IKEA's Online Business Is Expanding

IKEA, Sweden’s world-famous furniture and home accessories brand, has recently published their financial results for fiscal 2020. As for so many other retailers, the year has been turbulent. After the corona pandemic had hit hard on the stationary store business, the Inter IKEA Group finally concluded the 12 months ended August 31, 2020 with a total retail sales amount of €39.6 billion, which is slightly below the 2019 result of €41.3 billion. Given that 75% of IKEA stores worldwide were closed for several weeks during corona lockdowns according to company information, the result is still soothing. eCommerce played a key role in this respect. IKEA had registered around 4 billion website visits by August 31 and a plus in eCommerce sales of 45%. Online sales finally made up over 16% of total retail sales in fiscal 2020, which is a rise of 6 percentage points compared to 2019. Even as stores re-opened in the course of summer, online demand remained strong. At the same time, brick-and-mortar shoppers changed their purchasing behavior after the lockdowns and came to the stores to make targeted purchases rather than browsing through the offer and buying spontaneously. This raised conversions and average spending amounts.

IKEA runs several online stores worldwide. The top 5 URLs generated total eCommerce net sales of more than €3.9 billion in 2019:

ikea.com is IKEA’s best-performing online store. The number one URL generated net sales of €3,725 million in 2019. The biggest net sales shares of ikea.com are generated in the United States and Germany, which accounted for 16% and 13% of 2019 net sales, respectively. IKEA’s best-selling online store registered a year-on-year net sales growth of 42% in 2019. The Chinese equivalent, ikea.cn, is relatively new to the portfolio. The online store was launched in 2018, but it jumped to second place in the IKEA URL net sales ranking in just one year, yet with a huge distance to leading ikea.com: ikea.cn generated net sales of €117 million in 2019. The Turkish, Greek, and Spanish URLs are in ranks 3 to 5 with 2019 net sales between €11 million and €41 million, but with very high year-on-year growth rates of 49% and more. But even though growth rates of the underdogs are high, IKEA’s .com URL seems unreachable, with more than 30 times as high a net sales amount as the top 2 store.