Ikea is using India as a hub for making sofas and furniture for its global stores. This is expected to build volumes for the Swedish furniture retailer and, as a result, help bring down prices of its products in India.
One of the ways how Ikea plans to reduce prices of its products in India is by exporting locally-made products to its global stores to achieve economies of scale. Although the company has been sourcing from the country for 30 years for its stores worldwide, textiles constituted 70% of its exports.
Currently, however, as it inches towards running a full-fledged operation here, Ikea sees potential in sectors such as metal, plastic and glass. “We are now working on comfort items such as sofas and mattresses,” said Maeztu. “Simultaneously, we are also trying to develop products from materials such as coconut, sugarcane, bamboo and banana leaves -materials that have had no organised industry built around them.”
Globally, Ikea sources around 75% of its products from Europe and the rest from other places, including Asia. “Going forward, we will see more Made-in-India products in Ikea stores around the world,” Maeztu said.
Ikea plans to open 25 stores in India by 2025 for a proposed investment of INR 10,500 Cr.