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Ikea doubling product sourcing from India

The world’s largest furniture retailer Ikea said it has decided doubling product sourcing from India by 2020, demonstrating the Swedish company’s commitment to comply with the 30% local purchase norms as it makes its commercial debut in the world’s fastest-expanding major economy. The furniture retailer has said it will double sourcing from India to 600 million, up from its existing base of 318 million. Managing director Jesper Brodin, said adding that Ikea is a production-based retailer, implying its commitment to local sourcing ¬ a pre-requisite for operating in India. “Asia is our second-biggest region for sourcing: While China offers the cheapest supplies, we see a lot of sourcing opportunities from other markets in Asia, Africa and South America,“ Brodin said. According to India’s retailing policy, overseas companies have to mandatorily meet the 30% local sourcing norm, preferably from smaller suppliers. The Swedish company’s first two stores in India would be in Hyderabad and Maharashtra, and both are expected to start in 2018.The retailer plans to set up 25 stores in the country by 2025 at an investment of Rs. 10,500 crore. The company said it plans to hire 500-700 direct employees for each store. Sandeep Sanan, the new business development manager for Ikea South Asia, said the company is looking to add suppliers to its existing categories, such as textiles and rugs, and add new categories, such as plastics and metal. Ikea has about 50 suppliers from India in product segments such as textiles, mattresses, and kitchen accessories. It is now exploring the prospects of bamboo plantations in the North East, and adding new categories from among the existing suppliers, Sanan said. The company also plans to set up its first distribution centre in Pune. “We want the manufacturing to be globally competitive.

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