IKEA Hyderabad: Make In India Vs Made In Sweden

Anvesh Reddy

Today, the world’s largest furniture retailer, IKEA, opened its flagship store in a sprawling 20-acre campus in the city's busiest locations, Hitech City. With a vision to provide world-class furniture at affordable prices, the Swedish manufacturer chose Hyderabad to make its first footprint into India with its 4 lakh square foot outlet. IKEA offers trendy furniture and home accessories from kitchenware to dining products.

IKEA Hyderabad will function with a workforce of 950 employees, the largest headcount among its stores world over. But, as the world's sixth largest economy in terms of GDP, India cannot afford to invite foreign businesses at the expense of domestic ones. In a few months into forming the government at the Centre, Prime Minister Narendra Modi launched the Make in India initiative with a vision to making India a global manufacturing hub, by encouraging both multinational as well as domestic companies to manufacture their products within the country.

Experts believe that if the Indian government aspires to ensure that Make in India becomes a success, it has to be the prime incubator of innovation and technology through dedicated Public Sector Undertakings, who in turn could be assisted by startups, tech incubators and domestic venture capitalists.

With India opening doors to IKEA, small-scale furniture makers are the biggest losers of an already grinding market that is being monopolized with e-commerce giants. According to industry insiders, the Indian furniture market will face a tough time with IKEA's entry, which is expected to trigger a price war.

However, IKEA is playing its cards right by offering more than 1,000 products below Rs 200, in line with Indian market sentiments. For instance, a monotone sofa costs just Rs 180, while a chopping board can be purchased for just Rs 100. Also, IKEA houses a 1,000-seater restaurant that serves Indian food from samosa to biryani.

On the flipside, the Sweden-based company already faces a legal challenge in the form of a Public Interest Litigation filed by Congress leader Revanth Reddy, who claims that the Telangana government allotted the land, which was supposed to be offered to IT companies, without inviting tenders. Revanth Reddy alleged that the government suffered a huge loss of Rs 500 crore by giving the land away. The State government has allotted 16.27 acres of prime land for setting up of the store, with an option to buy 3 more acres in subsequent years.

Also Read: IKEA Hyderabad Launch Hits A Roadblock