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Ikea may entice with malls next to its big stores

Ikea is exploring possibilities of building shopping malls and entertainment facilities next to some of its upcoming standalone stores, or developing multi-storey shopping centres with Ikea as an anchor store, depending on land availability, they said. The company will lease out mall space to other brands and retailers.

, ET Bureau|
Last Updated: Jan 24, 2020, 11.50 AM IST
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NEW DELHI: Ikea, the world’s largest furniture retailer that opened its first India store in Hyderabad in 2018, may now foray into developing shopping malls along with its flagship outlets in the country, two people familiar with the development said.

Ikea is exploring possibilities of building shopping malls and entertainment facilities next to some of its upcoming standalone stores, or developing multi-storey shopping centres with Ikea as an anchor store, depending on land availability, they said. The company will lease out mall space to other brands and retailers.

Ikea’s sister concern Ingka Centres (formerly Ikea Centres) owns 44 such ‘retail parks’ in Europe, China and Russia.

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“Ingka Centres is interested in developing similar retail parks here,” one of the persons said. “This (India) is a market they want to explore as India has a huge potential for retail.”

India’s $792-billion retail market is expected to grow 12-14% over the next three years to more than $1 trillion, according to Care Ratings.

The other person said Ingka Centres would explore possibility of developing its first retail park in Gurgaon where the Swedish furniture and home products retailer purchased a 10-acre land for Rs 842 crore in 2018, in the single-largest property auction for the Haryana Urban Development Authority. Ikea has yet to start construction at the site.

“Ikea’s plan is to develop it into a retail destination with its store as anchor and other retailers and restaurants to give a composite retail experience,” the person said.

Ikea did not respond to questions regarding its possible foray into mall development in India.

“India is a prioritised market and we have ambitious expansion plans,” it said in a statement on Thursday. The company said it targets to reach 100 million consumers with its products in the country “with a combination of big Ikea stores, smaller city centre stores and ecommerce”.

Ikea plans to open 5-6 stores in the National Capital Region in the coming years. It is scouting for a land in Noida and also looking for a second site in Gurgaon, two people familiar with the development said. Ikea is also in talks with Garden Galleria Mall in Noida to open a smaller 50,000 sq ft outlet there, they said.

This year, Ikea plans to roll out its second flagship outlet in Navi Mumbai and will also open two smaller version outlets in Mumbai and that will be followed by outlets in Bengaluru and Delhi NCR in the coming years.

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