Swedish furniture giant IKEA has announced ambitious expansion plans for India, committing to more than double its investment in the country to over ₹20,000 crores ($2.2 billion) over the next five years. The retailer, which opened its first Indian store in Hyderabad in 2018, is betting big on the Indian market's potential for significant growth.

Financial Performance and Growth Targets

IKEA's India operations have shown steady progress since entering the market. The company's financial performance and ambitious targets are outlined below:

Patrik Antoni, CEO of IKEA India, emphasized the company's confidence in the market, stating that while India is not yet a large IKEA country, the belief in India's potential to become one of their top markets remains very strong.

Digital-First Expansion Strategy

IKEA is pioneering a new approach to market entry by launching online operations before establishing physical stores in new cities. This strategy represents a first for IKEA globally and reflects the changing consumer behavior in India.

Bhavana Jaiswal, country e-commerce integration manager, explained that this approach caters to young consumers who prefer online shopping to avoid traffic congestion in Indian cities.

Production and Export Plans

The Swedish retailer plans to significantly scale up its manufacturing operations in India, doubling production for both domestic stores and exports to €80 crores ($93 crores). This expansion aligns with the broader trend of global brands ramping up export production in India to reduce costs and meet growing domestic demand.

Market Context and Global Trends

IKEA's expansion comes amid a wave of international companies increasing their Indian operations. Consumer brands ranging from shoemaker Asics to carmaker VinFast Auto are stepping up sourcing to meet domestic demand. Despite U.S. President Trump doubling tariffs on imports from India to as much as 50% on some goods last year, Antoni noted that this has not significantly affected IKEA's Indian suppliers, as the brand primarily ships to European and other markets.

The furniture retailer's commitment to India reflects the country's growing importance as both a consumer market and manufacturing hub for global companies seeking to diversify their supply chains and tap into emerging market opportunities.

IKEA India, the Swedish home furnishing giant, has reported a 6% year-on-year sales growth, with its annual revenue reaching ₹1,860.8 crore. The company also improved its EBITDA by 12%, showcasing its strengthening financial position in the Indian market.

Key Performance Highlights

Customer Reach and Channel Performance

IKEA India served approximately 110 million customers across all channels. The company's online sales witnessed a significant surge, growing 34% year-on-year. This growth was supported by the retailer's expansion into North India through e-commerce and the introduction of new-format stores in Delhi and Bengaluru.

Product Performance

Furniture emerged as a major growth driver for IKEA India. Some of the company's iconic products showed remarkable performance:

• BRIMNES Day Bed
• BILLY Bookcase
• PAX Wardrobe

These products experienced triple-digit growth rates, indicating strong consumer demand for IKEA's furniture offerings.

Business Segment Performance

B2B Business

Contributing 19% of total sales, the B2B segment grew by 20% year-on-year, highlighting IKEA's success in the corporate and institutional market.

Food Business

Accounting for just under 10% of the total business, IKEA's food segment continues to be an important part of its overall offering.

Expansion and Future Outlook

IKEA India is actively expanding its physical and digital presence across the country. Recent developments include:

• Leasing retail space in Pune
• Operating flagship stores in Hyderabad, Mumbai, Bengaluru, and Delhi

The company has set an ambitious goal to achieve profitability by fiscal year 2027. This target demonstrates IKEA's confidence in its growth strategy and market position in India.

As IKEA continues to adapt to the Indian market and expand its reach, both online and offline, it appears well-positioned to capitalize on the growing demand for home furnishings in one of the world's largest consumer markets.