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Ikea's first Indian store to open in Hyderabad in July

Restaurant to offer biryani and samosas, but Swedish meatballs are off menu

A customer takes a nap at an Ikea store in Beijing, China.   © Reuters

NEW DELHI -- Six years after announcing its ambitious long-term goal of opening 25 outlets in India, Swedish furniture group Ikea is ready to launch its first store next month, in the southern city of Hyderabad. It will offer affordable home furnishings and an in-house restaurant serving local delicacies -- but not the company's regular meatballs.

Ikea has invested close to 10 billion rupees ($147.4 million) in its Hyderabad store, and recruited about 1,000 people, half of them women, an Ikea India spokesperson told the Nikkei Asian Review on Friday.

The 1,000-seat restaurant in the store will not offer Swedish meatballs made of beef and pork, bearing in mind cultural sensitivities, and instead there will be chicken and vegetarian varieties. India's majority Hindu population consider cows to be sacred and do not eat beef, while pork is taboo for Muslims, who make up 14% of the country's population of 1.25 billion.

The restaurant "will have chicken and vegetarian balls," spokesperson Nivedeeta Moirangthem said. There will also be popular Hyderabad delicacy biryani and other famous Indian dishes such as samosas and dal makhani. "We will localize as per the market," Moirangthem said.

Spread over 37,000 sq. meters, the first Indian store of the world's largest furniture retailer, which is expected to open in the second half of July, will feature about 7,500 home furnishing products aimed at middle and low-income buyers. "About 1,000 products will be priced at less than 200 rupees ($3) so that it becomes affordable for many people," the spokesperson said. Low-priced products will include home and kitchen accessories such as candles, cups and mugs.

Ikea's next stores will be in India's financial hub of Mumbai, the southern city of Bangalore, and Gurugram near New Delhi. Of these, the Mumbai store will open in 2019. "When we launch in Mumbai, we will also launch our e-commerce [business in India]," Moirangthem said.

In the Indian furniture market online retailers such as Urban Ladder and Pepperfry -- which also have some offline stores -- are popular. Ikea's entry will surely add to the competition.

Ikea sees huge opportunity in India, Asia's third-largest economy. It began construction of its Hyderabad store in 2016, more than three years after the Foreign Investment Promotion Board approved the company's long-term investment plan of 105 billion rupees, to open up to 25 stores. In 2012 India approved reforms allowing 100% foreign direct investment in single-brand retail and 51% in multi-brand retail, with some riders.

Before opening the store, Ikea first wanted to understand how Indian people live in their homes so that it could make its products relevant to them. It studied hundreds of Indian homes.

The company has been sourcing for three decades from India, where it has about 50 suppliers with 45,000 direct employees and 400,000 people in the extended supply chain.

Indian customers, meanwhile, are unused to Ikea's core concept of "do it yourself" -- buying furniture, taking it home and assembling it on your own. To overcome this, the company has tied up with UrbanClap, a mobile-based services marketplace, to offer furniture assembly services in Hyderabad.

Adjusting to local requirements will be key for the company to grab a slice of India's retail market which, according to an India Brand Equity Foundation report, is projected to touch $1.3 trillion by 2020, from $672 billion in 2016.

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