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IKEA CEO for more labour, land acquisition reforms to operationalize biz in India


The world’s largest furniture retailer, IKEA, is all set to mark their presence in Indian waters. The leading Swedish home furnishings brand feels that establishing a business in India has become much simpler than it used to be in the past.

We are happy with Government's efforts for improving ease of doing business in India: CEO IKEA
IKEA is planning to open 25 stores over the next 10 years in India and also plans to double its sourcing from India from 300 to 600 million euros by 2020.

India has made big progress in the last few years as far as establishing businesses in the country is concerned. It is easier to start a business in India keeping in mind foreign direct investment rules. The approval process on permits is also being fast-tracked.

While lauding the efforts of the Government, CEO IKEA India, Juvencio Maeztu also indicated that there should be more reforms in labour and land policies to help operationalise the business.

Speaking at FICCI’s annual retail, FMCG and e-commerce convention, Massmerize 2016, Maeztu emphasised on the fact that the Indian Government has been focusing on easing norms for setting up of new businesses, but policy changes are also required for their successful retail operations. He even mentioned that there should be separate ministry to look into the retail trade.

READ MORE: IKEA plans 25 stores in India over 10 years

Maeztu said, “We are extremely happy working with the Government at the Central and the state level when it comes to establishing business. We feel there is a genuine attitude towards doing things better. We are a satisfied lot… But there are four things which are necessary in operationalising the business.”

The four things that he pressed for are –

  • An enabling environment for land acquisition
  • Labour reforms
  • A proper retail policy
  • Labelling issues in the interest of consumers

He added, “We are committed to a policy of 50 per cent women and 50 per cent  men in our co-worker base, which means we have to create preconditions for women to join us. We have to have policies for supporting women to work in the evening or night shifts, which is not possible now.”

READ MORE: Local sourcing conditions: IKEA for ‘less detailed regulations’

Talking about modern retailing he said, “Modern retailing is about two things – easy movement of goods as the goods stuck for more time tends to increase the cost and at the same time protecting the consumer rights.”

He said at IKEA, when it come to modern retailing, they are taking care of both the things.

IKEA is planning to open 25 stores over next 10 years in India. It also plans to double its sourcing from India from 300 million euros to 600 million euros by 2020. About 70 per cent of the current sourcing is in textiles and rugs.

The strategically-located, 13 acre store in Hyderabad is close to HITEC City, the IT hub. The next store will come up in Mumbai, where the company has purchased 24 acre land.

READ MORE: IKEA to increase cotton sourcing from India

Maeztu said that this will be followed by opening more stores in Bengaluru and Delhi NCR.

He said the company has plans to open two to three retail stores every year. Ahmedabad, Chennai, Kolkatta, Pune and Surat are the other cities IKEA is looking at.

IKEA is investing Rs 700 crore on the Hyderabad store spread over 400,000 sq feet. It will hire 500 direct workers and provide 1,500 indirect jobs.

READ MORE: IKEA to open 400,000 sq. ft store in Navi Mumbai

It will host 5-6 million customers every year. The customers will be able to touch and feel the products at the store and they will also have the option of ordering the same online.

IKEA has been sourcing from India for 30 years for its global stores. The company has 328 stores in 28 countries.

READ MORE: IKEA to open first store in Hyderabad in 2017