Ingvar Kamprad was born on March 30, 1926 in the province of Småland in southern Sweden. Despite dyslexia, already in early childhood the future billionaire discovered his entrepreneurial skills by starting to sell matches. The child realized that he could earn a little extra money by selling matchboxes bought in bulk at a sale to his neighbors individually. In subsequent years, Kamprad traded in everything: berries, seeds, fish, New Year's decorations, stationery... Trade was also carried out through postal catalogs. In 1943, when he was 17 years old, he founded the IKEA company. The first two letters are the initials of the entrepreneur, the last two come from the name of the family farm Elmtaryd and the local parish of Agunnaryd. Five years later, Kamprad added furniture from local manufacturers to his catalogue. The demand for it impressed the businessman so much that he soon focused entirely on selling household goods.
What will happen to IKEA now?
Ingvar Kamprad is a visionary man. Back in 2012, he realized that he could not manage the company on his own and he was ready to transfer everything into the hands of his sons. By the way, all this time he carefully prepared them for this role and did not show them anywhere. In 2012, the helm of the company was taken over by the three sons of Ingvar Kamprad, who by that time were in their fifties. At that time, everyone was wondering which path IKEA would take—remaining a family business or going public. Six years have passed and some conclusions can be drawn - the company remains a family business, but some changes have nevertheless occurred. In 2017, IKEA experienced some upheaval: Inter IKEA was strengthened and now not only owns the IKEA brand and concept, but is also responsible for development, production and supply chain. The IKEA company will move from the image of a home-based, “lamp” supermarket with furniture to the same “lamp” online store. The online market has already brought down more than one retail chain and sent it to the bankrupt list.
IKEA understands this, so they are now actively working to move their business online. For example, in some countries they began to open points for dispensing goods in the city center: now you don’t need to walk around the hypermarket for a long time in search of the right chair. Now you can simply choose on the Internet and pick up a chair at the pick-up point on the way home - it’s simple. The guys are constantly trying to expand their online range of products. Currently there are more than 9,000 products, and there will be even more in the near future. What do you and I know about IKEA? This furniture, after you have bought it, needs to be assembled. Ingvar Kamprad came up with this in order to reduce the cost of production, and also in order to strengthen your connection with the product, because you will assemble it yourself, therefore, put a part of yourself into it. This, of course, is great, but not everyone wants to assemble furniture - that’s a fact. Therefore, very soon, IKEA furniture buyers will have a choice: assemble the furniture themselves or call furniture assembly specialists. It’s not for nothing that at the end of 2017, IKEA bought the promising startup TaskRabbit, which allows you to find furniture assembly specialists. Another step towards flexible digital sales. What conclusions can be drawn from all this? The company was preparing for Ingvar Kamprad to leave this world. Now IKEA is in the hands of the Kamprad family, it is actively developing and trying to gain a foothold in the online market. Will she succeed? It's hard to say: time will tell.
Kamprad's insight
The business grew, Kamprad hired employees. One of them, Sven Goethe Hansson, proposed a brilliant idea: to create a showroom and display furniture in it. This is how the first IKEA center appeared - in an old workshop building in the city of Älmhult. Gradually, Kamprad moved away from selling other people's furniture; IKEA organized its own production and developed the design itself.
And at some point an insight came. One of the IKEA employees unscrewed the legs of a table that needed to be packaged and shipped to a customer. This is how the famous prefabricated furniture was “invented,” which does not take up much space during transportation and allows you to save on delivery and packaging materials. No less revolutionary was the idea of inviting customers to assemble their own furniture. Firstly, for IKEA, the cost of assembly was thereby reduced to zero. Moreover, without knowing it, Ingvar discovered an important psychological feature of people, which scientists would later call the “IKEA effect.”
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The more effort required from a consumer to obtain a particular product or service, the more valuable it appears.
This effect is successfully used in commerce: this is the queue that needs to be stood in order to buy an already expensive Hermes bag, and the need to get recommendations from two members of closed London clubs in order to become one of them, and Lego sets that need to be assembled, and , of course, furniture from IKEA.
Kamprad saved not only on assembling furniture. The entrepreneur preached an extremely modest lifestyle and demanded the same from his subordinates. In his memoirs and interviews, he claimed that he always tried to fly economy class, drove an inexpensive Volvo for many years, stayed in budget hotels and bought food from farmers before markets closed so he could negotiate a discount. Kamprad also saved on taxes: he lived in Switzerland for several decades, for which he was criticized in his homeland. Years later, the New York Times discovered interesting details of this “modesty”: Kamprad drove a Porsche on the roads of Switzerland, and the house in which he lived was a luxurious villa on the shores of Lake Geneva.
Be that as it may, thrift was firmly ingrained in IKEA's DNA, with even top managers scribbling on both sides of the paper. Confirmation of this can be found in its financial reports (the company is not public, but publishes key indicators). In 2022, its revenue (including sales of goods and services, as well as rental income) amounted to €38.8 billion. Cash accumulated in accounts by the end of 2022 - including through systemic savings - amounted to €23 billion or 43% of assets, despite the fact that goods in production and warehouses are only 4%. This is an incredibly small figure for a retailer that has 422 stores in 50 countries. In terms of debt load, the company is in an extremely comfortable position: the cash cushion exceeds all the company's debts by ten times.
Ingvar Kamprad - short biography, interesting facts, Forbes rating
After Ingvar Kamprad sold the rights to use the IKEA brand for $12 billion in 2012, he somehow disappeared from the Forbes list, but before that he was a regular guest: 2010 - 11th place, 2011 - 53rd, 2012 – 5th place.
We will not retell the biography of Ingvar Kamprad. If you are interested, you can watch it in video format - it’s more informative (video at the very end of the article). We would like to share interesting facts about Ingvar Kamprad and IKEA:
- Ingvar Kamprad created IKEA in 1943 at the age of 17. At first she was engaged in postal transportation.
- Ingvar Kamprad was the chairman of one of the world's richest charitable organizations, the Stichting INGKA Foundation, with assets of up to $40 billion.
- IKEA is the second largest family-owned company in the world. The Kamprads are second only to the Mulier family, which owns the Auchan retail chain.
- Ingvar Kamprad is one of the most stingy billionaires. He always flew second class, stayed only in three-star hotels, drove a budget Volvo '93, always bought clothes on sales, used the same seat for 32 years.
- Ingvar Kamprad was not a good boy. There are also dark spots in his biography. Ingvar Kamprad sometimes went on binges. Information about them leaked to the media every few years. In his youth, Ingvar Kamprad sympathized with the ideas of fascism. For this he publicly apologized in 1994.
- Ingvar Kamprad loved to play on the feelings of the public, which allowed him to “turn on” the effect of word of mouth. For example, in the 1990s there was a massive struggle for the rights of sexual minorities. Ingvar Kamprad came up with the idea and launched the world's first TV commercial featuring a gay couple. Can you imagine the resonance?
- What kind of empire did Ingvar Kamprad build? Currently, IKEA has 403 of its stores in 49 countries (of which 70% are in Europe).
- The search for “ikea unboxing” on YouTube will show almost 2 million videos – just awesome advertising.
- Over the course of a year, 10% of the world's population visits IKEA - everyone needs furniture!
Family
Ingvar always said that the most important thing in his life is family. They were the ones who influenced his life and supported him when IKEA was just taking its first steps.
Talking about his biography, Ingvar Kamprad often joked that trade is in his blood. His mother came from a family of famous merchants of Elmhult. Ingvar's father was not a good entrepreneur and managed the family farm very poorly.
Ingvar's grandfather was the owner of a store where the boy often spent time and sometimes worked part-time. Thanks to his grandfather, Kamprad became seriously interested in commerce. Subsequently, Ingvar will build an IKEA furniture factory on the site of the store. Unfortunately, my grandfather was not a very successful businessman, and, unable to bear the tax burden that fell on the family, he committed suicide. His grandfather's business was taken over by Ingvar's grandmother, from whom he, in his own words, learned strength of character and inherited the ability to trade.
Kamprad himself was married twice and has four children. He and his first wife adopted a daughter from their first marriage. In his second marriage, Ingvar and his wife had three sons, who have now inherited their father’s company.
Early years and first business
Ingvar was born in 1926 in a parish hospital and became the first-born in the family. The boy spent the early years of his life on a farm near the town of Älmhult. And when he was 7 years old, the family moved to Elmtard, where Ingvar’s father began managing the farm. Things were not going very well; the family managed to make ends meet only thanks to the fact that Ingvar’s mother persuaded her husband to rent out rooms to guests.
Ingvar himself recalls that they all lived in one room at that time; the rest were occupied by guests. This may have led to the fact that until the end of his life he would remain an unpretentious person and a “herd animal” (as Kamprad called himself).
Around the age of five, Ingvar Kamprad begins to become interested in money and ways to earn it. The aunt helps buy the boy one hundred boxes, which the boy will subsequently sell at a fair and make his first profit. A little later, he will start selling postcards, catching fish and selling it to his neighbors. He is driven by the desire to earn money and help his father.
Later he would sell ballpoint pens, which at that time were new to the stationery market. He would do this for quite some time, importing pens from France, he sold them at a significant premium in Sweden, and even once gave a product presentation, during which he promised each guest coffee and a bun. More than a thousand people attended the presentation, and Invar almost went bankrupt.
Principles of the head of a furniture empire
The owner of IKEA is not like other rich people - he drives the same car, always flies in economy class, and his furniture in the house is from his own stores (the only exceptions are a standing clock and an old chair). The chair is a different story: our hero believes that it is no worse than new, but the material on it is a little dirty (of course, after more than 30 years of use). Saving or stinginess? Both. Take, for example, business trips: on them, the billionaire always stayed in hotels of no more than three stars. If breakfast was included, he ate to his fill with the expectation that there would be enough for the end of the day. In all his trips, he rarely uses taxi services - he would rather take public transport. This is how you can find out the tastes of the people. And he buys only the cheapest clothes, on sale. And on vacation, Kamprad preferred to ride a bicycle around Sweden. It was precisely this ability to value money that our hero instilled in his sons. The younger Mathias’s statements on this matter are full of respect for his father for this approach to education: he recalls that while still a student he worked part-time for his father, and then got a job on a general basis in one of the shopping centers of his furniture empire. His billionaire dad paid him much less than other hired workers. “If it weren’t for the cheap lunches at IKEA, my wife and I would have had a hard time,” recalls Matthias. Our hero is proud to be compared to Henry Ford, because he, like him, tried to make available to most people those goods that had always been classified as luxury goods. Today, management of the furniture giant has been formally transferred to his sons, but Kamprad still continues to control the affairs of the empire (which includes 180 stores in 30 countries).
The cheapest furniture in Sweden
My first experience with furniture was an advertisement for a chair from a neighboring workshop, which Ingvar called “Rug”. He had difficulty remembering SKUs and numbers due to his dyslexia, so he made up names for each product. This later became one of the most interesting features of IKEA.
The result of the advertising was impressive: the chairs were sold in huge quantities. The entrepreneur began to work in this direction. Kamprad added more furniture, put together a product brochure, and hired his first employee because the family could no longer pack and ship the goods themselves. The number of orders grew, and with it the competition. In this struggle for buyers, prices fell, and with them quality.
Kamprad found a way out. In order not to lose profit and maintain the quality of goods, he decided:
- reduce the cost of goods by starting to work without intermediaries;
- open an exhibition of furniture so that people can see and touch it for themselves and see its quality;
- buy a small factory where he started his own production.
IKEA's success was so overwhelming that it put other companies at risk. Competitors ensured that loggers boycotted him. But Ingvar inherited his grandmother’s persistence and did not give up. When the local market closed, the whole world opened up. Kamprad found an inexpensive supplier in Poland, where, moreover, labor costs were lower.
Kamprad wanted people with the lowest income to be able to buy beautiful, elegant furniture. This idea turned into Ikea's mission.
Books
Despite the fact that Ingvar suffered from dispersion all his life and could not read, he managed to participate in the creation of several books.
In 2002, the famous book created by Ingvar Kamprad “I have an idea!” was published. About the history of IKEA, co-authored with Bertil Thorekul. An honest revelation, a guide for young businessmen. In it, the already middle-aged 82-year-old Ingvar spoke about his childhood, how he came up with the idea of a furniture store “for everyone” and charitable activities.
Thorekul Bertil's book “IKEA Sagas” was written as a result of numerous interviews given by Ingvar. He never spared time for his biographer.
Ingvar’s best work is considered to be the book “The Testament of a Furniture Dealer,” in which he outlined all the basic principles of his company’s work, talked about how to increase sales and corporate governance.
Fascist?
Kamprad has been accused more than once of being Nazi sympathizers. In one of his books, Ingvar Kamprad said that his grandmother was a fan of Hitler and tried to instill in him a love for Nazi Germany.
In 1994, letters from one of the Swedish pro-Nazis were published. They mentioned that Kamprad was an activist of the New Swedish Movement group, which expressed racist views. A real scandal broke out! Workers and consumers demanded an explanation. After this, Kamprad published a letter entitled "My Biggest Fiasco", in which he regretted his participation in the Nazi organization. In addition, it is worth mentioning that one of Ingvar’s best friends was refugee Otto Ullman, a Jew by nationality. Subsequently, Otto will help Ingvar open his first business and greatly influence his vision of finance.
State
Kamprad is called the most modest billionaire. Despite their savings or even thanks to them, from 2005 to 2010. he was one of the ten richest people in the world according to Forbes. True, in 2011 Ingvar left this list with the title of “main loser.”
As of January 2022, according to Bloomberg sources, Kamprad's fortune was estimated at $58.7 billion.
How did the first one appear?
Even the lowest prices do not suit Invar, who is used to saving, he decides to open the first one for assembling furniture and individual components, which allows him to further reduce prices. The idea came to the entrepreneur when he saw how one loader was unscrewing the legs of a table for that purpose. To load it into the car before transport.
At this time, Kamprad invents his famous formula, which says that it is better to sell 600 cheap chairs than 60 expensive ones.
How was IKEA created?
In 1943, Invar entered the school of commerce. Kamprad’s very first business idea was the sale of small items: fountain pens, lighters, saws. He imported goods at low cost, then sold them in different cities in Sweden.
The idea of going into furniture making first came to him in the post-war years. According to Ingvar Kamprad, he decided to found IKEA in order to bypass his long-time rival retailers. The young man purchased several pieces of furniture and placed an advertisement for sale in the newspaper. There was only one problem: furniture is a very expensive product. It’s hard to believe that at the beginning of the last century it cost a lot of money and not everyone could afford to buy furniture. Most people made it themselves.
Ingvar set himself an ambitious task: to make furniture a consumer product. To achieve this, the furniture needed to be greatly reduced in price. By 1950, the entrepreneur hires three more employees and transfers to them the day-to-day care of the company. He himself goes in search of cheap furniture.
Ingvar Kamprad begins the history of IKEA with the search for small local manufacturers with the best prices. And he succeeds superbly. Competitors, seeing a threat in Kamprad's pricing policy, also begin to reduce prices for their products, but cannot keep up with him.
Key points that brought IKEA to where it is today
- Starts to develop his own design.
Due to the boycott of competitors, suppliers were afraid to make the same furniture for everyone.
- Uses the idea of “flat packages” - disassembled furniture with instructions so that the buyer can assemble it themselves.
With the start of cooperation with Poland, Ingvar strives to reduce transport costs. In addition, the problem of transporting large pieces of furniture arose.
- Sets up stand rooms in the store.
This way, buyers could get inspiration and understand how to decorate their home. In addition, the stores have employees who know the entire range very well and can help with advice on home furnishings. And the catalog included an insert of “graph paper” on which buyers could roughly arrange the furniture.
- Changes the store colors from white and red to yellow and blue. In the color of the Swedish flag.
- Installs testing machines at the entrance to stores where furniture was tested.
IKEA has secured the status of inexpensive, accessible and reliable furniture. To prove this to customers, such machines were installed.
In 1965, the largest IKEA store, Kungens Kurva, opened in the suburbs of Stockholm. The features of this particular store determined the future style and concept.
- Moves the store outside the city, where there is more parking space and the price of land is lower.
- Opens a warehouse for customers.
In the first days after the opening, all the goods in the store were bought up. Ingvar decides to open a warehouse for buyers so that they can pick up things immediately from there. This is how the concept was born: a store-warehouse.
- Installs a children's playroom at the entrance.
This idea was spotted at a fair in England, but now it’s hard to imagine IKEA without an aquarium with colored plastic balls.
- Opens a full-fledged restaurant in the store.
Invar understood well that business is not done on an empty stomach. Coffee and buns are good, but you also need to refresh yourself between purchases. Delicious and affordable food attracted visitors as well as affordable furniture, and Swedish meatballs with lingonberry sauce became famous throughout the world.
Store transformations
The opening of the first furniture exhibition in 1953, which Ingvar held in a small renovated building, gave a great impetus to the development of IKEA. He realized what people were missing: a catalog to attract buyers, and a large room where simple interiors and all the products would be presented. Customers will be able to evaluate each item independently and order it here. In addition, Kamprad promised everyone who came to the opening coffee and buns. It was the first mail-order exhibition in the world to operate in this way. The success was amazing.
Kamprad's business developed. The number of customers grew, the catalog became thicker, the photographs became more professional, and the IKEA “family” grew. 5 years later, in 1958, he opened a full-fledged store in Älmhult.
From the opening of the first exhibition to the present day, IKEA has undergone many changes, but Kamprad perceived every obstacle that stood in the way as a new opportunity. “The only important thing is to see her,” said Ingvar.
Fighting competition
Low prices allowed IKEA to quickly become one of the leading companies in the country. This, naturally, did not suit the competitors. An unfair struggle for the buyer began. Competitors spread unpleasant rumors about IKEA and its young leader.
Companies are prohibited from participating in exhibitions. Things were reaching the point of absurdity. Once, the founder of IKEA, Ingvar Kamprad, was banned from participating in an exhibition held in a building that belonged to him.
In addition, because the price of the furniture was very low, consumers began to complain about its quality. Products were still sold through advertisements and catalogs, so buyers, when purchasing furniture, could not evaluate its quality. An immediate solution was required. And Ingvar finds him. He organizes his own exhibition of his own furniture at the factory, this solves two problems at once: buyers see the product and there is no dependence on competitors. Things got better, and five years later Ingvar and his company managed to open a full-fledged store on the top floor of the factory.
By the end of the eighties, IKEA warehouse stores had already covered all of Europe, not only Western, but also Eastern. Kamprad even tried to break into the market of the Soviet Union, but failed. He managed to open his first store in Russia only in 2000 in Khimki. Now on the territory of Russia there is also.
Another innovative approach was the opportunity to try out furniture. Anyone could sit on a chair and see how comfortable it was or lie on an IKEA bed. This is still allowed to visitors in the company's trade pavilions.
