Ikea wants to continue to expand its empire internationally. While the Swedish giant is trying to catch up in digital after having underestimated the growing power of online commerce and second-hand sales, it relies on the contribution of start-ups to reinvent itself in a landscape of distribution undergoing major changes. Latest example with an investment in the Indian start-up Livspace, specializing in interior design. Financial terms of the transaction were not disclosed.
Founded in 2012, Livspace develops a service that aims to simplify interior design. To do this, the Bangalore-based company has put into orbit a platform that connects owners, designers and supply chain players to review ideas to breathe new life into a room or an entire home. , then choose a plan before implementing it.
Ikea is (finally) betting on e-commerce to relaunch
The interest of such a service for Ikea therefore seems obvious, the kit furniture specialist is looking for solutions to become the epicenter of consumer spending on interior design. This concept had caught the eye of the Swedish company, which had started discussions with the Indian company at the end of its $ 70 million funding round with Goldman Sachs and TPG Growth in September 2018.
Although little information has filtered out regarding possible synergies between Livspace and Ikea, it would not be surprising to see the Swedish group’s products offered on Livspace. This visibility would allow Ikea to gain ground in an Indian market known to be difficult for international retail players. Last year, the global furniture giant opened its first store in India, in Hyderabad. The Scandinavian group plans to open at least 25 additional stores in the country. To date, Ikea has 367 stores in 30 countries around the world.
The Swedish giant with 35 billion euros in turnover is looking for growth drivers to relaunch itself after having suffered the full brunt of competition from e-commerce. In search of a second wind, Ikea launched at the end of 2018 a transformation plan which should lead to the elimination of 7,500 jobs worldwide, or around 5% of its workforce. After relying for a long time on stores with imposed routes, Ikea will double its digital efforts to boost growth which has slowed down in recent years. This is essential in order not to be swallowed up by giants of online commerce like Amazon, which continues to threaten the historical players in retail.