IKEA’s India Playbook

Good Morning. When we think of IKEA, we usually consider it as a new entry into India's home retail space. But did you know that an IKEA franchise has had an office in India for decades and exports worth millions? Now that the brand is setting up retail stores, it not only has that base present, but also plans to expand. Adosh Sharma, country commercial manager of IKEA India, spoke to The Core about its expansion plans and much more.

In other news, aviation ministry says Air India crash report "unbiased" amid scrutiny. Meanwhile, America's trading firm Jane Street might be back in business in India.

CORE CONVERSATION

India Will Lead Small Store Revolution, Says IKEA India’s Adosh Sharma

Global furniture brand IKEA knows more about how you live and spend than you think. Ingvar Kamprad founded IKEA in 1943 at the age of 17, selling goods like pens and wallets.

In 1948, he began selling furniture, which led to the creation of the IKEA range as we know it.

In the early 1960s, Ikea had a restaurant kitchen because  Ingvar observed that people left the store at lunchtime to eat outside, which interrupted the whole buying process.

He realised that hungry customers buy less.

Hence, the restaurants you see when you visit Ikea with their curated menus, including in India.

IKEA opened its first Indian store in Hyderabad in 2018 with a 400,000 sq. ft outlet, an effort which at the time was more than a decade in the making.

It is now expanding across India, having covered Mumbai and Bengaluru as well.

It currently has five stores in the country. “But we want to rapidly expand into the six markets that we have identified in the country, and over the next five years, you'll see a lot more stores coming up, small, medium, and large,”  Adosh Sharma, country commercial manager of IKEA India, told The Core. 

IKEA’s Insights

While there have been a few missteps here and there, the thrust is an interesting blend of offline and online. This is interesting as the DIY culture is still evolving in India.

Like all retailers, IKEA's success in India will depend on its understanding of the Indian consumer and, more importantly, the ability to predict behaviour and future needs.

Something the company is spending considerable energy in doing, as the insights reveal.

“There is the basic model of IKEA comes from global, from our genesis, from our old pedigree. But then from there on, we tend to understand how do customers live in that particular market,” said Sharma. 

In India, it will be smaller stores. Sharma said and added, “In India, the number of smaller stores we do will also be quite substantial”

In this week’s The Core Report’s Weekend Edition, Sharma also spoke about what their research was telling them and also India's growing role as a sourcing nation for its 486 global stores. 

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CORE NUMBER

Rs 96,000 crore

That’s how much the Adani Group plans to invest over five years in its airports, splitting the funds into Rs 60,000 crore for aviation infrastructure and Rs 36,000 crore for real estate development, said Jeet Adani, the group's airport head, in an interview with The Times of India. 

By the Numbers: He added that the Navi Mumbai International Airport (NMIA), which is over 90% complete, will open around September  30, 2025.

It will start with 60 flights a day, and scale to 300, within six months. At first, the airport will handle 2 crore passengers annually.

The Shift: Jeet Adani also said that Mumbai’s Chhatrapati Shivaji T1 will be demolished and completely rebuilt by 2032.

FROM THE PERIPHERY

Minister Defends Crash Probe. Civil Aviation Minister K. Rammohan Naidu told Parliament that the Aircraft Accident Investigation Bureau (AAIB) is “totally unbiased” in probing the June 12 Air India crash that killed 260 people. He added that only the final report will reveal the exact cause.

Backdrop: His remarks come after the AAIB’s preliminary findings showed both engine fuel switches were manually turned off seconds after takeoff, with no mechanical issues detected. A pilot was heard on the cockpit voice recorder asking why the switches had been cut.

Implications: With lawmakers demanding answers, the pressure is rising on authorities to ensure transparency and accountability.

Tech Giants Skip ED Summons. Meta and Google skipped Enforcement Directorate (ED) summons on July 21 in connection with a money laundering probe into ads for illegal betting platforms. They’ve been asked to appear again on July 28, according to a Press Trust of India report.

Backdrop: The ED is probing how such platforms were allowed to advertise on social media and app stores. Both companies reportedly sought more time to gather documentation.

Implications: Executives will be questioned under the Prevention of Money Laundering Act. Celebrities and sportspersons may also be summoned as part of the broader investigation.

Jane Street Returns. Two sources told Reuters that Jane Street has resumed trading in India. But, Jane Street won’t be trading options; instead, it’ll stick to cash markets, per the second source. 

How We Got Here: In early July, markets regulator the Securities and Exchange Board (SEBI) of India released a 105-page report accusing American trading firm Jane Street of manipulating India’s options markets. SEBI asked the company to deposit Rs 4,853 crore in an escrow account. Jane Street did so, but also informed its employees via email that it will fight SEBI’s accusations. 

Flashpoint: Previously, SEBI has released studies saying 9 out of 10 retail traders lose money in options. That’s in part because of big players like Jane Street – The Core has covered this too. SEBI is also trying to make options less risky, by increasing the length of contracts, among other things.

Core Output Rebounds. India's infrastructure output, which is the index of eight core industries, had a 1.7% year-on-year increase in June, a three-month high.

Context: These eight sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — that the index tracks make up for 40% of India's industrial production. This marks a recovery from May’s weaker performance. In May, this growth rate was at 1.2%. said the government's revised number for the month. This was the slowest in nine months.

By The Numbers: Coal production declined by 6.8% year-on-year in June; crude oil production 1.2%, natural gas 2.8%, fertilisers 1.2% and electricity generation 2.8%. Petroleum refinery production increased by 3.4% year-on-year, steel 9.3% and cement 9.2%.

PODCAST

On Episode 629 of The Core Report, financial journalist Govindraj Ethiraj talks to Priyanka Kishore, Director and Principal Economist at Asia Decoded.

• Markets dip further as Q1 results start rolling in

• Trump tariff range from 50% to 500%, labour intensive countries most hit

• Inflation could fall further to 2.5%

• The delay in releasing information on the Air India Ahmedabad crash has serious consequences

• Heat waves in Europe have killed over 2,300 people in last week's estimates

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas