IKEA in Amazon

So what happens when one of the world’s biggest retailers decides that selling through its own exclusive channels is not enough despite being proven very successful for the last 70 years! IKEA’s website lists more than 12,000 products, almost the entire IKEA range and you will never find such a big range in their world-famous catalogues.

IKEA sold 36.4 billion euros worth of goods in 2016 mostly through their website and their almost 400 stores in 48 countries, leaving 4.2 billion euros in net income! The website is responsible for only 1.4 billion euros of sales, a tiny fraction compared to the total revenue.

Torbjorn Loof, IKEA Group’s Chief Executive through statements on Reuters clearly recognises that the competitive landscape is changing and that the sales from the website are really small.┬áNews reported by Reuters say that IKEA plans to test selling its products on websites other than its own.

It is obvious that Amazon is the eCommerce king and the top-of-mind choice for everyday shopping for million of consumers in the USA, UK and many other big markets. Indeed, when you look into Amazon for IKEA products you can find a few thousand IKEA products sold online! Given these two facts, it just makes sense that IKEA will start testing new eCommerce platforms by working with Amazon.

But for me, that would be a wasted chance. Amazon’s footprint is huge in North America and Europe and so is IKEA’s footprint. It would make much more sense to use eCommerce platforms to expand or grow into markets that IKEA doesn’t have such an influential presence and Asia seems like a great choice! They have a presence in less than 10 countries there and these markets are huge. Also, consumer trends when it comes to online shopping in these countries are way different than what is perceived in Americas and Europe.

That’s why working with local eCommerce platforms and partners would make great sense for IKEA.