ALMHULT, SWEDEN - IKEA plans to open 25 stores in India, its first venture into the subcontinent. IKEA has 38 stores in the U.S. and 11 in neighboring China, where it will open an additional six by 2015.
IKEA, the world's third largest consumer of wood after Home Depot and Lowe's, would invest $1.9 billion in the venture, according to a release from India's Commerce Secretary Ananda Sharma. The operation will be established in stages, beginning with 600 million Euro, and totalling 1.5 billion Euro, of $1.9 billion U.S. The operation will be a wholly owned subsidiary of IKEA, significant in that the Indian government has required local partnership and owernship in foreign enterprise investments.
Last year IKEA opened its first franchise stores in Bulgaria and Thailand. This year IKEA's franchise unit Inter IKEA Systems B.V. opened its first store in Indonesia, signing a seven-year franchise deal with retailer PT Hero Supermarket to operate IKEA stores in Indonesia.