India, a prominent market for Ikea for future investments: Jesper Brodin, CEO
India holds a prominent place in Ikea's investment strategy, says Jesper Brodin, Global CEO, Ingka Group. expressing admiration for the country's rapid development in both digital and physical infrastructure. He emphasised India's leadership in economic growth and its optimistic outlook.
The furniture giant, sourcing from India since the 1980s, has invested significantly in the country. With approval for a substantial investment proposal, Ikea aims to open 25 stores by 2025. Presently, it operates three large format stores and two smaller city outlets, with plans for expansion in the National Capital Region and online operations in major cities.
India's furniture market, valued at $32 billion, is expected to reach $38 billion by 2026, driven by growing demand from the middle-class segment and infrastructure development.
Brodin sees India as Ikea's primary expansion focus, aligning with the company's vision to cater to diverse needs at affordable prices. By reducing costs and global product prices, Ikea aims to stimulate sales volumes.
Despite being the world's fifth-largest producer and fourth-largest consumer of furniture, India's per-capita furniture consumption remains low, indicating substantial growth potential. While standalone stores and local carpenters dominate the market, ecommerce players like Flipkart and Amazon have entered the fray.
Ikea is collaborating with the Indian government to establish quality standards, ensuring safer and standardized products. This initiative supports India's aspiration to achieve a $2 trillion export target while providing consumers with reliable goods.
As the largest global franchisee of Ikea, Ingka Group accounts for the majority of its sales. Ikea's entry into India has been successful, surpassing local competitors in its first year of operations. In 2023, it recorded substantial sales growth, though net losses widened due to infrastructure investments.
To benefit from economies of scale, Ikea aims to establish 8-10 stores in India. Brodin highlights the importance of reaching major cities to serve India's vast population, reflecting positively on the country's economic prospects.
Thus, Ikea views India as a crucial market for expansion, driven by its economic growth, evolving consumer preferences, and the company's commitment to affordability and quality.
