International Swedish furniture major Ikea made it clear at the recently concluded, three-day Marketing & Retail Conclave of Technopak that it has no immediate plans to come to the Indian market, as long as 100 per cent foreign direct investment (FDI) is not allowed by the laws of the land. What’s more, the company said that even if 100 per cent FDI is allowed in retailing right away, it will take Ikea about 3-4 years to come to the Indian market.
There were media reports that the Swedish furniture major is likely to enter the Indian market soon.
Speaking to Indiaretailing, Staf Lenders, property and establishment manager, Ikea, India, said, “We would need at least 3-4 years to come to India even if 100 per cent FDI is allowed here. We would need this time for training of our manpower and other preparations associated with setting up operations.” Asked about the proposed talks that Ikea is supposed to have carried out with Indian real estate major DLF, Lenders said, “We had a meeting with them in September, but we are not negotiating any deal with them. The only negotiation that we are carrying out is with the government.” Lenders expressed hope that FDI norms in the country will soon change.
Providing a counterpoint to the retail revolution being witnessed in the country, Lenders in his presentation at the conclave said that he is very negative about the way the retail phenomenon is happening right now in India. He said that owing to a herd mentality, many players are joining the retail bandwagon, but it is to be seen if they can come up with sustainable and successful business models.
Lenders said, “India is not ready for big retail. We are sure it will be, but I have not seen returns for the Indian retail companies. I am not impressed by the turnovers.”
– Raja Ghoshal