar is around people, equality and inclusion. If we talk about our own people it is to have gender diversity on all levels. There, we are actually very close to the goal.

Will there be any price increases?

Our ambition is to be affordable, that's extremely important. At the same time, everyone has been impacted by the pandemic.

I can't say there won't be (price increases), it all depends on how things evolve. We will try to be cost conscious and keep our prices, but sometimes there is also a need to do some adjustments. We always protect low prices. We absorb, we are also looking at our own costs. We also need to do some adjustments. So we are not immune to what is happening around prices, inflation, etc.