IKEA to roll out 10,000 sq ft compact stores for smaller cities across India in major retail strategy shift

Furniture giant IKEA is planning to roll out smaller, compact-format stores, marking a “huge shift” in its strategy, to be more accessible for Indian customers.

The company, currently in its second phase of growth in India, will be expanding across smaller cities in the country through a network of small-format stores developed according to the need to the specific locations and areas. These stores could be as small as 10,000 square feet, a stark contrast to its typical large-scale outlets, making them ideal for neighbourhood shopping malls and high street locations, IKEA India country expansion manager Pooja Grover told PTI.

“We are trying to integrate various aspects and offer different kinds of experiences across different formats... From a size point of view, this is a huge benefit for us in India as well, where we will be more accessible to many people," she said, adding "this size option opens up a lot of accessibility" for IKEA.

The manager further added that Grover said smaller stores will allow the company to be more agile and establish a presence faster. IKEA is also in talks with real estate developers to support this new model, she added.

So far, IKEA has three large-format stores in India — in Hyderabad, Mumbai, and Bengaluru — and a city store in Mumbai. Two more are on the way for Gurugram and Noida. The company also recently launched online sales in Delhi-NCR and nine other markets to support its expansion.

Here are some features of the new smaller IKEA stores:

• These compact stores will feature a limited physical display but give customers access to IKEA’s full catalogue of around 7,000 products through digital platforms.
  
• Customers will be able to order items for home delivery, pick them up at collection points, or use third-party services.
  
• Although the brand is currently focused on six key markets: Hyderabad, Bengaluru, Mumbai, Delhi NCR, Chennai, and Pune, it is also exploring tier II cities for future growth.
  

Earlier, in 2013, the government of India had approved IKEA’s FDI proposal of Rs 10,500 crore to open 10 stores over 10 years. In addition, Ingka Centres, part of the Ingka Group that runs IKEA’s retail business, is investing €1 billion to develop two retail destinations in Gurugram and Noida under its Lykli brand.

IKEA opened its first Plan & Order Point in Bengaluru, a 740-square-metre space where customers can receive personalised consultations, home have three standard stores currently in the country, all of which are large size, they are 40,000 square metre plus stores and we have one city store in Mumbai, which is around 7,500 square metres, and now we have a range of optical design support, and installation services, or plan their spaces on a DIY basis.

Meanwhile, IKEA India CEO Susanne Pulverer said earlier this year that the company is targeting profitable growth in the coming year and is in talks with the government to secure approvals for its next phase of foreign direct investment (FDI).