Ikea Explores Opportunities in India to Enhance Global Presence

At a time when global companies are reassessing their supply chain strategies due to ongoing tariff uncertainties, Swedish furniture giant Ikea is significantly increasing its sourcing efforts in India. The company aims to raise its local sourcing from 30% to 50% by 2030, a move that not only strengthens its operations in India but also opens up opportunities for global sourcing. Christina Niemela Strom, the global head of sustainability for supply at Inter Ikea Group, emphasized the importance of India in Ikea’s long-term supply chain strategy during a recent interview.

Strengthening Local Sourcing

Ikea currently collaborates with around 40 home furnishing suppliers in India and is actively seeking to expand this network. Strom highlighted that the company’s goal to enhance local sourcing is part of a broader strategy to create a resilient supply chain. By increasing local sourcing, Ikea aims to not only support its operations in India but also leverage the country’s manufacturing capabilities for global markets. Strom stated, “Our supply footprint has to be resilient for what happens, and we see that India has to play a big role in that as well.” This commitment reflects Ikea’s long-term vision for its presence in India, which has become one of its top ten global sourcing markets.

Current Sourcing and Future Plans

In 2024, Ikea’s purchases from India are projected to reach approximately 400 million Euros. Since launching its retail operations in India in 2018, the company has focused on sourcing a variety of products, including ready-made goods like curtains, rugs, and bed linen. Strom noted that Ikea is closely monitoring developments related to the US-India Free Trade Agreement, as trade policies can significantly impact sourcing strategies. The company is also considering introducing new product segments in India that could be marketed globally, showcasing the appeal of “Made in India” products.

Pricing Strategy Amid Inflation

Despite facing high commodity inflation in India over recent quarters, Ikea has chosen not to increase product prices in the country. Strom explained that maintaining affordability is crucial, especially during economic slowdowns when consumers may prioritize essential purchases over home furnishings. “Value for money is important to us, and we have rolled back the price hikes we took during Covid,” she added. This strategy aims to ensure that Ikea remains competitive in the Indian market while continuing to expand its product offerings.

Ikea’s Growth in India

Since opening its first store in Hyderabad, Ikea has expanded its presence to over ten cities in India through a combination of offline and online retail channels. Europe remains Ikea’s largest supply region, followed by Asia and the Americas. While a significant portion of Ikea’s products sold in the US is manufactured in various countries, including China, the company is increasingly looking to India as a key player in its global supply chain. As Ikea continues to grow in India, its commitment to local sourcing and affordability will play a vital role in shaping its future operations.

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