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February 18, 2026
Kartikay Kashyap, BrandWagon, Financial Express
18 February 2026
IKEA HAS BEEN around in India for about eight years, with another three years before that spent studying the market. It has developed a range that it deems “locally relevant-like the roti maker, the tava (pan), the belan (rolling pin), and the pressure cooker -which now constitute about 50% of the products it offers in the country. It has shifted its communication strategy to sync with local culture and fit into local spaces and has worked hard to beef up its omnichannel sales model with about 30% of its sales originating online. But profitability has remained elusive for the retailer whose global sales reached approximately €45billion in the 2015 financial year (FY25).
Just for context, the company’s India entity widened its losses by about 29 to 1,325.2 crore in the financial year ending March 31, 2025 (FY25). The revenue also dipped 3 to 1,749.5 crore from 1,809.8 crore in FY25.
So now the brand is taking a leaf out of its China playbook and tweaking its retail formats. Starting last year, it started piloting smaller store sizes ranging from 15,000-20,000 sq ft that are more cost-effective to set up and faster to integrate with its omnichannel model. “The goal is to create a simpler and more efficient shopping experience,” Ingka Group Retail Manager Tolga Oncu had said when the concept was unveiled last August.
Five months on, the furniture retailer is looking to take a step up the ladder – setting up new stores in the 50,000-70,000 sq ft range in the country, which will sit comfortably between its smaller stones (15,000-20,000 sq ft) and big box retail outlets (4 lakh sq ft), Adosh Sharma, country commercial manager at Ikea India told FE recently. Ikea’s broader plan also includes doubling its investments in the country to over 20,000 crore ($2.2 billion) over the next five years and improving local sourcing.
Will all this help the retailer grab a larger share of the highly fragmented furniture and furnishing market in the country? Will the brand achieve profitability in the next two years in keeping with its plans?
Ikea realises copy-pasting its global retail strategy in India is not going to work. That explains its recent moves to tweak store sizes and product design. Over and above the regular 5-M-L strategy, the fourth format the brand is developing comprises no-frills planning and order points, focused on customers who want to design homes or seek complex solutions without distraction.
“Smaller stores, which fulfill purpose-led needs will help them to get closer to their customers,” says Devangshu Dutta, founder & CEO, Third Eyesight.
The furniture and home decor segment has been up against slow purchase cycles in India. Smaller sized stores that are closer to residential arras might help step up the frequency of purchases. “Players are moving towards a higher purchase frequency strategy and smaller stores will help lkea cash in on this opportunity,” says Kushal Bhatnagar, associate partner, Redseer Consultant Strategy. He says quick commerce has helped improve the purchase cycle in the home decor space, and that is something Ikea will likely tap going forwand.
Dutta says Ikea has taken a long-term view on India and the investments in the pipeline is an indication of the opportunity that awaits players.
The brand claims it has served close to 110 million customers in FY25 across channels, and online sales are growing 34% compared to the previous fiscal. While furniture contributed the lion’s share of its revenue, the food business contributed 100% and Ikea for Business (tailored solutions for businesses) another 19% to its topline.
(Published in Financial Express)
