MUMBAI • In a milestone that has been more than a decade in the making, India's first Ikea store will open today, bringing inexpensive Nordic-inspired furnishings and food to the world's fastest-growing middle class.
Ikea expects to welcome as many as six million visitors a year to its 5.25ha complex in Hitec City, on the outskirts of Hyderabad, India's fourth-biggest city. The 37,160 sq m showroom contains some 7,500 products, of which about 1,000 will sell for less than 200 rupees (S$3.98) apiece. It is the first of 25 stores Ikea plans to open across the nation by 2025.
Ikea's launch comes at least 12 years after it started studying India, which is poised to overtake the United States to become the world's second-largest middle-class market by 2022. By then, sales of homeware and home furnishings will probably reach US$15.3 billion (S$20.9 billion) from US$12.9 billion last year, according to researcher Euromonitor International.
"Rising incomes and affluence make for an attractive market in India," said Ms Sowmya Adiraju, a research analyst with Euromonitor in Bengaluru, in an e-mail. "Indian consumers are curious to see what Ikea has to offer and the retailer is well positioned to meet this demand."
The world's biggest furniture retailer has invested more than 10 billion rupees on its first foray into India. It is counting on new customers in industrialising nations bolstering sales growth in the face of brand fatigue and increased competition from online retailers, such as Amazon.com and Made.com, in established markets.
"We know that we are bravely stepping into a low-price zone," Mr Jesper Brodin, Ikea Group's chief executive officer, told reporters yesterday. "We are prepared to take some risk in India."