Ikea CEO admits company was late to e-commerce
- In an interview with CNBC, Ikea CEO Peter Agnefjäll said that the retailer is late to e-commerce, although it is working on a new website and online supply chain.
- The Swedish big-box chain says it plans to build its e-commerce business fivefold in the next five years to an estimated €5 billion.
- Ikea will also soon break ground on its first store in India, and is shipping for additional locations to build there.
Ikea is an outlier in terms of building an online presence, with the vast majority of its business worldwide still done in big-box stores. For years, the retailer has eschewed digital sales and deliveries, focusing instead on physical stores and its print catalog—often to hilarious effect. But the strategy has slowed the Swedish housewares retailer’s overall growth; while its online sales ballooned 35% in 2014, overall growth was just 0.4%.
Now, Ikea plans to increase e-commerce from about €1 billion per year to at least €5 billion in the next five years to achieve a sustained overall growth rate of 10% per year. Agnefjäll told CNBC that Ikea’s late-adopter status may actually benefit the firm by allowing it to build its presence on smartphones and tablets from the outset. The company wants to double overall sales by 2020.
While the company still realizes about four-fifths of revenues from its native Europe, it is also looking to emerging markets such as Russia and China for growth, and has secured land for its first store in India.