The IUP Journal of Marketing Management
Case Study
Evolution of India's Policy on FDI in Single Brand Retailing: IKEA's Response and Its Impact on India

Article Details
Pub. Date : November, 2021
Product Name : The IUP Journal of Marketing Management
Product Type : Article
Product Code : IJMM201121
Author Name : R Harish
Availability : YES
Subject/Domain : Marketing
Download Format : PDF Format
No. of Pages : 18



IKEA's strong and determined entry into the Indian market is a marker of India's success with its Foreign Direct Investment (FDI) policy on single brand retailing. The slow, steady and cautious approach in relaxing the FDI norms eventually led to a take-off point, whereby not only IKEA, but many other multinational retail companies would find it attractive to enter the Indian market. This would in turn bring in multiple benefits to the local economy by way of better back-end infrastructure and modern technology in manufacturing and retailing. This would also boost domestic manufacturing (thus furthering the Make-in-India cause) and create employment as well, apart from triggering several secondary and tertiary benefits.


IKEA is the world's largest furniture company. It designs and sells ready-to-assemble furniture, modular kitchens and kitchenware, bathroom accessories, lighting and other home appliances, bedding, bedspreads, furnishings, etc. It is known for its innovative, modernistic and minimalist designs. IKEA is also known for its stringent operational processes, cost control and affordable prices (Goel and Garg, 2018).

IKEA was founded by the then 17-year old Ingvar Kamprad in 1943. It is a Swedish founded multinational, but officially headquartered in Delft, the Netherlands. IKEA is an acronym which is meant to convey-"Ingvar Kamprad from Elmtaryd, Agunnaryd". Elmtaryd and Agunnaryd are the names of Ingvar Kamprad's farm and his village respectively (Freden, 2020).

As of 2019, there were 433 IKEA stores operating in 52 countries. During the year September 2018 to August 2019, IKEA had a total turnover of €41.3 bn (, 2019). IKEA may be termed as a big box retailer, as its outlets are often very huge, having within them typically over 10,000 varieties of items, with extensive in-situ displays.

A distinctive feature of an IKEA store is its service-scape, whereby shoppers are encouraged to interact with the items and also experience some of the larger items of furniture and accessories, as they would be in an actual room or kitchen. The stores are