Swedish furniture firm IKEA is foraying into e-commerce with a launch of its online delivery system ahead of the opening of its first physical store in Mumbai.

A year after its first Indian store opened in Hyderabad, the Swedish furniture retailer is expanding to Turbhe, Navi Mumbai. But, reversing its previous strategy of launching the online market with the opening of the store, IKEA has confirmed that online shopping services will precede the physical store.

In addition, the home furnishing giant will also open smaller stores across the country for distribution, pickup, and customer service purposes. These outlets will be about 50,000 to 150,000 sq. ft. in size. “We have committed to invest Rs 10,500 crore in India. Of this, one-third has already been invested,” said IKEA India CEO Peter Betzel.

The Navi Mumbai outlet will be IKEA’s second branch in India, with the 4.3 lakh sq. ft. store under construction since 2017. This is part of its plan to reach 49 cities with over one million population by 2030, and establish 40 smaller centres across ten cities.

The distribution hub for the Mumbai online store will be located at Chakan, Pune, partnering with IndoSpace Industrial Park. IKEA has collaborated with UrbanClap to help install furniture in buyers’ homes.

“The ambition is to be present in as many Indian cities as possible through different channels,” said Betzel. “In India, we would like to reach 100 million customers in three years with a multi-channel approach.” This move is thought to be part of its strategy to reach a younger consumer base and is likely to challenge local retailers like Godrej, Urban Ladder, Furlenco, Fabindia, etc.

Betzel said the company planned to open more megastores in big cities like Bengaluru and Delhi NCR, adding that work was already in progress for these sites. In the last year alone, over the Hyderabad store saw over 4 million visitors.

First Published:Aug 19, 2019 12:46 PM IST