IKEA has just brought in the man who was heading its largest market to kickstart its newest one.
Peter Betzel, till recently heading the furniture retailer’s business in Germany, will now take charge of operations in Asia’s third-largest economy, the company said in a statement on March 12. Betzel takes over from Juvencio Maeztu, who helped set up IKEA’s India business and is now moving to a global role as its CFO and deputy CEO.
The new chief started off as a store manager and has spent the last 25 years across IKEA’s key markets. His appointment comes at a time when the company is preparing for its next phase of growth in a market it entered in 2012.
“India is marked as one of IKEA’s most important growth markets and the company has committed large investments in India,” the company said in the statement. While the firm is already present in China, IKEA is now looking to tap India’s booming middle-class. It also helps that India’s Rs635 billion furniture market is hugely unorganised, leaving ample room for growth for large chains that offer value products to consumers here.
The new chief will now oversee the opening of the retailer’s first store in the city of Hyderabad, Telangana in the spring of 2018.
IKEA first announced plans to enter India six years ago, with an initial investment of Rs10,500 crore (around $1.6 billion) to set up 25 stores, making one of the biggest foreign investments in the country’s retail market. Since then, it has spent time negotiating with the government to ease foreign investment rules for retail and acquiring huge land parcels for its stores and supply chain centres.
In the meanwhile, it has acquired land in the cities of Mumbai, Delhi-NCR, and Bengaluru. Plans are underway to buy more land in the cities of Pune, Surat, and Ahmedabad. Last year it even opened an experience centre in Hyderabad to help Indian shoppers warm up to the IKEA experience. It has also announced recent investments of Rs3,000 crore to Rs4,000 crore to set up experience centres and stores in the state of Maharashtra.
With its infrastructure now in place, IKEA is set to flood the market with its simple, DIY furniture. A new chief will help it scale business here.