The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
NEW DELHI / AFP
Ikea has announced that it would invest nearly $300 million in a north Indian state as it forges ahead with plans to start selling its low-cost furniture in the giant market next year.
The Swedish flat-pack behemoth said it had signed a memorandum of understanding with the state of Haryana, which neighbours the capital New Delhi, with a view to opening stores there.
Ikea said it would invest 20 billion rupees ($297 million) in the state, hire 1,000 workers directly and employ a further 3,000 indirectly in services such as furniture assembly and delivery.
Although it sources some of its materials in India, Ikea does not currently have any shops in the country.
It has announced plans to open its first stores in 2017, hoping to win over consumers in the vast market of 1.2 billion, targeting urban dwellers with rising disposable income.
“Haryana is a prioritised state for Ikea due to its open investment climate,” the group’s India chief executive Juvencio Maeztu said in a statement.
Ikea has already signed memoranda of understanding with several other Indian states, with the first store slated for the southern IT hub of Hyderabad in the summer of 2017.
Haryana was hit by unrest last month, with 28 people dying in caste protests that temporarily cut off part of the water supply to the capital.
Ikea is a multinational group of companies that designs and sells ready-to-assemble furniture (such as beds, chairs and desks), appliances, small motor vehicles and home accessories. As of January 2008, it is the world’s largest furniture retailer.
It was founded in Sweden in 1943 by then-17-year-old Ingvar Kamprad, who was listed as one of the world’s richest people in 2013. The company is known for its modern architectural designs for various types of appliances and furniture, and its interior design work is often associated with an eco-friendly simplicity.
In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed Ikea to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.
The Ikea group has a complex corporate structure, the purpose or one of the purposes of which may be to avoid tax, and is controlled by several foundations based in the Netherlands, Luxembourg and Liechtenstein.