Ikea Against the Tide

The Swedish giant surprises many with a move against the general trend, confirming the transfer of some productions from Asia to Italy. With profitable results.

Certainly one of the most surprising news of these recent days: Ikea is sailing against the tide and by choosing to transfer some product production from Asia to Italy. As stated in a release, the relationship with 24 Italian suppliers for approximately 1 billion Euros of purchases  now "makes Ikea Group the primary client of the Italian furniture product sector". Eight percent of global purchases of the Swedish giant will now be Italian, following China and Poland.

This trade balance continued and expanded from 2011, since Ikea "buys in Italy more than they sell.” As a side note, 63% of purchases from Ikea in the world, come from European suppliers.
This latest move to shift some production from Asia to Italy, especially effects the Piemonte region. Lars Petersson, CEO of Ikea, Italy explains: "We have identified new Italian partners who have taken the place of Asian suppliers, thanks to their competence , their commitment and ability to offer better quality products and at lower prices than their Asian competitors." The share of 8% of overall IKEA orders placed in Italy expands to 34% considering only kitchens: Worldwide, 1 kitchen out of every 3 sold by Ikea is produced in Italy. In addition to kitchens, Ikea also purchases appliances, bedrooms, shelving, bookcases and bathrooms.  Italian districts are among the Swedish group’s major suppliers: 38% of purchases from Veneto, 30% from Friuli and 26% from Lombardia (more than Sweden or Germany).

All this has also a strong impact on employment too: around 2,500 planned new jobs, which added to the 6,600 employees of the commercial and logistics Ikea in Italy, will turn total 11,000.

This is just one example of a major turnaround, as evidenced also this interesting article by Alan Robertson about U.S. manufacturing industry, concerning this progressive loss of appeal and competitiveness of Asian countries. And through the analysis of these new scenarios, Nicola Evoli, CIO-International Sales Strategy at Grottini Retail Environments, emphasizes: "It is time to extend these industry reflections also to the retail sector, widening the discussion and sharing. We know our strengths and competitive advantages of Italian industry, such as high technical and design expertise, excellence and quality. Our growth over the past two years, despite the recessive brakes of financial markets, is an indisputable confirmation.”