Ikea, a Swedish furniture manufacturer, stated on Monday that it expects its Hyderabad location, the first in the nation, to shortly reach operational breakeven.
The foot traffic at the Hyderabad store, which opened in 2018, increased from 2.90 million to 3.0 million during the course of the previous year.
The data, however, are not comparable because the Covid-19 outbreak caused significant movement restrictions in the previous year and the period before.
Susanne Pulverer, CEO of Ikea India, said in a statement to the media that the company is looking into various shop designs in terms of size to enter the market and be more accessible to customers. Online services would also complement it.
“I mean, when we invest, the initial years of an investment this scale are not lucrative, and that is typical when we enter new areas. Naturally, Hyderabad is the store we are focusing on to break even quickly, according to Pulverer.
She made a suggestion that the store might turn a profit by the next year. She didn’t confirm it, though.
The firm is committed to investing Rs 10,500 crore in the Indian market, and the official added that once the two forms in Delhi (Noida and Gurugram) are finished, the money will be spent.
In addition to two city shops in Mumbai, Ikea currently has three big format stores in Hyderabad, Navi Mumbai, and Bengaluru.
We can see that we have reserved a total of Rs 10,500 crore when we look at the projects in Delhi-Noida and Gurugram. Although they have not yet been fully invested, they will be once these projects that are in the works are completed. So naturally, the next step is to consider the new investments we are now developing, she said.
On Monday, the retailer of home furnishings announced that it was marking five years of retail operations in India.
According to a press statement from Ikea, the company currently employs 3,000 people across all of its markets, and its goal is to grow to 10,000 in the next several years with 50% gender diversity. Nearly 70% of the employees in the company’s outlets are from the neighborhood.
With a goal of reaching 50% in the upcoming years, local sourcing is a priority to make products even more affordable, it was said.