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Minority Investment can help a Franchise Grow Bigger

Shahram Warsi
Shahram Warsi May 22 2019 - 3 min read
Minority Investment can help a Franchise Grow Bigger
The Ingka Group currently owns and operates around 367 IKEA stores that eventually contribute to 90 percent of IKEA’s total retail sales.

Also known as minority interest, a minority investment can be termed as a non-controlling share in a company held by an investor or another company. In simpler terms, a minority investment allows a brand to buy or sell a few shares of the company in order to grow a business according to a specific plan or strategy.

Recently, Ingka Group which is IKEA’s largest franchise partner sealed a minority investment in home renovation and design startup, Livspace. In fact, this became the first financial investment by the Swedish furniture giant, IKEA in India. 

Creating Possibilities through Collaboration

The Ingka Group currently owns and operates around 367 IKEA stores that eventually contribute to 90 percent of IKEA’s total retail sales.

Anuj Srivastava, co-founder and CEO, Livspace says, “We look forward to immense collaboration possibilities in areas such as catalogue and marketplace integration, retail technology, and online-to-offline innovations.”

Developing New Home Interior Solutions

Every brand’s strategy and investment has its own motive that business owners want to fulfill in one way or the other. The scenario with the minority investment that took place between IKEA and Livspace is similar.

The Bengaluru-based home renovation and design startup will be looking to develop new home interior solutions along with expanding its offline footprint. The brand name IKEA might help Livespace to enhance and improve their products and market expansion as IKEA is among the popular brands existing globally.

Krister Mattson, Head of Ingka Investments, Ingka Group says, “Convenience and personalisation are becoming increasingly important to the future of home furnishing and customers life at home. This minority investment aligns closely with the digital direction of Ingka Group and our core business, IKEA Retail, and we are looking forward to exploring new opportunities together with Livspace.”

Creating Omnichannel Interiors and Furniture Purchase Experience

An investment usually becomes successful when the vision of a brand is converted and transformed into a reality. This eventually creates opportunities that can be utilised by entrepreneurs and franchisors for expanding their businesses.

“The investment is a huge endorsement of our vision and gives us the opportunity to create a large omnichannel interior and furniture purchase experience for homeowners.

Today, when you walk into an IKEA store, you can only buy products, now with our design platform and technology capabilities, it gives customers a holistic experience in terms of reimaging interiors end-to-end,” added Anuj.

IKEA is all set to dominate the Indian market as well after marking a good presence in foreign countries. IKEA entered the Indian soil last year in August by setting up their first store in Hyderabad. The brand claims to have acquired lands in cities like Bangalore, Mumbai, Gurugram, Surat, Ahmedabad, and Chennai as well.

 

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