Is IKEA Making Money in India? A Look at Their Furniture Gamble

India was supposed to be IKEA's golden goose. When the Swedish giant opened its first store in Hyderabad in 2018, people camped out overnight. By now, though, you’re probably wondering—did all that hype add up to real profit?

Here’s what makes India so tricky. It’s a country where a huge chunk of people still get their furniture customized by local carpenters. Flat-pack wardrobes and DIY tools? That’s still a tough sell outside the big cities. Plus, IKEA’s prices are higher than what most local brands offer, even with the famous ‘Swedish efficiency’ tacked on.

If you’re curious whether IKEA is actually making a killing here, the short answer is: it’s complicated. Sales are growing. But every new store costs a bomb—about ₹1,000 crore ($120 million) to set up. As of early 2025, they’re still posting losses in India, according to financial reports, but there’s optimism that the numbers will turn as more Indians shift to urban living and nuclear families want easy, ready-to-assemble stuff.

For anyone keeping an eye on India’s booming furniture market, IKEA’s journey has plenty of lessons—and caution signs—worth unpacking.

• How Big is IKEA’s Bet on India?
• The Real Money: Are They Making Profits Yet?
• Tweaks for Indian Homes (and Wallets)
• Obstacles IKEA Can’t Ignore
• Lessons For Local Furniture Makers

How Big is IKEA’s Bet on India?

When it comes to making a splash, IKEA India isn’t dipping its toes—they jumped right in. The company committed over ₹10,500 crore (about $1.3 billion) just to plant its flag in the country. That’s a huge chunk, even for a global player. And it’s not just about one or two stores. IKEA’s long-game plan calls for at least 25 outlets across India by 2030.

The first store in Hyderabad was a whopper—over 400,000 square feet, stocked with more than 7,500 products. It wasn’t a one-and-done either. By early 2025, IKEA had stores in Mumbai, Bengaluru, and Navi Mumbai, plus smaller city-center shops and e-commerce, hoping to reach customers who’d never step into a megastore.

The financial muscle is serious, but so is the patience. According to company reports, each physical store costs around ₹1,000 crore ($120 million) to launch. Add big investments in local sourcing, warehouses, and a growing delivery network, and IKEA’s outlay is massive.

But why such a big risk? The answer’s simple: India has a booming middle class and a giant appetite for home goods. People are moving to cities faster than ever, and they need beds, sofas, and storage that won’t break the bank. IKEA’s betting that with time—and maybe a few tweaks—they’ll win over this crowd.

The bet isn’t just about selling furniture. IKEA sources a lot locally to keep prices competitive and appeal to Indian tastes. They work with over 55 suppliers and thousands of workers to make sure products actually fit how people live here. So it’s more of a marathon than a sprint, but it’s clear IKEA’s bet on India is one of their biggest anywhere. If you’re watching this space as a business owner or just nosy about global retail, this scale is rare to see.

The Real Money: Are They Making Profits Yet?

Everyone keeps asking: is IKEA India actually making money? Their shops are busy, but warehouse crowds don’t always mean big profits—especially when opening a new store in India can cost a fortune.

The latest financial reports say IKEA India’s sales for FY23 went over ₹1,768 crore (that’s almost $210 million). It sounds huge. But here’s the kicker—they still showed a loss of around ₹240 crore. Why? The main reason is their aggressive expansion. Each mega store in cities like Hyderabad, Navi Mumbai, and Bangalore comes with a sky-high price tag: land, construction, local sourcing, and those massive showrooms all add up.

Their country retail manager Susanne Pulverer told the Economic Times:

“We are here for the long haul. We know the Indian market takes patience and investments upfront before you see big returns.”

Here’s a quick look at what the numbers say:

So, while IKEA India is growing fast in revenue, it’s not making money yet. The company says they’re in what they call a “build-up phase.” They’re pouring money into new store locations, warehouses, and even digital shopping platforms. This pushes losses up in the short term, with the hope these bets will pay off as more Indians start choosing branded, ready-to-assemble furniture over the local carpenter route.

If you’re thinking IKEA’s losses make it a flop, slow down. Big retail in India is a long game. Amazon and Walmart-owned Flipkart bled money for years before turning a corner. IKEA hopes its bold investments will unlock profits—just not this year or the next.

Tweaks for Indian Homes (and Wallets)

IKEA’s arrival in India wasn’t just about putting Swedish sofas next to samosas. They quickly realized that if they wanted to compete with local furniture manufacturers, they had to tweak both their products and their price tags.

One of the first lessons: Indian homes often have less space than the typical European house. So, IKEA started designing compact furniture, especially for city apartments. Think foldable chairs, beds with storage underneath, and wardrobes that fit snugly in small bedrooms. In India, if something doesn’t hide the mess, it’s not wanted.

Next, let’s talk food. Surprising, right? The Swedish meatballs took a backseat, and the restaurant menu now has biryani, samosas, and masala dosa combos. Turns out, a lot of Indian shoppers make a day out of visiting IKEA’s huge stores, and having familiar food is a big bonus for families.

Color is another biggie. The Indian market loves bright shades—maroon, turquoise, mustard. IKEA added deeper hues and bolder patterns to their bedding, kitchenware, and even sofas, keeping local taste in mind.

When it comes to pricing, IKEA quickly learned that being affordable in Europe isn’t the same as being affordable in India. So they started working with more local suppliers to cut down import costs. In 2024, nearly 30% of the items in their India stores were sourced within the country, which keeps prices lower and helps them stand out next to small players and other global furniture manufacturers.

One useful tip for buyers: always check for the “Made in India” label at IKEA. Those products usually come with better deals, sometimes undercutting even local brands.

The bottom line—success in India is all about flexibility and listening. IKEA’s learning curve shows that even the world’s biggest names have to adapt if they want to win over Indian wallets and homes.

Obstacles IKEA Can’t Ignore

For IKEA India, selling tables and wardrobes isn't just about opening big stores and hoping customers will come. The Indian market is a maze of expectations, habits, and everyday challenges.

First, there’s the price problem. IKEA may be affordable by global standards, but in India, even their "budget" offerings feel expensive to a lot of buyers. Most local furniture makers can customize a bed or sofa at almost half the price. That makes it tough for IKEA India to win customers in smaller cities and towns.

Next up: delivery and assembly headaches. In Europe or the US, DIY furniture is kind of a weekend ritual. But most Indian buyers want the whole deal—delivery, assembly, and sometimes even a bit of creative problem-solving to fit awkward corners or joint families. Even though IKEA has boosted its assembly service and delivery network, covering every corner of India is a big, slow process.

Then there’s the rentals game. The majority of urban Indians still live in rented homes, and they move often for jobs or family reasons. Big furniture with a "one-size-fits-all" approach isn’t always practical. Buyers lean toward lightweight, cheaper stuff they don’t mind selling, scrapping, or leaving behind. IKEA products are sturdy, but that also means heavy—and pricey to move.

Supply chains spell trouble, too. In India, strict sourcing rules mean that by 2025, IKEA must source at least 30% of what’s on the shelves locally. That sounds good in theory, but getting suppliers to match IKEA’s quality standards takes years. Indian infrastructure—especially for moving heavy stuff—still struggles compared to Europe or China. If a Mumbai monsoon floods the roads, you can expect some serious delivery delays.

• Regulations: India’s government regulations change quickly, and foreign companies must keep up. Policy changes about foreign investment, taxes, and the need to store customer data locally create extra paperwork and can slow growth.
• Competition: Ikea faces not just traditional furniture markets, but also online players like Pepperfry, Urban Ladder, and countless local shops that know their customers’ tastes inside and out.

Here’s a look at some recent numbers:

The losses are shrinking, but IKEA India isn't posting profits yet. For now, their push is a long-term play—and they’ll need to keep tackling these roadblocks if they want a real taste of Indian success.

Lessons For Local Furniture Makers

If you’re in the furniture manufacturers India game, watching IKEA stumble and learn is like a free business masterclass. IKEA’s journey shows that no matter how big you are, India rewrites the playbook. What’s working for them, and what isn’t, tells you a lot about what local brands can do to get ahead.

First, customization still rules across most Indian cities. While IKEA India banks on ready-to-assemble stuff, plenty of buyers want something unique, whether it’s a pooja unit or bed with storage under every inch. Local players can double down here—offer custom sizes, wood, colors, and deliver fast. IKEA can’t compete with your uncle’s carpenter contact just yet.

Next, delivery makes or breaks the deal. People love checking furniture in person and expecting it delivered super quick. IKEA has its own logistics, but they’re still building out those networks. Local manufacturers with a smooth, fast delivery option—especially for big four- and five-foot beds—win trust points.

Look at how people actually shop. IKEA invests a ton into building giant stores but is now experimenting with smaller city-center locations and online options. If you’re nimble, you can target the same crowd by improving your website, offering WhatsApp product catalogs, or teaming up with platforms like Pepperfry and Urban Ladder.

Let’s talk pricing. Here’s a quick comparison from 2024 between IKEA and general Indian furniture market averages:

Rather than racing to the bottom, local brands can offer flexible EMI options, longer warranties, or installation services—things IKEA often charges extra for. Small touches matter.

• Talk up your “Made in India” story—urban customers care more about local brands now than ever. Highlight what makes your products well-suited to local weather, spaces, and lifestyles.
• Pay close attention to feedback, especially requests for smaller sizes or quirky colors you wouldn’t see in a Swedish catalog.
• The DIY trend may not pick up everywhere—so free assembly and after-sales support will always be a big plus for your customers.

The bottom line: IKEA’s playbook gives you clues but not a ready-made solution. Adapt, listen to your buyers, and play to your strengths. There’s no reason local furniture manufacturers can’t hold their ground—and maybe even grow, while IKEA figures things out.