News, Hyderabad: Swedish Home furnishing giant IKEA, popular for its simple designs and ready-to-assemble furniture appliances and home accessories laid the foundation for its first store in India, in the Hitec city of Hyderabad on Thursday.
The store, to be spread over 4 lakh sq feet, is expected to see an investment of Rs 700 Cr and provide employment to 2,000 persons when it starts its operations by mid-2017. The company has bought 13 acres in HiTec City, the software hub of Hyderabad.
The groundbreaking ceremony took place in the presence of deputy CM Md Mahmood Ali, chief secretary Rajiv Sharma, GHMC Mayor B Rammohan and officials from Swedish embassy.
Unlike most companies which lease land, Ikea purchases real estate.
“We want to be our own landlord and then, we are here for many years,” Maeztu said at a press conference.
Its second store will come up in Mumbai. The company, which operates 328 stores globally, plans to open 25 stores in nine Indian cities. The company received government approval in 2013 to invest Rs.10,500 crore in India under the 100% foreign direct investment route.
Ikea expects Hyderabad store to draw 5-6 million customers a year. The store will feature 7,500 furniture and home furnishing products and a 1,000-seater restaurant serving Swedish and Indian cuisine. It will also have a play area for children and a day-care centre for children of its employees.
About 50% of Ikea’s workforce will be women. It will directly hire 500 employees and provide indirect employment to 1,500 individuals.
The store’s roof top will be covered by solar panels to power its energy needs of 3,000 kilowatts, said Preeti Budhraja, country customer relations manager at Ikea. all the water will be recycled and used for flushing and gardening. It will be a zero wastage facility, Budharaja said.
Ikea plans to increase local sourcing — to contribute to over 30% of its supply chain by 2025.
Ikea executives visited 500 Indian homes over the last two years to study customer preferences, Ulf Smedberg, country marketing manager of Ikea said. Its teams also conducted research on the culture and values of the people of Hyderabad to connect more closely with them.
Ikea’s in-house restaurant and bakery will serve Swedish cuisines such as salmon, chicken meatballs, mashed potato, cinnamon buns, croissant, blueberry jam and cloudberry, also called the gold of Sweden because the berry has to be picked one by one.