IKEA, the world’s largest furniture retailer, is significantly accelerating its investment in India, designating it a “priority market” for long-term growth. Despite global sales dropping to $51.7 billion in FY2025 from $52 billion the previous year, the company’s Indian operations saw a 6% revenue increase and a 10% improvement in EBITDA (excluding fixed costs).
While India’s current revenue contribution is a modest $196 million, IKEA expects its retail operations in the country to become profitable by August 2028.
Key Growth Drivers and Infrastructure
The Swedish retailer plans to expand from its current six locations to approximately 30 outlets within five years. This growth will utilize a “precision-driven penetration” strategy, mixing large-format stores, smaller city stores, and “Lykli” centers—hubs designed for retail, entertainment, and social interaction.
Regional Focus: Expansion is prioritized across six major hubs: Mumbai, Delhi NCR, Bangalore, Hyderabad, Pune, and Chennai.
Retail Experience: Last year, Ikea India recorded nearly 110 million “customer interactions.” Physical stores remain the dominant revenue driver, accounting for 70% of sales, while e-commerce contributes 30%.
Market Projections: While the Indian government projects the domestic furniture market to reach $40.8 billion by 2033, IKEA anticipates a more aggressive growth trajectory for the market, hitting $48 billion by 2030.
Evolution into a Global Export Hub
Aided by the India-EU free trade agreement finalized on January 26, IKEA is transitioning India from a retail destination into a production base. The company currently sources 30% of its raw materials locally and aims to increase that figure to 50% by 2030. CEO Patrik Antoni emphasizes that this “economic alignment” positions India as a vital export hub within IKEA’s global network, reflecting a business strategy built for “the next 100 years”.
