Ikea entering next India growth phase: Juvencio Maeztu (2024)

After investing ₹10,500 crore in India’s retail market over the past decade, the company is now entering its next phase of expansion in the country, said Maeztu, who is also its board member and chief financial officer . The group is also preparing investment plans to open more stores in India and step up local manufacturing. Ingka Group is also stepping up investments via its Ingka Group verticals. Maeztu, who was CEO of Ikea India from 2012 to 2018 when the world’s largest furniture retailer opened its first store in the country, said the company is actively engaging with the government and suppliers to increase India’s furniture manufacturing capabilities. Edited excerpts:

Ikea has invested ₹10,500 crore in India. Where do you think the market is in terms of evolution within the Ikea ecosystem?

Now we’re at a point where we see a win-win for the future. The last year has confirmed that Ikea can play a role in India in supporting people to access a better life at home at affordable prices. The second part is that I want India to conquer the world with its manufacturing. Indian consumers need more Ikea. The Indian economy needs more exports, more industrialization, and economies of scale. In this situation, we are ready to go to the next step to grow together with India by developing more manufacturing capabilities. Of course, for that to happen, we need to have harmonized standards. We need to have international standards that whatever is produced in India can be exported with the same international standards. At the same time, we need to develop certified raw materials. So when you combine these i.e certified sourcing, along with the growth of the retail sector and the international standard for production—these three things will secure India’s position as a sourcing hub and also assist the growth of Ikea in India.

Ikea has been sourcing from India for decades. Has India’s share of global sourcing gone up?

It will be 3%, more or less. Global participation of India in the furniture export market worldwide is only 1%. So, imagine the possibilities we have for India to play a big role in global exports. By developing Ikea in India by having international standards, we can also use this to export worldwide. We have already doubled global sourcing from India in the last four to five years. The interesting thing is that we used to procure only textiles and now we are exporting furniture, mattresses, sofas etc. Now is the time to grow much more. Because if we doubled exports with very little Ikea presence, imagine what we can do.

What will the next phase of Ikea’s growth look like ?

It’s in progress and then, of course, depending on how we can ensure successful harmonization of Indian quality standards with international standards. All that will help us invest more in the country. We really want to announce some significant investments for the future both on the retail side and also in the way that the sourcing can be developed. For example, to export, we need to have certified raw materials. It’s not enough to just have any raw material. This requires a systemic change in the industry. To export, we need to secure big factories with the same standards, the same quality, and the same type of design, wherein a part of that goes to the Indian market, and part of that goes to export. These are things that need a lot of discussion and collaboration with the government, with the industry, and with the suppliers, so we all speak the same language. On the retail side, it’s now time to grow in cities where we are present.

The next month will cement the development of exports and the development of the retail part.

Can you share more details on what kind of startups Ikea may invest in?

For example, we have an investment in Livspace. But we don’t have an announcement yet about which other companies we have. It’s in progress.

What opportunities do you see in the energy market in India?

In energy, we invest primarily in solar and wind and consider other new energy innovations in the future as well. Then what we do is we partner with the local companies in every country, where we can really invest. We will do that in India, and I know the government has plans to develop the renewable energy sector as well.

Ingka Investments, the group’s investment arm, has indicated an interest in investing in India.

We are now setting up a holistic Ikea in India. This means that we have Ikea Retail and Ikea Supply (sourcing). We have set up big shopping centres, and we also have a GBO (global business operations) to provide financial, digital and HR services in the world. Ikea Foundation is also present here. So we are coming to India with a full menu of Ikea.