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May 2, 2013 8:19 pm
Ikea finally won approval to open its flat-pack furniture stores in India, ending the Swedish retailer’s seven-year battle to enter the country.
India’s cabinet committee on economic affairs on Thursday approved the world’s largest furniture retailer’s plan to spend up to €1.5bn to open about 25 stores in the coming decades.
It marks the end of a saga that began in 2006 when Ikea first applied to open stores in the country. The company’s attempts and frustrations have become emblematic of the struggles of foreign retailers to establish themselves in India, where the government had enacted rules to protect its small shopkeepers.
Mikael Ohlsson, Ikea’s chief executive, said: “This is a very positive development. Since many years already, India is an important market for the Ikea Group from a sourcing perspective. We have been active in the country for more than 25 years.”
It typically takes between four and five years from the date of approval for Ikea to open its first store in a market. India is one of the most important markets in the retailer’s global expansion plans, which will see it double the pace of openings in the second half of this decade.
Ikea is not the only Swedish retailer attempting to enter India, with H&M, the purveyor of cheap chic clothing, looking to open 50 stores in a €100m investment, according to the government in New Delhi.
Both Swedish groups make the bulk of their money in Europe where the eurozone crisis has put retailers under pressure.
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