IKEA's India: Sales Growth Slows, Investments Continue

FDT Bureau

Despite a challenging retail environment and slow growth, IKEA India remains focused on long-term expansion plans, aiming for 25 stores by 2025, reports FURNITURE DESIGN & TECHNOLOGY (FDT) Magazine.

IKEA India has experienced its slowest sales growth since entering the country, with revenue rising by just 5% to INR 1,852 crore in FY24. The slowdown is attributed to the high costs associated with building large-format stores, smaller city outlets, and distribution centers to support long-term growth ambitions.

Despite the challenging retail environment and reduced consumer spending, IKEA remains committed to the Indian market, continuing investments in infrastructure, store expansion, and its omni-channel strategy. In FY24, the company made its offerings more affordable by reducing prices of several products by around 20%, leveraging softening raw material costs.

IKEA is focusing on future growth, planning to open more stores and target 200 million Indian customers by 2025. The company currently operates three large-format stores in Hyderabad, Mumbai, and Bengaluru, with plans to expand with new stores in Gurugram and Noida, aiming for 8-10 stores in the coming years.

India is a key priority for IKEA, with CEO Jesper Brodin emphasizing the promising economic outlook and the country’s potential. The company’s journey in India began in the 1980s with sourcing operations, and it now works with over 60 suppliers, primarily in textiles. As part of its goal to open 25 stores by 2025, IKEA continues to deepen its presence in one of the world’s largest furniture markets.