Ikea files final paperwork for India entry

Swedish retail giant Ikea moved a step closer to setting up retail operations in India, saying on Monday it had filed the final paperwork with the Indian government for its entry.

Ikea files final paperwork for India entry

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

“Once our application is approved we will develop a solid plan for the establishment of Ikea stores for many years to come, generating investments and new employment,” group chief executive Mikael Ohlsson said in a statement.

Ikea said it filed the final document this week in connection with its application, adding it saw India an important market for the flat-pack furnishings group which has been sourcing goods from the country for 25 years.

“We will continue to increase our sourcing in India from both existing and new suppliers,” Ohlsson said.

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.

The government last month cleared the entry of multi-brand foreign retailers into the Indian market as part of a blitz of financial reforms ending years of policy paralysis.

India has agreed “in principle” to give Ikea seven years to meet guidelines stipulating foreign, single-brand retailers sell products made from 30 percent locally sourced content instead of an initially proposed one year, local media has reported.

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

Ikea’s request to enter India has been hailed by the government as a sign that global investor confidence in the country is still strong despite a sharply slowing economy, a slew of corruption scandals and heavy-handed bureaucracy.

The retailer sees huge potential in India’s burgeoning middle class whose “wallet is still thin” but who want “inexpensive but nice home furnishings”, Ohlsson has said.

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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.