Ikea eyes Delhi-NCR expansion with small format store, e-commerce operations

New Delhi: Swedish furniture retailer Ikea will expand its presence in north India in the coming months with a small-format store in Delhi-NCR (National Capital Region). The company also said it would start e-commerce operations in Delhi and neighbouring cities on 1 March.

The initiative is part of Ikea’s broader expansion strategy in India, which includes launching online sales, opening both large-format and smaller retail stores, and entering new markets. In 2021, Ikea’s parent company, Ingka Group, had announced plans to develop two shopping malls, each anchored by an Ikea store—one in Gurgaon and the other in Noida.

On 1 March, Ikea will commence online deliveries to Delhi-NCR, Agra, Prayagraj (Allahabad), Amritsar, Chandigarh, Jaipur, Kanpur, Lucknow, Ludhiana, and Varanasi. To support this growth, the company has launched its 180,000 sq ft central distribution centre in Gurgaon in partnership with logistics firm Rhenus. The centre will enable the retailer’s e-commerce expansion and the upcoming large-format stores in Delhi-NCR.

“We have worked a lot on the logistics setup that can fulfill orders in both Delhi-NCR and the nine prominent cities that we will open online, and we have two big projects that are coming up. We are also looking at other formats for Delhi, so it’s a whole combination of omni-channel retailing,” said Susanne Pulverer, CEO & chief sustainability officer, Ikea India. Delhi is our top priority. We are very excited it is the biggest home finishing market, she said in an interview with Mint in the capital earlier this week.

Over 30% of Ikea sales in India currently come from its online platform.

Internal studies commissioned by the retailer suggest that north India is the largest home furnishings market. With cities such as Delhi, Noida, and Gurgaon experiencing a surge in real estate development, the demand for home furnishings has witnessed a corresponding increase.

The retailer made its India debut in 2018 with the opening of its first big-box retail store in Hyderabad. It currently operates three large format stores along with one small-format store in India.

After establishing its presence in the market over the last eight years, Ikea will unveil plans for its “second” phase of expansion in the country.

“When we came in, we had committed an investment of Rs10,500 crore; with that investment, we are also doing two big projects (Gurgaon and Noida). These are kind of booked and consumed. Now we are looking at a new phase of investment and expansion. We can share more details in the not too far away future,” she added.

Ikea stores aside, Ingka Group is also developing two large, mixed-use shopping centres in Delhi-NCR, each anchored by an Ikea store. The Noida centre is slated to open by 2028 with a planned investment of ₹5,500 crore. A similar centre in Gurgaon is expected to open next year, with the project’s investment previously estimated at €400 million (approximately ₹3,500 crore).

India’s overall market for offline retail is expected to touch $1.6 trillion by 2030. Meanwhile, online retail is expected to touch $325 billion by the end of the decade, as per Deloitte estimates.

Following its retail expansion in Delhi-NCR, Hyderabad, Mumbai, and Bengaluru, the retailer is now targeting markets like Chennai and Pune. “We are already present online in Pune, and are assessing opportunities for further physical expansion,” she stated. “We are also exploring increased physical presence in Bangalore. Timelines for physical stores in Chennai and Pune are yet to be determined,” she said.

Q-commerce demand

Ikea’s expansion in India also coincides with the growing demand for quick deliveries in India, which is challenging established players to shorted their delivery timelines.

“We do look at what is happening in areas like quick commerce; we try to understand consumer expectations and what we need to do to be relevant. This is evolving very fast and it’s very unique to India. While no decision has been concluded, we are looking into it,” she said.

In Delhi-NCR, the company will offer next-day delivery across most stock-keeping units.

In fiscal year 2024, Ikea India reported standalone total revenues of ₹1,852.7 crore, up 5.12% from the year-ago period, according to data sourced from business intelligence platform Tofler. Its loss widened from ₹1,134.3 crore to ₹1,303 crore in the same period.

Commenting on profitability, Pulverer said the company is still in its “investment phase” in India. “We are moving towards the path to profitability; it’s as per our plans,” she said.