Swedish furniture giant IKEA is set to make India its priority market as it invites its investment arm, Ingka Investments, to establish a presence in the country. This move demonstrates IKEA’s commitment to expanding its operations in India and aligns with Ingka’s plans to finalize the second phase of expansion in the country this year.
Ingka Investments, with over 20 billion Euros of financial assets under management worldwide, is considering investments that will meet IKEA’s broader retail needs. These investments could include taking stakes in companies operating in sectors such as renewable energy, recycling, real estate, and software. Although Ingka Investments has only invested in one Indian startup, Livspace, for minority equity, it aims to diversify its investments in India.
With this development, Ingka Group will bring all three of its businesses – IKEA Retail, Ingka Centers, and Ingka Investments – to India. Currently, the group operates 482 IKEA stores in 31 countries and has already established small city stores in Mumbai, Hyderabad, Bengaluru, and Navi Mumbai in the first phase of its expansion in India. Additionally, IKEA has started delivering orders in Pune, Surat, and Vadodara. Furthermore, the group plans to invest $900 million in two Ingka Centers, which are shopping malls located around IKEA stores, in Noida and Gurgaon. These centers are expected to become operational within the next two years. The group also sources products from India through approximately 65 partners.
Expanding its store presence, IKEA is considering opening stores in Chennai and Pune, as well as smaller stores in markets like Delhi. This strategic move aims to cater to the growing demand for IKEA products across various Indian cities. Currently, 30 percent of the products available in IKEA’s Indian stores are locally sourced, and the company is exploring the possibility of promoting its exports. IKEA is also looking to develop India as an export hub for wooden furniture, enabling it to diversify its sourcing across the country.
Ingka Investments follows a flexible investment approach, ranging from acquiring minority stakes to outright acquisitions. The investment arm has already made significant investments in IKEA’s retail business, including 200 million euros in 25 companies. Additionally, Ingka Investments has invested 2.5 billion euros in wind turbines across 14 countries and 10 solar power parks in two countries. These investments reflect IKEA’s commitment to sustainability and its goal to transition to renewable energy sources.
In line with its expansion plans, Ingka Investments has recently signed a purchase agreement to acquire prime real estate in Paris, representing an investment of 130 million euros. This investment further strengthens IKEA’s position in the global real estate market. Furthermore, the investment arm has acquired Med4Next, a cloud-based warehouse management system and software company in the supply chain sector. This acquisition highlights IKEA’s focus on optimizing its supply chain operations to enhance efficiency and customer satisfaction.
By bringing Ingka Investments to India and expanding its retail operations, IKEA Group is demonstrating its confidence in the Indian market’s growth potential. With a commitment to sustainability, local sourcing, and exploring export opportunities, IKEA aims to further contribute to India’s economy while offering its affordable and stylish furniture to a broader consumer base. As IKEA continues to invest in India, it is poised to strengthen its position as a leading global furniture retailer while making a positive impact on local communities and the environment.
