Ikea clinched the title of the largest Furniture retailer in the world in 2008 Ikea is also called blue box it now has 472 stores worldwide and a presence in 64 countries across five continents including the oil economies of the UAE Kuwait and Saudi Arabia in 2023 Ikea's total revenue was 51 billion USD nearly 73% of its stores are located in two regions Europe and America with Europe alone housing 277 blue boxes out of a total of 472 worldwide so the majority of the revenue came from Europe and America the market in India is growing faster with per capita consumption of products increasing so Ikea expanded its business in India in 2018 Google committed to investing 10 billion in India to get it was the world's fastest growing major economy India bonds will be this year going into the emerging market index right that should be also a catalyst for more interest but why is Ikea still struggling to crack the code in the Indian market and why is India not an easy Market to crack for Outsiders Ikea first applied for permission to set up shop in India in 2006 but gave up 3 years later after New Delhi refused to relax rules for foreign retailers it reapplied in 2012 after the Indian government finally agreed to allow full foreign ownership of single brand retail businesses and also relax the requirement that 30% of local sourcing be only from local businesses the furniture market demand in India is increasing rapidly the demand was $6.2 billion in 2019 and is increasing exponentially to $24.4 billion by 2035 the biggest challenge in this industry is local unbranded players 90% of the total Furniture Market is dominated by unbranded local players and only 10% are branded players in India why DIY when cheap labor is available Ikea revolutionized Furniture buying in the west with its wide range of ready to assemble products at affordable prices but many Indians would be forgiven for wondering why they had to do it themselves India's abundant supply of cheap labor means it is not known for its DIY in India you can hire a carpenter for less than $110 for a 10-hour carpentry job to satisfy the Indian pensan for ready-made Furniture Ikea has set up a 150 member task force to help customers assemble furniture and is also partnering with Urban clap an app that connects people with a variety of service providers including Carpenters Urban clap charges customers about $364 for a 30-minute carpentry job in comparison task grabbit the services platform acquired by Ikea in 2017 charges us Shoppers a minimum of $36 for any installation job unfair Trade Practices of the tax system local furniture makers are going to be difficult for Ikea in India there are many local furniture shop owners who sell their products without adding GST for example if one product cost $110 then Ikea has to add GST which is a tax in India of 18% and the total cost of the product that the customer has to pay is $11.80 from the local furniture shop you will get the same product for $110 because local players save taxes by not providing bills to overcome this the Ikea master plan is to reduce their imports from China Poland and Italy and take products from local manufacturers in India that helps reduce the cost of import Duty group chief executive of Ikea Jesper Broden said India will become one of Ikea's biggest sourcing markets in the future outside City store IKEA is spending $1.5 billion in India but they have already spent close to $750 million procuring Indian sites for four stores finding the big store in the city is very expensive and challenging so the Ikea store is outside the city people in India don't prefer to drive a car for miles to buy only one piece of furniture like in America they prefer to shop in the local area to save time in the financial year 2021 its operating expenses jumped to 132 million us as a result Ikea's net loss expanded to $ 100 million in the financial year 2021 Ikea has said it is considering opening small stores which will just give a sample of what they sell they will contain screen where people can flick through catalogs before ordering that will help Ikea reduce its big store operating expenses and reduce its net loss online and local competitions Ikea is not the only multinational seeking a large share of India's growing HomeGoods Market us retail giant Walmart is betting big on the rise of India's middle class 2 the world's largest retailer recently agreed to buy a majority stake in Indian online e-commerce platform flip cart which sells a wide range of Home Furnishings ikeo will have to contend with popular Indian online furniture retailers pepper fry and urban ladder in a fragmented and competitive market which also includes a smattering of HomeGoods options on Amazon's Local website the character of the Indian consumer is hard to understand and serve there's competition lurking everywhere but some multibrands have found their way to catch the Indian market but Ikea is still struggling to crack the code in the Indian market