IKEA plans fresh investment push as it pivots to smaller stores and digital expansion in India

Swedish home furnishings retailer IKEA is preparing to significantly step up investments in India over the next few years as it enters a new phase of expansion focused on smaller-format stores, deeper city penetration and online growth, according to its India CEO Patrik Antoni.

Speaking at an event in Chennai to mark the launch of IKEA’s online services in Tamil Nadu, Antoni said the company plans to more than double its investments in the country in the coming years. The renewed push will combine traditional large-format outlets with city stores and a network of compact neighbourhood outlets ranging from 2,000 to 5,000 square feet.

IKEA’s India journey began with a ₹10,500-crore foreign direct investment (FDI) proposal approved by the government in 2013 to set up 10 stores and allied infrastructure over a decade. The company had later outlined plans to open another 15 stores as part of its long-term strategy. At present, 100 per cent FDI is allowed in single-brand retail under the automatic route.

Currently, IKEA operates three large-format stores in Hyderabad, Navi Mumbai and Bengaluru, along with two city stores in Worli and New Delhi. The retailer is also investing close to ₹7,000 crore to establish a presence in the National Capital Region, with two upcoming stores planned in Gurugram and Noida.

With these investments, IKEA has nearly utilised the initial FDI commitment. Last year, former India CEO Susanne Pulverer had said the company had exhausted the original ₹10,500-crore investment and was evaluating the next phase of capital deployment to expand volumes and increase local sourcing.

Antoni said the next growth phase will place greater emphasis on profitability alongside expansion. In FY2025, IKEA India’s sales grew 6 per cent to ₹1,860.8 crore, covering the period from September 2024 to August 2025. During the year, the retailer recorded around 110 million customer visits across its physical stores and digital platforms.

The launch of online deliveries across cities in Tamil Nadu is part of IKEA’s broader omni-channel strategy, aimed at improving accessibility in markets where physical stores are yet to open. The company believes smaller stores, combined with digital reach, will allow it to serve customers more efficiently while maintaining capital discipline.

As IKEA recalibrates its India strategy, the retailer is betting on a mix of formats and steady investment to build scale in one of its most important growth markets.

(Source: PTI)