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by Cheryl Tay
International home products company IKEA Group is aiming to enter the Indian market and plans to open more stores in China, in order to bolster its sales outside of Europe.
CEO Mikael Ohlsson said the company is closely monitoring legislative developments in India, in lieu of a potential entry to the market.
For China, he noted that sales are expected to increase by at least 20 percent this year and the company plans to increase its annual store openings in the country from one to three.
“Cautiously we are adding new markets,” said Ohlsson. “We have big interest in opening in India. When the conditions are ripe in India we can start to prepare for an opening there.”
In January this year, the Indian government lifted its 51 percent restriction on foreign ownership of stores selling a single brand, a move that will benefit companies like IKEA. Foreign companies offering single brands have been slow to enter the country due to rules that require them to acquire at least 30 percent of their materials locally.
“We are following very closely positive movement of legislation in India and trying to understand the consequences,” noted Ohlsson.
He added that the company is also planning to further lower its prices in China after having reduced them by 50 percent over the last decade.
“Over the past years we have dramatically reduced our prices in China,” said Ohlsson. “We will continue that this year and also next year to be more affordable for more people.”
The company said expansion in Asia would allow IKEA to reduce its dependence on the European market, which accounts for 80 percent of its overall revenue. IKEA’s sales have climbed every year since 2011 and increased 6.9 percent to €25.2 billion (S$40.5 billion) in the financial year ended 31 August.
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