IKEA Establishes New Product Development Center in India

IKEA has launched a new product development center in India. This move positions India as a key hub for designing home furnishings for both local and international markets. The company aims to develop affordable products relevant to Indian consumers. This expansion signifies IKEA's commitment to India's full value chain, from retail to manufacturing and now product innovation.

Mumbai: IKEA has set up a new company in India to develop products for both domestic and overseas markets, the fourth such product development unit in the world's biggest furniture and home products retailer's global network after Sweden, China and Vietnam, reflecting India's growing heft as a strategic growth and manufacturing hub.

The newly incorporated product development centre will be part of Inter IKEA Group and will develop home furnishing products for India and global markets on behalf of the group's design and product development arm based in Almhult, Sweden.

"IKEA is no longer looking at India only as a sourcing base, but as a product-development and export hub for the global organisation," Oskar Lindkvist, managing director at IKEA Product Development Centre India, told ET. "Retail is here, supply is here, and now product development is here. The full value chain is represented in India now." The move marks a significant expansion of IKEA's presence in India beyond retail and sourcing. India has been a sourcing market for IKEA for more than four decades and supplies products worth about 400 million annually, most of which are exported. The new company has been tasked with developing 500 products that are affordable and relevant for Indian consumers. Around 150 products have already been launched and another 220 are under development.

New unit to develop home furnishing products for India and global markets

"What we have done in the last two to three years is really commit towards India as a sourcing market for a wider range of IKEA products," said Linn Roslund, managing director, IKEA Services India. "The product development centre is a good addition because it allows us to work with the materials and manufacturing capabilities that exist in region."

Live Events

IKEA, known for its ready-to-assemble products, started sourcing from India in the 1980s. The company works with about 40 suppliers in the country and is looking to expand that network as it increases furniture manufacturing. Executives said products are being designed for India but could also be sold in overseas markets if demand emerges.

"Our goal is to develop a relevant and affordable range for the many people in India and around the world, while building on the country's unique capabilities," said Lindkvist.

Inter IKEA Group said the new company reinforces its long-term commitment to India as both a key market and sourcing region. The centre will help develop products closer to Indian consumers and suppliers while drawing on the country's manufacturing capabilities, local materials and craftsmanship traditions. The initiative is closely linked to Ikea's plans to deepen local sourcing. "Ikea sources 30% of products sold in its Indian stores locally and aims to raise it to 50%," said Roslund. "We are focusing on India for India, but also India globally. India is connected to our global supply chains, and we see significant growth opportunities here."