Furniture giant IKEA to set up global hub in Bengaluru to drive digital strategy

Furniture giant IKEA to set up global hub in Bengaluru to drive digital strategy
Photo Credit: Reuters
18 Sep, 2020

Swedish furniture brand IKEA, part of the Delft, Netherlands headquartered firm Ingka Group, on Thursday said it will set up a global office in Bengaluru that will manage its business and digital operations, and house a centre of expertise.

The availability of a large talent pool in India helped make the decision to set up the global office, which will operate from the Karle Special Economic Zone in Bengaluru, a statement said.

The Global Business Operations (GBO), the statement said, is a capability and service organisation and a key partner for group functions such as finance, digital, procurement, and people and culture. The Bengaluru centre joins the GBO network in Poznan, Poland; Shanghai, China; and Baltimore, US. 

Additionally, the digital function, co-located with the GBO in Bengaluru, will be a focal point and the centre for digital development, innovation and operation, the statement said. 

The centre of expertise will provide leadership, best practices, research, support and training services, it said.

“India is central to our growth plans and the GBO will help simplify, standardise and modernise customer and business transactions, procurement operations, financial reporting and people operations. We have long-term growth plans and plan to expand over time,” Lalitha Indrakanti, head of Ingka Group GBO, said.

The furniture retailer has been sourcing materials from India for over 35 years as part of its global supply chain. It claims to work with over 60 suppliers, 45,000 direct employees and 400,000 people in the extended supply chain in India, producing for IKEA stores worldwide. 

In 2018, IKEA opened its first India store in Hyderabad, with a second physical store in the country’s financial capital Mumbai under construction. It currently has an online presence in Hyderabad, Mumbai and Pune.

The company also plans to open smaller format city centre stores in India, as part of a new strategy at the firm, and expand its online presence in other Indian cities in the future. It primarily deploys acres of land and hours into creating gigantic retail spaces. IKEA aims to reach about 100 million consumers in India over the next few years through a multichannel approach.

“With a move towards a new digital IKEA, the organisation is excited to explore and connect with the excellent digital competence in India. This will provide the knowledge, capacity and stimulus to drive continuous improvement and innovation to the business and the transformation,” Divya Kumar, CFO, and chief data and analytics officer for group digital at the Ingka Group, said in the statement.