Finnish retail chain and global leader in Home furnishing IKEA entered india in 2018 with its first store at Hyderabad in Telangana State. Over the past 4 years, the company has opened large format stores at Bangalore and Navi Mumbai while also delivering online orders in cities such as Mumbai, Pune & Gujarat.
The company reported a Net Sales / Revenue of Rs. 1,076 for the financial year ending Mar. ’22, a 77% growth compared the same period in FY 20-21, which was Rs. 607 Cr. Meanwhile, its Net loss for FY 21-22 was Rs. 902 Cr., up from Rs. 809 Cr. in the previous accounting period. The company’s operating expenses stood at Rs. 1,590 Cr. for FY 21-22.
There was much hope that IKEA will create a small dent in the Rs. 40,000 Cr pa home furnishing and furniture retail market, which has an organised share of less than 10%. Once-upon-a-time market leading retail chain Home Town is currently under deep stress due to parent Future Group’s financial woes and litigations with Amazon. Home Stop, the home furnishing chain from Raheja Group (which also runs Shoppers Stop) had not expanded even before the Covid-19 pandemic hit the world. During the past 2 years, the chain has not grown as aggressively as in the previous decade.
IKEA’s Bangalore store opening had a queue of visitors leading up to a kilometre on its day of opening. A section of the city celebrated the store opening, much to the amusement of the company’s executives. Though its mobile application, IKEA’s Ecommerce business has also been picking pace over the last year. However, the company couldn’t expand much during the past 2 years due to the slowdown in the economy due to a slow economy, thanks to a slowdown due to the pandemic led-lockdown.