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A Look Into the Founding Story of IKEA - From Rags to Riches

Updated: Mar 18, 2023


IKEA is a household name today, but it wasn't always the global furniture giant that it is today. The history of IKEA dates back to the early twentieth century, when Ingvar Kamprad, the founder of IKEA, was born into a family of Swedish farmers. With only a few years of formal education, Kamprad had a head start in the business world when he inherited his father's farm at the age of 17. He started selling everyday items like pens, wallets, and picture frames at local markets and eventually expanded his business to include furniture. From there, IKEA was born. Through a combination of hard work, determination, and an eye for innovative design, Kamprad forged a path of success and created a company that is now a staple in the global furniture industry. Let's take a look into the inspiring story of IKEA and how it went from rags to riches.

Background of Ingvar Kamprad

Ingvar Kamprad was born in Småland, Sweden, in 1926 and grew up on a farm. Kamprad’s father was a strict man who valued frugality above all else. To this end, he reused everything he could, including old newspapers and broken wood. As a child, Kamprad followed suit, reusing old packaging to store his pencils and seeds. This was the inspiration behind IKEA’s famous concept of “förlagt framtid” (“a place for everything and everything in its place”). As he grew older, Kamprad supplemented his family’s income by selling the produce from their farm at various markets in the area. This is where he first encountered the need for affordable furniture that could fit into the average person’s lifestyle and budget.

How IKEA Started-

Although there is no one particular moment in time when it can be said that IKEA was ‘born’, the first IKEA store opened in 1943 in Sweden. Initially, IKEA sold furniture made by local manufacturers and was run as a partnership between Kamprad, other relatives, and friends. This operation was run out of a small garage named “Ingvar” and “Kamprad” (IKERd) in the small Swedish town of Älmhult. The name “IKEA” was created as a combination of the initials of the company’s two founding partners: “Ingvar Kamprad” and “Eltervall”. Later on in the company’s history, the name was reverse-scrambled back to “Ingvar” and “Kamprad”. IKEA has become famous for its iconic and minimalist “Swedish Modern” design aesthetic, which has remained largely unchanged since the 1950s. IKEA’s core values also lie at the heart of its business model: “low prices, high quality, and sustainability”.

Expansion of IKEA-

In the beginning, IKEA started in Sweden, but today it has stores in 43 countries, with plans to open another 100 stores in the next few years. IKEA has become so large and successful that

it’s often referred to as the “world’s largest furniture retailer”. And yet, it’s still a family-owned

company. Kamprad controls a foundation that owns the company, and two of his sons are on the board of directors. IKEA has a global reputation for its quality design, low prices, and “assembly-required” furniture. The company also has a strong environmental commitment, sourcing its materials ethically, and offering energy-efficient appliances. IKEA is creating an entire ecosystem of products, from furniture and appliances to home services and food. In fact, it recently partnered with food delivery company DoorDash in the U.S., Canada, the U.K. and Australia.

Challenges Faced-

IKEA created a unique retail model that has been very successful, but it wasn’t without obstacles. In the early days, IKEA was a small company that was struggling to compete with larger and more established furniture retailers in the Swedish market. To solve this problem, Kamprad decided to sell furniture as “flatpacks”, which required customers to self-assemble their furniture at home using simple instructions. This instantly made IKEA furniture more affordable to purchase and significantly reduced the costs associated with shipping it around the country. Swapping out the traditional retail model for a more minimalist approach also helped IKEA stand out from the competition. Kamprad kept IKEA alive through the Great Depression and two World Wars. He started IKEA with only $50 in his pocket and ended up becoming one of the richest people in the world.

Innovative Designs

IKEA furniture designs are simple and minimalist, but also functional and affordable. Its founder, Kamprad, credits his frugality for creating remarkably affordable furniture. IKEA’s furniture is very easy to clean and is built to last for many years. And, the company’s products are extremely affordable — its most expensive bed starts at $1,999. There’s a reason people love IKEA so much. Beyond designing furniture, IKEA has also entered the home goods market, including tableware, kitchenware, storage containers, and more. These products are designed to work with IKEA furniture as well as fit into any household budget. IKEA’s products are innovative and help solve many everyday problems.

Global Reach

IKEA has expanded globally, and its stores now exist in 43 countries. In fact, it was the first foreign retailer to open in China. The Swedish retailer has been operating in the Asian country since 1994. IKEA has been an iconic brand for many years, and its business model has been successful. The furniture chain has been operational for about 70 years, and it started its growth strategy in Asia after it expanded to the U.S. in the 1980s. The company is also investing in digital retail. The company has been operating in the Brazilian market since the 90s, and it recently opened its first store in Argentina, the first one in Latin America. It also has stores in Mexico, Peru, and Colombia. IKEA is planning to open two new stores in Brazil in 2021, including a new store in Rio de Janeiro, and another in São Paulo.

Impact of IKEA

IKEA has had a significant impact on the lives of many people, and it has become a global household name in the furniture industry. The company is known for its low-cost, high-quality furniture and home goods, as well as for its minimalist design aesthetic. IKEA is also known for its customer service and has a reputation for being one of the best companies to work for. Employees receive an unusual benefit: free furniture. IKEA employees receive a gift card at the end of every year, which they can put towards a new piece of furniture in the store. IKEA has also been involved in philanthropy, and it has a unique way of giving back to communities. The company created the “IKEA Foundation”, which is a non-profit organization that gives to charities. The foundation also has a program called “Co-creating with Communities”, where communities can apply for funds to help with local projects.


IKEA has created a global furniture empire that houses millions of customers every year. It all started with a farmer who saw a need for affordable furniture that the average person could assemble on their own. From there, the company flourished and evolved to suit the needs of its diverse customer base. IKEA has become a global powerhouse in the furniture industry, and it has an eye for innovative design that is sure to continue to thrive for many years to come.


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