Fifteen years ago, when IKEA, the Swedish furniture and home decor brand, opened its first branch in Bangna in 2011, its entry was not merely the addition of a new player in Thailand’s furniture retail market but also introduced a distinct furniture shopping experience and home decoration concept.
At that time, IKEA introduced the concept Democratic Design which emphasizes design, functionality, quality, sustainability, combined with the concept of Affordability making products accessible in price. This became a core principle for IKEA, communicating that building a good home doesn’t require starting with expensive items but by selecting products and solutions suited to each individual’s space and budget.
IKEA’s arrival helped broaden Thai consumers’ perspectives on home decoration, moving beyond mere aesthetics or purchasing large furniture pieces to designing spaces suited for living. This includes selecting multifunctional furniture, organizing storage neatly, or refreshing home ambiance with small decorative items within a limited budget.
Amid economic uncertainties and fluctuating consumer purchasing power, IKEA Thailand continues expanding its business, especially in recent years with the introduction of smaller stores to better reach consumers in provincial areas. Currently, there are six branches nationwide: IKEA Bangna, IKEA Bangyai, IKEA Phuket, IKEA Sukhumvit, IKEA Chiang Mai, and the newest, IKEA Khon Kaen.
On the 15th anniversary of IKEA Thailand, Leonie Hoskin, Retail Business Manager for IKEA Thailand and Vietnam, revealed the future growth strategy focusing on developing more flexible store formats alongside expanding online channels and reducing logistics costs, which remain key challenges in the furniture business.
Despite ongoing challenges to Thailand’s economy and consumer purchasing power, IKEA has steadily expanded, particularly by entering provincial markets with smaller store formats.
Leonie Hoskin, Retail Business Manager for IKEA Thailand and Vietnam, explained that historically, IKEA’s business expansion relied on investing in large stores, which involved high costs and long project timelines. Currently, the company does not want to wait solely for readiness to invest in large stores.
IKEA has collaborated with partners in Thailand to develop store formats with lower investment costs that can access new customer areas and gradually grow the business as the market develops. This approach shifted IKEA from relying mainly on large stores to adopting multiple store sizes suited to each area.
Today, IKEA’s large stores are approximately 25,000 square meters or more, medium stores around 12,000 square meters, while the small stores in Chiang Mai and Khon Kaen cover about 800-850 square meters.
Expanding small stores aims not only to increase sales points but also allows IKEA to test markets, study consumer behavior, and assess the potential of each area before further investment. Since many furniture consumers prefer to see and touch products before buying, small stores reduce barriers for provincial customers who find traveling to large stores inconvenient.
Leonie views small stores as starting points for market creation, with plans to expand to medium or large stores as demand grows, such as in Phuket, where IKEA started with a small store but aims to expand to about 10,000-12,000 square meters.
Additionally, IKEA is considering opening about 1-2 new stores or service points within the next 1-2 years, depending on readiness and market conditions. Regarding new large-store projects in Bangkok and surrounding areas, Leonie disclosed that IKEA holds land for future development, possibly including expanded distribution infrastructure, but such projects are likely after 2030.
One of the biggest challenges in IKEA’s expansion is fulfillment costs, especially for delivering large furniture items like wardrobes, bookshelves, and other heavy or damage-prone products during transportation.
Currently, IKEA operates about 5-6 main transport routes or Trunk Lines covering key regions of Thailand, including the North, Northeast, East, and South. The company focuses on developing these networks to distribute products efficiently, since opening new stores depends not only on market demand but also on transportation system readiness.
Another approach IKEA is developing is increasing collection points through partnerships, allowing customers to pick up products near their homes instead of home delivery for every order. This model may reduce delivery costs and enable IKEA to reach customers in areas without stores without needing full store investments, Leonie said.
This reflects that IKEA’s future competition will not be solely about opening the most stores but also about back-end system efficiency to maintain product affordability for consumers.
Beyond expansion strategy, IKEA sees growth opportunities from demand for home living products and solutions. Last year, the company focused on Kitchen, Cooking & Eating products under the "Everyday More Value" campaign, offering accessible kitchen products and solutions.
Remarkably, IKEA Thailand sold over 9,000 METOD kitchen sets, generating approximately 300 million baht in revenue. This success made Thailand rank first in METOD kitchen set sales within the Ikano Group and 24th globally, according to company data.
These figures highlight IKEA’s business opportunities in Thailand beyond single-piece furniture sales, extending to higher-value home space solutions, especially kitchens, which involve design, furniture selection, storage systems, and installation tailored to actual spaces. Planning and design services have become key components supporting consumer purchase decisions.
For the fiscal year 2027, IKEA plans to shift marketing focus to Store & Organise solutions under the campaign "Every Version of You" and the concept "Make Space for What You Love," emphasizing home organization and storage.
This campaign aims to present ways to arrange home spaces suited to different life stages and lifestyles, aligning with the Everyday More Value and Everyday Accessible initiatives, which continuously strive to make products and services more affordable and accessible.
Another major change for IKEA Thailand over the past 15 years is the growth of e-commerce channels. Leonie revealed that when online services launched around 2018-2019, e-commerce accounted for only about 3% of total sales.
Since then, online sales proportions have steadily increased by about 2-3 percent annually, reaching approximately 26% today and peaking at 28-30% at times. Recently, the share slightly declined as consumers began returning to physical stores more.
Leonie noted that online market competition is intense, especially regarding pricing and delivery costs. Furniture differs from typical online goods because large items like wardrobes or bookshelves have significantly higher shipping costs and risks of damage during transport.
For IKEA, which positions itself on offering accessible pricing, controlling these costs is crucial. If operating costs rise and are passed to product prices, competitiveness may be affected.
Leonie also observed that some online platform operators may accept losses to subsidize delivery costs, but IKEA avoids this approach, aiming to sustain long-term business health. IKEA’s e-commerce development proceeds alongside enhancing delivery efficiency, cost management, and customer experience.
In the future, customers may increasingly research and purchase online, but physically seeing and touching products remains vital for furniture buying decisions. IKEA’s strategy is not choosing between online and offline but developing both to work together—stores provide experiential spaces while online channels assist.
Leonie said one of the most important lessons IKEA learned in Thailand over 15 years is understanding how Thai consumers live at home.
IKEA emphasizes Home Visits—studying consumers’ lifestyles and space usage inside their homes to grasp real needs and use that data to tailor product and solution presentations suited for the Thai market.
Over the years, IKEA has had successes and mistakes to learn from, such as store size choices or business model formats. Some strategies suited past markets but required adaptation as consumer behavior changed. The key lesson is not clinging to old models but continuously learning and adapting.
For IKEA, the 15th anniversary marks just the beginning of a long journey. The company reaffirms its commitment to grow alongside Thai consumers, not as a short-term trend brand but as a business aiming to build sustainable consumer relationships.
Therefore, IKEA’s main challenge in the next 15 years may not be opening the most stores but creating a business model that reaches more consumers while maintaining price competitiveness amid rising costs and evolving shopping behaviors.
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