Few companies have shaped how people furnish their homes like IKEA. Its flat-pack furniture, blue-and-yellow stores and meatballs are known around the world. But the company began on a small farm in southern Sweden, started by a teenager with a knack for selling. In Part 5 of How Global Giants Began, we look at how IKEA was built on low prices and clever ideas.
A young salesman from Småland
Ingvar Kamprad grew up on a farm called Elmtaryd near the village of Agunnaryd in Småland, a region known for its rocky soil and thrifty people. As a boy he bought matches in bulk in Stockholm and sold them individually to neighbours at a profit. He later sold fish, Christmas decorations, seeds and pencils.
In 1943, at age 17, he registered his business with money his father gave him as a reward for doing well at school. He named it IKEA, from his initials (Ingvar Kamprad), the farm (Elmtaryd) and the village (Agunnaryd).
From pens to furniture
At first IKEA sold small items by mail order: pens, wallets, picture frames, watches and nylon stockings. In 1948 Kamprad added furniture made by local manufacturers in the forests near his home. Furniture sold well, and in 1951 he published the first IKEA catalogue. Soon he dropped the other products to focus on low-priced furniture.
A showroom to build trust
Mail-order furniture companies were competing hard on price, and quality was suffering. Kamprad worried customers would lose trust. In 1953 he opened a showroom in Älmhult, where people could see and touch the furniture before ordering. It was an early version of the IKEA store.
The table that would not fit in a car
The flat-pack idea is often traced to 1956, when IKEA employee Gillis Lundgren was trying to fit a table into a car to deliver it, or to photograph it for the catalogue, depending on the version of the story. It would not fit, so he removed the legs. The team realised that furniture shipped flat and assembled at home would save on storage, transport and damage, which meant lower prices.
Flat-packs became the core of IKEA's model: customers do some of the work, carrying and assembling, in exchange for lower prices.
A boycott that made IKEA stronger
IKEA's low prices angered established Swedish furniture retailers. They pressured manufacturers to stop supplying IKEA and tried to keep it out of trade fairs. Rather than give up, Kamprad looked abroad and in 1961 began sourcing furniture from manufacturers in Poland, where costs were much lower. The boycott pushed IKEA to design its own furniture and build its own supply network, which became a lasting advantage.
Growing worldwide
IKEA opened its first store outside Sweden in Norway in 1963, followed by Denmark, Switzerland, Germany and many more countries. Its stores grew into large out-of-town warehouses with showrooms, self-service warehouses and restaurants to keep shoppers longer.
In 1976, Kamprad wrote The Testament of a Furniture Dealer, describing IKEA's values: simplicity, cost-consciousness and a mission to create "a better everyday life for the many people." Kamprad was famous for his own frugality, flying economy and driving an old car. He died in 2018.
Business lessons from IKEA
- Design for the price. IKEA often sets a target price first, then designs a product to meet it.
- Turn problems into systems. A table that would not fit in a car became flat-pack logistics.
- Let customers participate. Self-service and self-assembly cut costs for everyone.
- Adversity can force independence. The supplier boycott pushed IKEA to control its own supply chain.
- Culture matters. Frugality and simplicity were lived from the top.
In Part 6, we visit a hamburger stand in California and the milkshake-machine salesman who turned it into McDonald's.
How Global Giants Began: the full series
- Part 1: Coca-Cola
- Part 2: Toyota
- Part 3: LEGO
- Part 4: Samsung
- Part 5: IKEA (you are here)
- Part 6: McDonald's
- Part 7: Nike
- Part 8: Apple
- Part 9: Amazon
- Part 10: Google
Dates, prices and figures are commonly cited historical values and may vary slightly between sources. Company names and trademarks belong to their respective owners; HorizonDesk is not affiliated with any company mentioned.
