India’s booming economy and young population give it 30-plus years of growth potential, says IKEA

IKEA India is anticipating significant and sustained growth over the next three decades, buoyed by the country's strong economic trajectory and a large, young, consumption-driven population. The company is entering its second phase of growth in India with an omnichannel strategy that combines large-format stores, smaller city stores, and online sales. Online sales currently contribute about 30% of its revenue in the country. As part of its expansion, IKEA is increasing its local sourcing for Indian retail operations from the current 30% to 50% over the next five years, intending to reach this target by 2030. This will be achieved by working closely with purchasing teams and leveraging the larger volumes from expansion. The company, which has been sourcing from India for five decades, considers the country one of its top 10 sourcing markets, purchasing goods worth approximately € 400 million (US$ 468 million) annually for global operations.
IKEA has recently launched its first physical store in Delhi, a 15,000 sq. ft city store in West Delhi, after a strong online response in the region since the online launch six months ago. The company plans to open similar small-format stores in other cities like Lucknow and Chandigarh. The city store format allows the retailer to operate in shopping malls and high-footfall urban centres, bringing them closer to customers who increasingly desire convenience. CEO Mr. Patrik Antoni noted that combining online and offline experiences is a "success recipe" for increasing total sales. While property rentals in India are higher, he stated that lower operational costs make the business case suitable for the company. With new store formats and an expanded sourcing base, IKEA aims to deepen its reach in what it sees as one of its most promising future markets.

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