How IKEA India plans to double business, triple headcount

IKEA celebrates 80 years globally and five years in India
As IKEA turns 80 and completes five years in India, we take a look at how the Swedish furniture giant is betting big on the Indian market

It’s been 80 years since IKEA was born and five years since the Swedish furniture maker made its India debut, opening the country’s first store in 2018.

And now the global brand best-known for its flatpack space-saving furniture is betting even bigger on the Indian market – with plans to double its business each year, triple headcount, and significantly increase local sourcing.

This comes on the back of the company seeing its growth double in India over the last year, while globally, owner and operator Ingka Group reported a 5.7% increase in retail sales for the financial year 2023 and a 7% increase in store visitation and online sales.

“India offers one of the most opportunity-rich growth markets for IKEA, India CEO Susanne Pulverer said in an interview with CNBC.

Five years of growth in the Indian

Bullish on India, the furniture retail giant has already made significant commitments to the Indian retail market, investing 1,500 crore, opening five stores, and securing 30% local sourcing.

Since setting up its first store location in Hyderabad five years ago, the retailer has expanded its footprint to Mumbai and Bengaluru adding another two big-format flagship stores and two city stores in Mumbai – as well as an online presence.

And it has seen significant success with 180 million visitations over the five years.

With a footfall of three million from August 2022 to August 2023, up from 2.90 million a year before, the Hyderabad store is expected to become the first India Ikea store to become profitable, in 2024, Pulverer told media in August.

Pulverer became IKEA's first female CEO when she took the helm of its India operations in March 2022. She also serves as chief sustainability officer. 

IKEA India now employs 3,000 co-workers including 46% female representation, with the goal to increase employee count to 10,000 in the coming years and 50% gender diversity.

So, what exactly are IKEA’s plans for India, a market notoriously difficult for international retailers to break into?

Leading IKEA's business in India, Susanne Pulverer is the company's first female CEO

Pulverer said the company would be adopting a two-pronged approach by opening both city stores and larger format stores.

“The next big expansion for India is the Delhi market where we are planning to open in an omnichannel way by the end of 2024.”

The company is investing in a big shopping centre in Gurugam, a major satellite city of Delhi, and in Noida, where a shopping centre is also under construction.

As well as kicking off operations in Delhi-NCR by the end of 2024, IKEA is looking at omnichannel formats in new locations, including Pune and Chennai.

More than just retail – from B2B to sourcing

But the retail side is only part of the Ikea growth story in India.

The company is also betting big on its B2B business, delivering solutions to real estate players, educational institutions, and hotels and offices amid growing demand for branded solutions.

This follows exponential growth of its B2B segment over the past four years, with business almost doubling every year and the segment contributing around 15-20% to the company’s overall business in India.

However, the bigger plan for the Indian market is sourcing and manufacturing, something IKEA sees as critical for growth there – as local production would be more affordable and sustainable.

With local sourcing currently sitting at 30%, and involving around 65 suppliers, IKEA plans to take this to more than 50% over the next few years – and step-up local manufacturing too – and is actively engaged with the government and suppliers to increase India’s furniture manufacturing capabilities.

While nearly all IKEA mattresses sold in India are now made in India, Pulverer says there is opportunity for more local production and sourcing and believes the big jump will come “when we get into the wood category”.

Ingvar Kamprad founded IKEA as a small mail-order business 80 years ago

IKEA – 80-year design heritage

This year marks 80 years of innovation and design heritage for the iconic furniture maker, which began life in Sweden in July 2943 as a small mail-order business – with the then 17-year-old founder Ingvar Kamprad delivering orders on his bicycle.

Fast forward 80 years and the brand is now represented in 62 markets with 462 IKEA touchpoints, 700 million physical customer visits, 2.6 billion online visistis, and more than 20 million IKEA app downloads.

Not to mention, more than 230,000 IKEA co-workers.

For the last 80 years, we have had the privilege of being part of the many people’s homes and lives – a role we humbly want to continue to have over the coming 80 years and beyond’’, Jon Abrahamsson Ring, CEO Inter IKEA Group, said in a statement.

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