Ikea to amplify sourcing from India to 50% for its global operations

Business Standard

2 days ago

India is a "focus market" for the Swedish global home decor and furniture retailer Ikea, where it is increasing sourcing for its global operations and increasing local sourcing to 50 per cent, from the current 30 per cent, for the domestic retail business, a top company official said.
The move will help to cater local retail and global operations, and will also generate more jobs across the supply chain, said Christina Niemel Strm, Head of Sustainability for Supply, Inter Ikea Group.
India is "in the top 10 of our sourcing countries" list, from where it is procuring products worth around 400 million euros for its global retail operations, Strm told PTI in an interaction.
Ikea's current sourcing basket includes textiles, plastics, and metals, among others, and the company plans to add more items.
"Our aim to source more product categories such as sofas, mattresses and storage furniture from the country now,' said Strm, adding "Inter Ikea Group has identified India as a focus market this year and we aim to increase local sourcing (from 30 per cent to 50 per cent), create products from India to cater to local and global customers and generate more jobs across the supply chain.
Presently, Europe is Ikea's biggest supplier, followed by America and Asia, in which China leads.
Ikea has been sourcing from India for the last five decades, though it started its retail operation in India in 2018 by opening its first store at Hyderabad, followed by Navi Mumbai and Bengaluru and several others such as Delhi NCR, are in the execution pipeline.
"We have had a love affair with India...," she said, adding, "India will remain important for us".
According to Strom, Ikea Group is here "for the long term" and already has "a very big belief" in the country.
"We have suppliers that we have worked with since the start," she said, adding, "we grow together. I think also the growth for Ikea in India is also happening when India is growing and developing." Ikea, which is working with 1.10 lakh farmers here for sustainable sourcing of cotton, helping them with practices such as reducing usage of pesticides, fertiliser and water.
"Well, it means for the farmer also that they actually get higher yields by this. So they get more money in their pockets, and we get a better product. So here sustainability is not driving cost, said Strom, while responding to a query as to whether these sustainable practices increase the cost.
Through its supply business, Ikea has close to 1,00,000 coworkers at direct suppliers in India and around 2,70,000 at tier 2 suppliers.
"Today, more than 1,10,000 farmers have adopted more sustainable farming practices within Ikea projects. The cotton used at Ikea comes from virgin cotton certified by our approved schemes," she said, adding Ikea is committed to halving emissions by 2030 and becoming net-zero by 2050.
Inter Ikea Group is the group of companies that connects Ikea franchisees with range development and suppliers, and aligns the overall Ikea strategic direction. The Group includes Inter Ikea Systems BV the worldwide Ikea franchisor as well as range development, supply and certain industry activities.