An IKEA sign at the construction site in Hyderabad.

LUCKNOW: After opening its first store in the country in Hyderabad, international furniture and home accessories company IKEA has set its sights on Uttar Pradesh . Scouting for land for a store in Noida, the company has informed the government that it is proposing to invest more than Rs 5,000 crore in the state in the coming years through retail outlets and e-commerce.

IKEA had signed an MoU with the Samajwadi Party government in 2015 to set up a store each in Lucknow, Agra and Noida with an investment of approximately Rs 500 crore in each. Sources in IKEA said that since entering the market, their plans had been evolving according to the market situation and at present, the company was focussing on setting up an outlet in Noida only.

IKEA India CEO Peter Betzel said that the company was in dialogue with the UP government to facilitate its entry into the state. "Our proposed investment is more than Rs 5,000 crore in the state over the coming years. There will be employment for more than 4,000 co-workers directly and 4,000 jobs indirectly," he said.

Betzel added that the company was looking to set up a mix of large and small city centre format stores across the state, which would be accompanied by an e-commerce platform in the coming months.

"The immediate plan is to set up a large format IKEA store in Noida where we are scouting for suitable land. The store will have an estimated investment of Rs 1,000 crore. It will employ around 1,000 co-workers directly and another 1,000 indirectly across the value chain," Betzel said.

A typical IKEA store is an average 400,000 sq ft in size. With such a large space difficult to come by within a city, the company is looking to change its model and develop smaller stores, either standalone or within malls. Sources say that by 2030, the company hopes to have a presence in at least 49 Indian cities.

Describing its long-term intent for UP, IKEA officials say that the company is looking to develop retail and commercial parks that will comprise shopping centres, offices and integrated commercial projects which could be owned either by IKEA's holding company or independent developers.

