Unbeatable logistics and rock-bottom costs: this is how the e-commerce giants are cornering the Swedish model.
Once upon a time there was a model Ikea. For young couples, poor in money but with the ambition of a modern design house, it was the right solution. They liked the formula of creating the kitchen on their own or improvising as architects, going to the Swedish maxi shop armed with a floor plan and building, with a small budget, a piece of furniture that reflected the solutions of the great designers of the moment, with clean and essential lines. The Nordic giant had understood that during assembly an emotional bond is created with the object which increases its perceived value.
The decline of Ikea’s profit and the challenge of the online giants
A bit of the approach that the Lego. The phenomenon has even been the subject of studies by a pool of researchers fromHarvard Business Schoolwho analyzed precisely how the consumer is “conquered” by this mechanism. As well as from the food corner, the refreshment corner of the megastores, which is a refined means of staying. Added to this are the low price lists. Before Ikea, furnishing your home required a significant financial commitment and the kitchen, like the living room, often fell on the wedding gift list. And above all, each piece was created to last a lifetime. With Ikea everything turns upside down.
Easy to understand as soon as the Swedes set foot in Italyan uproar breaks out among the furniture makers. Many shops close and some small producers lose out, but also in this respect Ikea has been strategic by trying to include companies in the sector in production. At that point the game was done and could last. But until when? Until the market was overturned by the Chinese e-commerce giants, very fast in deliveries, unbeatable in prices, competitive in their ability to intercept trends. And above all until consumer habits changed.
The numbers of the crisis: declining profit and competition from Amazon and Shein
But before delving into the phenomenon, some numbers. In the last financial year, the profit of Inter Ikeathe company that controls the brand and global supply chain, fell by 26 percent despite a price cutting policy. The increase in the cost of timber, slowed real estate markets and above all the increasingly aggressive competition from Amazon, Temu And Sheincapable of combining vast assortments, rapid deliveries and rock-bottom prices. In particular, as reported by Reutersin the financial statements ended August 31, 2025, global retail sales stood at 44.6 billion eurosdown 1 percent year-on-year, despite a 3 percent increase in volumes. It is the second consecutive year in which the giant has recorded a decline.
Ingka Groupthe leading franchise operating stores in 31 countries, recorded sales of 39 billion eurosthe lowest since 2021. The situation has become difficult especially in United States. After the duties wanted by the administration Trump on furniture and wood, Ikea was forced to suspend its price reduction policy. On the other hand, only 15 percent of the products sold in the US are made locally and the rest, coming from global chains, are subject to the burden of customs tariffs.
Cultural change: why democratic design falters
The democratic design strategy is no longer viable. Indeed, it had a boomerang effect because the increase in logistics and material costs made it difficult to maintain the promise of universal accessibility. We mentioned the change in consumer habits. This is the key step. «With the pandemic, the use of the Internet exploded and with it the discovery of the convenience of receiving purchases directly at home. Extra-urban department stores appeared inconvenient. Furthermore, the large e-commerce platforms have multiplied the offer of products of all kinds. In addition to furnishings, there are also objects which for Ikea are an important part of the turnover, but which the platforms today offer at hyper-competitive prices. And so the game is done”, explains a Panorama Mario Sassiauthoritative expert in large-scale retail trade. «There is a cultural change taking place. Time has become a new luxury and there is no longer the desire to drive 40 minutes, load packages and spend hours assembling. Furthermore, Ikea finds itself fighting against an army of sector specialists who sell almost exclusively online, skipping showroom costs to invest in logistics and social media marketing.”
The Masiefor example, focuses on a contemporary design with bright colors and rounded shapes, perfect for Gen Z who wants a house that looks expensive but isn’t. The Spanish brand Kave Home offers a Mediterranean aesthetic and has very efficient logistics even in Italy. Amazon guarantees ultra-fast deliveries and extremely simple return policies.
World Convenience in the local market it is the number one rival for low-cost solutions and offers “delivery and assembly” for those who don’t want to bother putting the pieces together. Zara Home And H&M Homeinstead, offer design collections curated by famous architects. Also there are those who like Tikamoon has solid wood pieces at competitive prices for those who are tired of chipboard.
Ikea’s new strategy: from small shops to the Lada model
To face this competition, Ikea had to redesign its strategy. After having focused on large peripheral stores for decades, the brand is now experimenting with new smaller formats closer to customers, such as the Lada (“barn” in Swedish) designed for medium-sized cities. «The logic is simple: fewer square meters, more flexibility, greater proximity to customers», explains Sassi.
At the same time, large sales points are being redesigned to function both as showrooms and logistics hubs, integrating with e-commerce which today represents around 28 percent of total sales. The strongest signal comes from China. As reported by BloombergIkea is about to close seven large traditional stores in cities like Shanghai, Guangzhou And Tianjin. A decision that reflects the crisis in the real estate market, the slowdown in consumption and the increasingly aggressive competition from online players.
However, the closures will be offset by the opening, over the next two years, of around ten small-format shops Beijing And Shenzhen. Not only that. Ikea has entered into a partnership with the e-commerce giant JD.comto ensure fast deliveries in seven major Chinese cities.
The future in Italy: Plan and order points and specialized spaces
In Italy, change has led to the inauguration of smaller and more specialized spaces in the last two years. This is the case ofXS Store Of Rome Fiumicinowith a surface area of approximately 9 thousand square meters, and above all of the Plan and order point (Paop)dedicated to the design and purchase of furnishing solutions, located in urban or semi-central areas. Paop a were inaugurated Milan, Latin, Varese, Monza And Lecco.
For Ikea it is a decisive challenge and the result will tell if the Blue boxthe symbolic format of the Swedish house, will remain an icon of the past or just one of the many forms that it has been able to reinvent.
