Vasco Santos, Global Sales & Leasing Director, Ingka Centres, on India as a potential market for the Swedish retail conglomerate, building spaces that foster communities and India’s demanding customers
Ingka Group, the parent company of the renowned global furniture brand IKEA, is investing Rs 7,500 crore to develop two Ingka Centres in the National Capital Region (NCR). The retail-led mixed-use projects would be home to an IKEA store in addition to dozens of other Indian and global brands.
The first Ingka Centre—branded in India as Lykli—is scheduled to open in Gurugram in 2025 and it will be followed by another one in Noida. Ingka Centres has announced PVR as the multiplex operator and Le Marche will run a supermarket in the Gurugram mall.
Vasco Santos, Global Sales & Leasing Director, Ingka Centres, talks to IndiaRetailing about India as a potential market for the Swedish retail conglomerate, building spaces that foster communities, India’s demanding customers and more. Exited excerpts:
How important is India as a market for Ingka Centres?
We are extremely excited about coming to India. It is a big market, that is considered in the group as a priority market. We are starting with two Ingka Centres that we call meeting places. In Gurugram, the construction is now visible if you pass by the road. Also, we have started in Noida, but it is a project that will come a bit later.
We are a country that is still hungry for shopping centres. How many malls or meeting places can you build in India over the years?
That is a difficult question to answer. We do not have this goal to build X number of centres. Right now, we are focusing on delivering shopping malls or meeting places that can make a difference in the Indian retail landscape. It does not mean that we can do it better than others. In India, you have amazing developers and companies that do very good work on operating with a fantastic tenant mix.
So, we are not here to teach anything to Indian developers… we have our concept of meeting places anchored by an IKEA store. Retail is the core, but there is much more than that. The two projects we are doing now are mixed-use. Gurugram, for example, will have about 3 lakh sq. ft. of office spaces on top of the retail area and connected to the Food & Beverages (F&B) and leisure area.
So, we are starting with these two projects we are very excited about. We are focused on delivering amazing results that people can see as bringing something new.
Then, hopefully, we will have other opportunities in the market. But at this stage, I am not able to say how many it will be.
You brand Ingka Centres distinctly in different countries. In India, you are calling them Lykli.
Yeah, we are calling them Lykli which means happiness in Swedish. The name embodies our ambition to deliver a place for the community to bring total enjoyment and happiness because it is about creating memorable moments and fantastic experiences. That is why, besides retail, we bring a lot of other components. Besides F&B, we focus on leisure and entertainment—components that are based on experience, not transactions. We believe that the way to transform shopping centres into something else is to provide spaces, common spaces that can make consumers feel a sense of belonging to the location.
What challenges do you see in developing Ingka Centers here, compared to other Asian countries?
In Asia, we are quite big in China. And now India. We are in Europe and the US. And each country offers its specific challenge. So, I do not think that India is more difficult than other countries to do such projects.
Are real estate prices and construction costs expensive here compared to other countries?
Compared to some countries it might be a bit more costly, compared to others it may be less. But that is part of the game. When you come to a market, you know what you must deal with. You just try to build something that will offer value to the end customer, and by offering value to the end customer, you can absorb those costs in certain ways.
You have been aggressive in China, where you have built 10 Ingka Centres in the last 10 years. Are you bringing any learnings from China to India?
Absolutely. I mean, not only from China but from all over the world. Similarly, we applied learnings from other locations in China as well. We opened a big mall in the Xi’an district of China earlier this year. It is about 1,25,000 square meters in leasable area. The opening was amazing as we received one million visitors in just four days. There we have an amazing lineup of retail brands. But more than that, even before the opening of the mall, we built a strong sense of community with the city. That’s why people were so eager to come. They feel like this is the place that has been built for them. Of course, we have taken local traditions into consideration. We take the best of that community, of that city. We emphasize what that community loves and what it cherishes. And then we also bring our vision in terms of the quality of the spaces, and components of leisure and entertainment. We have spaces where parents can leave the kids and go shopping and kids can have fun in the high-quality spaces.
I think that the secret sauce is exactly understanding the people and understanding their needs and accordingly adjusting to them.
What is your understanding of the Indian consumer? What do they need?
I think the Indian consumer is very demanding. They want services, not just products and that is great. That reveals a certain maturity. From some surveys and research, we have seen that they do not just want to buy stuff and it is not just about retail. According to a survey, 60% of Indians want to dedicate more time and money to leisure, entertainment, and cultural activities. So, they are becoming more demanding in how they will spend their money and how they will spend their time. That is the reason we are creating a destination, not just a mall.
What is the ideal mall size for India? Can you also build a 1.3 million sq. ft. mall here like you did in China?
Our Gurugram project is about a bit less than 90,000 square metres, which is almost a million sq. ft. and already a good size.
And what is the composition—the percentage of retail compared to other components?
About 60,000 square metres is retail with 30,000 square meters of offices on top of that.
You have already signed PVR as the cinema operator and Le Marche as the supermarket.
They have been announced. We are happy to partner with such reference partners and companies in India. They do amazing work. When it comes to cinemas, India is a reference for the whole world. Not only PVR, but there are also many other operators that do a great job.
We will unveil other partners soon. We aim to have a wide range of international partners, but also local partners.
Will your global partners also come to Ingka Centres in India?
Absolutely. Most of them eventually, if they are already present in the market will likely join the project.
Which are the cities where you could go, apart from Delhi NCR?
Bengaluru, Hyderabad, all those cities are important.
Which are the other priority countries for you?
We have done a lot of acquisitions in the past couple of years in Europe. Last year, we bought one of the largest and most dominant inner-city shopping centres in Paris. We have been doing acquisitions in China. We opened in September, the largest project we have ever built in Shanghai.
Vasco Santos is the Global Leasing Director at Ingka Centres, part of Ingka Group, which also includes IKEA Retail. Santos holds 28 years of experience in retail and real estate sectors, having worked for a decade for European retailers like Decathlon, Intersport, and Parfois. He joined the Ingka Group in 2006, where he has been performing different roles within asset management and leasing. Since December 2018, he has led the global leasing department, with teams spreading from Shanghai to San Francisco.
