SHARE
COPY LINK

INDIA

Ikea closer to India market entry: report

India's government and the Ikea Group are nearing a compromise over local-sourcing rules that have been delaying the Swedish retailer's entry into the country, a report said on Tuesday.

Ikea closer to India market entry: report

India has agreed “in principle” to give Ikea seven years to meet guidelines stipulating foreign, single-brand retailers sell products manufactured from 30 percent locally made or sourced content, the Economic Times newspaper said.

Originally the government had asked Ikea to comply with the local sourcing rules within one year of starting operations. The company countered with a request for 10 years grace.

Ikea in June asked India for permission to launch retail operations in India, promising to invest $1.9 billion over the coming years — part of a broader push into emerging markets including China and Russia.

The request was highlighted by the government as a sign that global investor confidence in India was “still intact” despite a sharply slowing economy, a slew of corruption scandals and suffocating red tape.

The sourcing stipulation is part of efforts by the left-leaning government to defuse populist opposition to the entry of big foreign retailers in a country where small mom-and-pop stores dominate.

Given Ikea’s high profile and recent government statements that it wants to make India a “more business-friendly place”, most analysts have said they believe a compromise will be found.

There was no immediate comment available on the newspaper report from Ikea or the government.

Ikea sees huge potential in India’s burgeoning middle class whose “wallet is still thin” but who want “inexpensive but nice home furnishings”, Ikea chief executive Mikael Ohlsson told AFP on a scouting mission to India two years ago.

Ikea’s move into India was spurred by a government decision at the start of the year allowing foreign companies to own 100 percent of “single-brand” retail ventures, up from an earlier cap of 51 percent.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

IKEA

Ikea will buy back your used furniture at up to half the price

In the run-up to what would in normal times be the festive season sales rush, Ikea has vowed to buy back used furniture from customers to resell – and pay up to 50 percent of the original price.

Ikea will buy back your used furniture at up to half the price
Got any pieces of Ikea furniture at home? You may be able to get rid of it and get money back. Photo: Fredrik Sandberg/TT

Ikea, the world's largest furniture chain, said Tuesday it would begin buying back used furniture from customers to resell – and pay up to 50 percent of the original price.

The “Buy Back Friday” scheme, timed to coincide with the “Black Friday” pre-Christmas retail frenzy, will run from November 24th and until December 3rd in 27 countries.

“Rather than buy things you don't need this Black Friday, we want to help customers give their furniture a second life instead of making an impulse buy,” said Stefan Vanoverbeke, deputy retail operations manager at Ingka Group, Ikea's parent company.

To address concerns its affordable, flat-pack products encourage overconsumption and waste, the Swedish company had previously said it would start renting and recycling furniture as part of an eco-drive.

Under its buyback scheme, the group said that “anything that can't be resold will be recycled or donated to community projects to help those most affected by the Covid-19 pandemic”.

“Some countries like Australia and Canada for example are currently testing different buyback services, but BuyBack Friday will be the first time that 27 countries do this together,” the statement added.

The Swedish giant employs over 217,000 people and has more than 50 outlets. Its annual turnover is around 40 billion euros ($46 billion).

The group did not specify how it would determine the price paid for second-hand furniture and customers will receive a voucher, not cash, for their products.  

As part of efforts to reduce waste, Ikea has already begun repairing and re-packaging products in every store that have been damaged in transit, as well as allowing customers to return products – including furniture – for resale or donation to charities.

SHOW COMMENTS