Bengaluru: Ikea India The Swedish furniture group is planning to source more products locally to combat rising inflation, as the Swedish furniture group looks to sell more to the country’s growing middle class with the launch of its latest store on Wednesday.
Four years after Ikea entered the Indian market, the company’s fourth and largest store in India opened in the country’s tech hub Bengaluru.
Spread over 460,000 square feet, the store will feature a wide selection of the brand’s home products and furnishings, including the popular Billy bookcase and Fargrick mug.
The furniture maker is betting big on home goods in Bengaluru, where rental space is more affordable and larger than Mumbai, where Ikea has two stores.
As prices rise, the average Indian is becoming more conscious of spending on non-essentials.
Retail inflation, which hit an eight-year high in April, eased marginally in the previous month.
“We need to work on local sourcing which will help us bring down the prices even further. We are working with our own costs to keep them as low as possible, thus we navigate with affordability Let’s do it,” Chief Executive Officer Susan Pulverer and IKEA India’s Chief Sustainability Officer told Reuters on Tuesday.
Ikea sources about 25% to 27% of its products locally, aiming to cut it by at least half over the long term.
The company said it has been sourcing textiles and carpets locally in India for a long time and plans to expand it to wood-based flatline furniture.
Nevertheless, the high import duty has always been a tough point for global corporates to operate in India, with the import tax on furniture being 25%.
“Import duties have an impact on prices and competition and are not a completely open market, but a part of doing business,” Pulverer said.
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