Sweden's Ikea pitches to enter India

[SpArK]

Sweden's Ikea pitches to enter India​

By Penny MacRae (AFP) –

NEW DELHI — Swedish home furniture giant Ikea pitched Monday for fast-growing India to open up its huge retail market to foreigners and said it planned more stores in emerging market giant China.
India's tight investment rules restrict overseas retail firms to "back-end" wholesaling -- except for single-brand outlets such as Nokia or Reebok -- to protect local, family-run stores which fear being driven out of business.
Ikea chief executive Mikael Ohlsson urged the government to relax the strict regulations to allow the company to open its superstores in India, saying there was "room for all players."
The furnishings chain, which sources 500 million euros (655 million dollars) in textiles and other goods from India annually, plans to boost that figure to one billion euros "within three to four years," he said.
And if Ikea -- famed for its flat pack stylish furniture -- could open up stores in India it could supply at least half the volume of goods from Indian production sources as it does in China and Russia, he added.
"We believe we can create employment -- jobs in cities and outside cities, we can be part of transforming industry," Ohlsson told AFP in New Delhi.
The privately-held Ikea, which uses its profits as a means to invest in social programmes, could also help with upgrading Indian production technologies in such areas as textiles, plastic goods and other products, Ohlsson said.
Ikea sees huge potential in India's burgeoning middle class, estimated at around 300 million and set to climb, whose "wallet is still thin" but who want "inexpensive but nice home furnishings," Ohlsson said.
Ikea believes it could replicate in India its success in neighbouring China where Ikea stores are "highly appreciated," said Ohlsson who is visiting India to inspect Ikea's 125-million-euro South Asia development programme helping children and women.
"If you go to Ikea stores in Beijing or Shanghai, they are as busy as London," he said. "That's a scenario I can see in India."
Ikea, which has annual global sales of around 30 billion dollars, already has 10 stores in China and is looking at opening around five more in the next few years to meet demand, Ohlsson said.
Foreign retailers are seeking to develop new sales outlets in the face of saturated Western markets, and India and China with populations of more than one billion loom large in their sights.
Ohlsson met with India's Commerce Minister Anand Sharma during his visit to press for changes in the retail ownership legislation.
"It was fantastic to have an opportunity to describe what we could see for the future and how we could participate," he said.
The left-leaning Congress party-led government recently kicked off public debate on opening up the 500-billion-dollar-a-year retail market to foreign investors.
Ikea has a long-term business model which makes it hard to conform to Indian rules requiring foreigners to set up joint ventures, Ohlsson said.
The company shelved plans to enter India's retail market in 2009, saying it would wait until the country allowed it to "fully own its retail operations."
Ikea is one of a slew of global retailers that include France's Carrefour and Wal-Mart of the United States pushing the Indian government to open up its retail sector to serve consumers in the country whose economy is growing by nearly nine per percent.


AFP: Sweden's Ikea pitches to enter India

 

[Kompromat]

IKEA is present in Pakistan , btw its great you will get cheap middle standard furniture.

 

[su-47]

I have shopped at Ikea in Singapore. Good quality for very reasonable (sometimes very cheap) prices.

Its a good thing for the Indian industries. They will really be forced to up their game. Ikea is a real competition and to hold their own in the market, Indian industries will have to become world class.

Competition is the key to efficiency. Hoping some Indian manufacturers will rise up to the challenge.

 

[Ahmad]

I like IKEA, it has got good quality products with not very high prices.

@BENNY: Have you been to IKEA? it is massive with unlimited number of products.

 

[SpArK]

I like IKEA, it has got good quality products with not very high prices.

@BENNY: Have you been to IKEA? it is massive with unlimited number of products.

Yes i have been to the one near Grangetown.

Even worked inside a few across UK when i had this stock taking job which infact was awesome. Traveled all around UK , even in remote towns which was absolutely breath-taking.

You should try getting a job like that if u are looking for a part time..

Try orridge stock taking. I worked with them for a long time.


Stocktake Solutions, Stock Inventory Services, Retail Stocktake, UK

 

[Bang Galore]

It's still quite some distance away guys. India allows only 51% foreign ownership which is not something that IKEA is happy about so they recently announced that they were putting their Indian plans on the back burner. This is just a statement asking India to relax the rules on ownership. That might or might not happen anytime soon.

 

[Ahmad]

Yes i have been to the one near Grangetown.

Even worked inside a few across UK when i had this stock taking job which infact was awesome. Traveled all around UK , even in remote towns which was absolutely breath-taking.

You should try getting a job like that if u are looking for a part time..

Try orridge stock taking. I worked with them for a long time.


Stocktake Solutions, Stock Inventory Services, Retail Stocktake, UK

Yes, that is the one in Grangetown, i went there the other day, massive sales and it was so busy. I cant afford part time jobs mate, even my present job is under threat. Dont know what to do if we lose our jobs.

 

[SpArK]

Yes, that is the one in Grangetown, i went there the other day, massive sales and it was so busy. I cant afford part time jobs mate, even my present job is under threat. Dont know what to do if we lose our jobs.

I used to roam around in that Newport road. There are lots of stores like Maplin, Pcworld,dunelm,Halfords etc..

That day is never complete without a visit to KFC or TGIF there.

Jobs are of big issue now. I heard that from my friends in Cardiff. Some of them who are still students and are working in some restaurant owned by a punjabi guy in a remote town.

 

[Skeptic]

NEW DELHI — Ikea, the inexpensive and stylish Swedish home retailer, is not earning any money in India. But the company is spending it here, the chief executive, Mikael Ohlsson, said Monday.


Ikea, which has 317 furniture and housewares stores worldwide, scrapped plans last year to open dozens of stores in India, after the Indian government would not lift limits on foreign investment in the retail sector.

Despite the setback, Mr. Ohlsson said he was determined to continue to do business in India. Ikea plans to double the amount of goods it buys from India, including textiles, in the next three to four years, to 1 billion euros, or $1.3 billion, he said at a news conference here.

Mr. Ohlsson said he had not given up on entering India’s retail market, and had an “interesting” meeting with a government minister about the issue during his visit here. The government requires name-brand foreign retailers to form partnerships with local companies before opening stores in India, and limits the foreign company’s stake to 51 percent. Mr. Ohlsson said Ikea could not meet that requirement.

Because Ikea, which is privately held, does not have to meet shareholders’ demands for quick and steady earnings, it can, and often does, let its stores operate for “years and years” before making a profit, he said. That makes it an unlikely partner for many investors.

“We don’t see ourselves as a normal retailer,” Mr. Ohlsson said. Ikea has tried joint ventures before, and they did not work, so the company avoids them, he said.

International retail brands, including Izod, Nine West and the Body Shop, have flocked to India in recent years, forming local partnerships, to take advantage of an economy that is growing faster than any other major country’s except China’s and a new middle class with disposable income.

India’s overall retail sales will be $380 billion in 2010, predicts Business Monitor International, a London research firm. It forecasts those sales will grow to $680 billion by 2014.

India’s government should not see Ikea as a threat to domestic retailers, Mr. Ohlsson said. The needs of the market are “so big there will be space for everybody,” he said.

Ikea “has more to do in markets where people do not have much money,” Mr. Ohlsson said, because the company focuses on customers whose “needs are big and wallets’ thin.”

Among other developing markets, the company has 10 stores in China, which are as busy as any in London, he said. Ikea is adding two stores in Beijing and two in Shanghai, he said.

The company also has 13 stores in Russia.

Ikea said it was investing about 125 million euros, or $163 million, in social programs to help women and children in India and South Asia. These investments make Ikea the largest corporate partner in the world to aid agencies including Unicef and Save the Children, representatives of those organizations said Monday.

Ikea had worldwide sales of 22.7 billion euros in 2009, up slightly from 2008, when sales for many other retailers shrank because of the global economic downturn.


Source: http://www.nytimes.com/2010/09/21/business/global/21ikea.html?_r=1

 

[Ahmad]

I used to roam around in that Newport road. There are lots of stores like Maplin, Pcworld,dunelm,Halfords etc..

That day is never complete without a visit to KFC or TGIF there.

Jobs are of big issue now. I heard that from my friends in Cardiff. Some of them who are still students and are working in some restaurant owned by a punjabi guy in a remote town.

Well, jobs are not difficult for people like you and me who are ready to do all sort of jobs. If there is nothing else left, you can do the delivery job.

 

[Awesome]

How does this have any world affairs relevance?