Jesper Brodin, worldwide CEO of Ingka Group, underlined India’s importance due to its size, noting that Ikea’s worldwide strategy is consistent with the features of the Indian market, striving to serve a huge population with significant demands at accessible rates.

According to Jesper Brodin, Global CEO of Ikea’s franchisee holding firm Ingka Group, India is a “top one, two, and three market” for investment in the furniture store.

In an interview with The Economic Times, Brodin acknowledged that India is a “challenging market,” stating that it is difficult to keep up with the country’s rapid expansion of digital and physical infrastructure.

“It has been fascinating to observe the rate of progress during the previous five to ten years. India has progressed from a country catching up to one that is a leader in many elements of digital and, more importantly, economic advancement,” Brodin stated.

Ingka, Ikea’s largest global franchisee, accounts for over 90 percent of its total sales. Inter Ikea, a distinct corporation that manufactures all Ikea products, owns the brand.

India’s Furniture Market Prospects

Brodin, who previously worked as an assistant to Ikea founder Ingvar Kamprad, believes India is the key priority for the company’s expansion.

He emphasized India’s importance owing to its size, stating that Ikea’s worldwide mission is consistent with the features of the Indian market, striving to serve a huge population with significant requirements at affordable rates.

“In terms of investment priorities, India ranks first, second, and third.” We made the strategic decision that we couldn’t afford to be in the startup phase in too many areas. However, for now, India is our number one priority. With all of these people who have narrow wallets, numerous wants, and large family circumstances, India is the ideal market for us. So, I believe that succeeding in India is the most interesting expansion initiative that we have,” he stated.

In terms of pricing, Ikea has carefully decreased expenses in response to a softening of raw material prices, resulting in a price cut of roughly 20% on various products in India and globally. This reduction is projected to result in better sales volume.

Ikea significantly surpassed local competitors such as Urban Ladder and Pepperfry in its first year of operation with a single location – its initial store in Hyderabad in 2018. In 2023, the company reported sales of ₹1,768 crore, representing a 61% rise from the previous year.

The company experienced a net loss of about ₹1,134 crore due to investments in new infrastructure, including as land purchase and distribution centers for planned stores.

Expansion Plans and Market Prioritization

Brodin stated that he was “deeply impressed” with India’s economic progress and growth leadership. “…if you compare to any of the big countries out there, it’s (India’s) outlook is quite optimistic,” he said.

Ikea has already opened three big format stores and two smaller city stores, with larger locations planned for Gurgaon and Noida in the National Capital Region. In addition to physical expansion, the company has expanded its e-commerce offerings into Maharashtra, Karnataka, Telangana, Andhra Pradesh, and Gujarat. Furthermore, the Swedish company plans to launch online operations in Delhi later this year.

The company stated that efforts are underway to strengthen its presence in the Indian market, emphasizing the necessity for at least 8-10 locations to realize economies of scale.

“The sooner we can accomplish that, the better. The first chapter focused on sourcing and foundation, followed by getting the first door up and operating. The goal is to get the company into the top big cities. We’re measuring and planning how to do it for 1.4 billion people. And if I am certain of anything, it is that India’s economic prognosis is positive,” Brodin remarked.

According to IDBI Capital, the home furniture market is currently valued at $32 billion and is expected to increase to $38 billion by 2026, owing primarily to a growing middle class.