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A furniture store jammed Hyderabad
Nothing had crashed and no truck had broken down. The jam came from people heading to the store, and it looked as if the whole city had stopped work to go. Hyderabad police put out traffic advisories, and radio jockeys told listeners to stay away from the area. The store put up a billboard of its own telling the city it was there to stay.
The store was IKEA, a Swedish company and the world's largest furniture seller. It runs about 445 stores worldwide, employs more than 217,000 people, and earns more than $40 billion in revenue. Among the top 10 furniture brands in the world, IKEA sits first, and the runner-up is not even close to $10 billion.
Furniture is not usually considered a scalable business, yet IKEA draws crowds wherever it opens, whatever the city or the country.
Why did IKEA take so long to reach India?
For years, India limited how much foreign companies could own and run in single-brand retail. When the rules loosened in the early 2010s, foreign retailers were required to source a set share of their goods from within India, which meant IKEA had to build local supplier relationships before opening. IKEA announced its India plans in 2012 and opened its first store in Hyderabad in 2018.
Why are IKEA stores so enormous?
A typical IKEA store combines a showroom, a self-serve warehouse, a restaurant, and checkout under one roof. The showroom floor follows a one-way path that leads shoppers past every department before the warehouse. The size comes from showing furniture in full room settings rather than on bare shelves. IKEA stores are commonly built on the outskirts of cities, where large plots of land cost less.
Why does IKEA put a restaurant in every store?
IKEA's founder, Ingvar Kamprad, added a restaurant to the Älmhult, Sweden, showroom because customers often drove long distances to reach it. Company accounts describe the idea as keeping shoppers in the building longer instead of letting them leave hungry. The restaurant became a fixture across IKEA stores worldwide. Food now makes up a noticeable share of the company's retail sales.
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