Swedish home furnishings giant IKEA is set to accelerate its expansion in India, planning to increase its investment to more than Rs. 20,000 crore (over US$2.20 billion) over the next five years. This move comes as part of the company’s strategy to strengthen both its offline and online presence across the country.

Expansion Plans and Retail Footprint

IKEA currently operates six stores in India, starting with its first outlet in Hyderabad. The company plans to increase this number to around 30 stores in the coming years, while simultaneously enhancing its e-commerce operations in cities like Chennai and Coimbatore, where physical stores are not yet present. Online sales have already contributed over 30% of IKEA India’s revenue, with a target to grow this share to 40%, reflecting changing consumer behaviour.

Sales Growth and Market Strategy

IKEA’s sales in India rose 6% to ₹1,861 crore (US$207 million) in the last financial year. The company aims to quadruple its sales in India and other markets by increasing market penetration, catering to local preferences, and expanding its retail network. In a strategic move, IKEA plans to begin e-business in new regions even before launching physical stores.

Production and Export Initiatives

To support its growing presence, IKEA intends to double local production for the Indian market and export goods worth up to US$930 million annually. While higher tariffs in export markets remain a challenge, IKEA remains optimistic about India’s potential as a key growth market and its role in global operations.

Summary

IKEA plans to boost its investment in India to over US$2.2 billion in five years, expanding its retail network from 6 to 30 stores and enhancing online sales. With digital revenue already contributing 30% of its business, IKEA aims to grow this to 40%, double local production, and export up to US$930 million annually, highlighting India’s growing significance in the company’s global strategy.

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