Furniture giant IKEA assembles small town strategy to double B2B business by 2028

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Swedish furniture major IKEA is looking to stylise homes in India's smaller towns, tapping into rising aspirations and changing home furnishing trends, country IKEA business manager Manisha Prabhu told Moneycontrol in an interview, adding that emerging urban towns will be key to drive the next phase of growth.

The retailer is planning to hire region-specific account managers where the company doesn't have a presence, such as Chandigarh, Mohali, Panchkula, Indore, Prayagraj and Ayodhya among others, in order to build local partnerships and expand reach.

"The target is to double B2B business by 2028... The kind of homes that are being bought in these places - whether it's Chandigarh, Mohali, Indore, or Ayodhya - are very aspirational. People don’t have access to IKEA, but they want that same experience and solutions. So, we see strong potential.” Prabhu said. Read More

While IKEA does not intend to set up stores in each of these cities right away, it is placing key account managers in such markets to work closely with builders, architects, and customers, ensuring the brand stays visible and relevant well before a physical store comes up.

The retailer has noted a shift in tier 2 and tier 3 markets since last year, with builders shifting from bare-shell apartments to offer fully furnished, ready-to-move-in homes. Realtors are offering integrated kitchens, wardrobes and storage units as part of standard fittings, catering to rising aspirations among homebuyers who increasingly ‘want to walk in with just a suitcase’, said IKEA’s India manager.

Read More: IKEA aims for 'one click, 30 minutes away' format to explore new India-centric model

“Mumbai may still prefer bare-shell apartments, but in places like Chandigarh and Lucknow, buyers expect fully fitted homes with kitchens, wardrobes, and built-in storage. That’s becoming a new norm," Prabhu added. “Instead of selling one kitchen at a time to ten different customers, I can now partner with a builder and deliver 100 or even 300 kitchens in one go,” Prabhu explained. “That’s a big trend and a big gain for us in tier-1 and tier-2 markets. We may have missed some of this trend last year by not focusing enough on smaller markets, but starting this year, we’re actively pursuing it," she added.

The B2B segment is currently contributing to approximately 19 percent of IKEA’s business in India, and the Swedish retailer is looking to grow this by 20-25 percent on year. While in most markets, IKEA will focus more on residential, it is looking to provide solutions for co-living and student spaces in cities like Bhopal and Indore, the company said.

"People are spending. And they don’t really have organized options. That’s where IKEA can step in, with modular kitchens, wardrobes, furnishing, and full-home solutions," she added.

Driving this move is the growing home sales in India’s tier-2 cities, which touched Rs 40,443 crore in Q1 2025, up 6% in value terms even as volumes slipped by 8%. Lucknow saw the sharpest rise in unit sales at 25%, while Coimbatore led in value growth with a 52% surge, according to real estate data analytics firm PropEquity. The demand is being fuelled by rising preference for organized housing, better infrastructure and expanding job opportunities.

Rising demand in cities such as Lucknow, Faridabad, Guwahati and New Chandigarh is being fuelled by expanding presence of IT services, BFSI, life sciences and consulting firms, which are driving the growth in housing.