Ikea Ramps Up Indian Market Presence with Aggressive Store Expansion
Swedish furniture retail giant Ikea is dramatically accelerating its India expansion strategy, planning to open four to five new stores annually in the country. This marks a significant shift from the company's previous pace, having launched only six stores during its first seven years of retail operations in India.
Strategic Shift Fuels Accelerated Growth
According to Patrik Antoni, who assumed the role of India CEO in August, several key strategies have positioned Ikea for this aggressive expansion. The company has broadened its portfolio while customizing products to suit local preferences and nuances. Additionally, Ikea has established a robust logistics network across major Indian cities, enabling them to maintain competitive pricing while becoming more targeted in reaching specific consumer segments.
"Now, we feel that we have a good base to take the leap forward. It's a big change," Antoni stated in a recent interview. The company will employ a mixed approach to store launches, combining both leased properties and owned construction. "The lease model enables faster expansion. We are looking for land to start more projects but nothing has been closed yet," he added.
Focusing on Metropolitan Markets and Omnichannel Strategy
Ikea's initial expansion will concentrate on six major metropolitan areas: Mumbai, Delhi-NCR, Pune, Chennai, Bengaluru, and Hyderabad. This strategic focus is driven by the established logistical infrastructure in these cities. "This is because we have a solid logistical backbone in these cities. Efficiencies in distribution help to keep prices lower," Antoni explained.
While acknowledging the growing importance of e-commerce, which now contributes over 25% of Ikea's revenues in India, the company remains committed to an omnichannel approach. "For us, online and offline go together. If we open a store in an area, online sales of that region grow," Antoni noted, emphasizing the complementary nature of both channels.
Competitive Landscape and Future Outlook
Ikea operates in a competitive Indian home furnishing market that includes established players like Godrej Interio, Reliance Retail's Urban Ladder, and Pepperfry. The market has seen significant consolidation in recent years, with Reliance Retail acquiring Urban Ladder in 2020 and TCC Concept purchasing Pepperfry earlier this year.
Despite the competitive environment, Ikea remains optimistic about India's long-term potential, citing the country's younger demographic profile compared to Western markets and ongoing population expansion in metropolitan areas as people migrate for employment opportunities. The company is also betting on its food offerings to attract working professionals and nuclear families seeking aesthetic living spaces.
Antoni dismissed the industry trend toward ultra-fast deliveries, stating, "In all markets, it's one day delivery most of the time. We will try a bit with shorter windows to see if it gets any traction but people will rarely need a sofa in 10 minutes and I don't think it can be delivered in 10 minutes."
