The Numbers: Ikea

Can you guess which company’s catalog has a more significant production distribution than the Bible?

We’ll give you a few hints:

1. They can sell whole houses…
2. They’ve been around for about 80 years.
3. And when you visit their store, you never have to leave hungry….

With nearly 10,000 products in its offering range, the Swedish mega-brand IKEA’s size and scope is massive. And in 2023, they revealed their plan to invest over 2.2 BILLION dollars in new stores and locations around the United States. That’s the most significant push for growth in over four decades, all coming from this European juggernaut!

How will that kind of investment play out? In this wild economic environment, is the timing right for IKEA?

Today, we reveal the secrets behind one of the world’s largest retailers, from their early beginnings to today’s domination of the furniture market. Get “Billy,” Swedish for Comfortable, and settle into all things IKEA…

Welcome to The Numbers, where we explain the hows and whys behind some of the world’s most influential topics and their global impact!

In the Beginning…

Let’s step into a time machine and travel back to 1943 when a young Swedish entrepreneur named Ingvar Kamprad laid the foundation for the mighty Ikea empire. Picture this: a determined Kamprad, armed with a small sum of money from his father as a reward for his good grades, sets out to create a business that would revolutionize how people furnish their homes.

Using his initials, IK, and the first letters of his childhood farm, Elmtaryd, and the nearby village, Agunnaryd, Kamprad coined the name “IKEA.” Little did he know that this seemingly innocent combination would one day represent a global phenomenon.

In the early days, Ikea primarily focused on selling small items like pens, wallets, and picture frames. It was wildly different from the now. Kamprad soon realized that the actual demand lay in affordable furniture.

In 1956, IKEA developed its most groundbreaking innovation. The flat pack box we all know today was created out of necessity by draughtsman Gillis Lundgren when he couldn’t fit a table into the trunk of a car! Genuis struck. By breaking the table into pieces and asking customers to assemble the products, IKEA realized they could easily transport all their products anywhere in the world! This reduced costs and pricing for buyers and changed the outlook for IKEA. Over the next few decades, IKEA would pack all kinds of products into those boxes and grow their line more than 10-fold.

Product Growth – Affordability & Accessibility Are Key!

When simplicity meets functionality – magic is made! So, the team at IKEA quickly tapped into the concept of providing customers with quality craftsmanship and stylish offerings for an affordable price. The practical furnishings were perfect for many budget-conscious consumers, from college students to newlyweds and parents to retirees.

Their Swedish competitors, threatened by the costs and popularity, iced IKEA out of the game with a boycott in the 1950s of all national furniture fairs. This cold shoulder prompted the retailer to look abroad for growth – and they never had to look back! 

And, oh, let’s not forget the impact of their product names! From the Billy Bookcase to the Malm bed, IKEA uniquely named its products, often after Swedish towns, rivers, or even Swedish adjectives! You see, the founder had a bit of a learning disability, and using names instead of numbers helped him keep track of all their offerings. The side benefit was that this creative twist gave the products a touch of charm and personality. If you really deep dive into the names, you’ll notice running themes across categories, like how the outdoor furniture is named after Scandinavian islands!

These days, the brand is a known go-to location for furnishings around the world. However, for a company to reach global recognition, it needs some staying power – and IKEA spent most of the 1960s and beyond fine-tuning its brand!

Setting New Standards

The next few innovations IKEA introduced into the world remain company standards worldwide and have helped them skyrocket their success.

As with the flat pack box, IKEA leaned into the concept that necessity is the mother of invention. With so many products to review, company leaders needed a way to keep customers in the store longer ( to keep them happy and engaged at the same time). And what’s more crowd-pleasing than an affordable snack the whole family can enjoy?

Enter – the Ikea Café! The perfect spot to grab a bite and curb the “hangry” that takes over from planning out purchases! It's an excellent idea for many reasons. 

Using the newest technology in the 60s, the microwave, the company offered a variety of small meals for customers.

And according to Forbes, with data from four years ago, 30% of the store’s visitors come specifically to eat at IKEA. These days a family of four can enjoy a meal while they shop for around $20 – keeping it one of the most affordable dining locations!

Fun Fact: The largest IKEA restaurant in the world is in India, at their Hyderabad location. It has over 1,000 seats!

The next brand standard that IKEA created emerged from a tragedy. In June of 1970, the flagship store Kungens Kurva in Stockholm went up in flames from an electrical fire. Again, out of necessity, the store was rearranged to include the self-service area we’ve all come to expect at our IKEA warehouses!

Global Takeover, Sustainable Growth, and Democratic Design…

In 1973, IKEA opened its doors outside of Sweden, first in Switzerland and then in Germany, before heading into most European countries on the continent and within the UK.

You probably don’t know that Germany is IKEA’s largest market, representing 15.6% of its retail sales! The US, France, the UK, and China all round out the top 5 global markets.

Watching his company blossom over 30 years inspired Ingvar Kamprad to write “The Testament of a Furniture Dealer” in 1976, with nine visionary points for his company’s long-term credibility and growth.

These included descriptions of functional product designs, quality, and cost-consciousness. It included thoughts on the IKEA spirit, responsibility, stewardship, and teamwork. He encouraged future leadership to save costs as a business, which saves costs for their customers. He discouraged wastefulness and encouraged choosing resourceful solutions over frivolous spending.

Ultimately, his message led to a new long-term structure by separating the ownership of the retail operation from the IKEA concept and the IKEA brand — and keeping these separate roles independent, operating under a franchise system.

They developed their vision into Democratic Design, coined in 1993. This is IKEA’s principle for product creation, balancing function, form, quality, sustainability, and affordability.

All products aim to embody these elements. They adjust design, materials, and production to achieve a low price. The approach is integral to IKEA’s culture, values, and operations.

This is partly their commitment to recycling, renewable energy, and sustainable materials sourcing. From investing in rainforest regeneration to offering LED light bulbs to thousands of decisions in between, IKEA’s commitment runs deep.

Now, all this isn’t to say that IKEA has never faced backlash or seen any struggles along the way. So, let’s look at some of their most significant controversies over the years…

Controversial Moments...

One of the most prominent criticisms IKEA faces is its impact on deforestation.

According to research, they are the world’s 3rd largest consumer of wood, right behind Lowes and Home Depot. And for a company that preaches its emphasis on the environment, where it gets its wood matters to its customers.

In 2021, a report indicated that IKEA purchased and used raw materials from an illegal Russian logging enterprise to build children’s furniture, like beds and dollhouses. Environmentalists argued that cutting down trees in these protected Russian forests, already struggling from wildfires, poses a global threat – with impacts as significant as deforestation in the Brazilian Amazon.

According to NBC news reports, “Ikea said the wood was “legally harvested” and denied any wrongdoing. However, it told the protection agency Earthsight in June that it had dropped these companies as suppliers sometime in the spring of 2021, although it did not specify the precise timing. The company cited “practices of concern” and did not elaborate. 

Another big story about IKEA happened 10 years ago, in 2013, during a European horsemeat scandal. IKEA’s meatballs were already under scrutiny for not being “Swedish” at all but a Turkish recipe! Then, the story broke that horsemeat DNA was found in frozen samples of the infamous café offering. As you can imagine, this caused a significant uproar and forced the company to pull millions of meatballs and sausages from stores in 14 countries!

There was the danger of unsecured furniture falling on children. The 70lb Malm chest was recalled in 2016 due to the deaths of 4 children. The company paid the largest settlement for wrongful child death in US history, $46 million.

But regardless of the controversies, the demand for IKEA remains strong, especially now in this budget-conscious climate! Are you finally ready to see just how giant IKEA is – in the Numbers? Let’s get into them…

And Finally – The Numbers - IKEA Worldwide

IKEA is ENORMOUS – and here are the stats to prove it!

• IKEA.com had approximately 2.8 billion visits in 2019
• IKEA brick-and-mortar stores saw 822 million visits worldwide in 2022
• In 2022, IKEA generated EUR 44.6 billion in retail sales.
• They employ 231,000 workers in 464 stores around the world.
• The average IKEA brick-and-mortar is about 300,000 to 400,000 square feet.
• The Billy Bookcase is the most popular product, with 140 million units sold worldwide – selling one every 10 Seconds!
• The Poäng chair sells 1.5 million units a year.
• 2,500 new products annually.
• IKEA sells more than 150 million meatballs in a year.
• More than 60% of IKEA’s production is manufactured in Europe.
• IKEA has sold over two and a half million dowels, 60 million hinges, and 50 million Allen keys.

Some pretty impressive figures from a very impressive furniture manufacturer! As we mentioned at the beginning of this video, IKEA is set to launch a new growth and marketing campaign in the United States in the upcoming years. It’ll be interesting to see if competitors can keep up!

Before we sign off, we’d love to hear from you in the comments section below –What’s your favorite IKEA experience or piece? Is it holding up?

That’s all for today! If you enjoyed this deep dive into IKEA, don’t forget to hit that like button, share it, and subscribe to our channel for more awesome adventures into The Numbers!