IKEA Mexico Eyes Yucatán as it Plans Future Expansion

Swedish furniture giant shifts focus to companies and Airbnb hosts as logistics challenges persist across Latin America

IKEA Mexico is betting big on business customers as it fights ongoing supply chain problems that have frustrated shoppers since the company entered the Mexican market in 2020.

The Swedish retailer now expects 8% sales growth in 2025, driven largely by a new focus on companies and short-term rental hosts rather than just home shoppers. But customer complaints about failed deliveries, damaged furniture and lengthy delays persist, particularly for kitchen orders that can take three to four months.

“Everything the logistics department is working on constantly day by day to be able to sustain stock over time,” said Efraín Rojo, IKEA Mexico’s interior design and communications manager, acknowledging that inventory problems continue despite some improvement.

Yucatán leads expansion targets

IKEA reportedly sees the greatest growth potential in Yucatán, Baja California and Nuevo León, though Mexico City still represents 50% of consolidated sales. IKEA finally began delivering to Yucatán in June 2023, ending years of frustration for Peninsula residents who couldn’t access the popular Swedish brand.

The timing proved perfect. Yucatán’s booming tourism industry and growing expat population have created strong demand for furniture solutions, particularly among Airbnb hosts and property developers catering to international visitors.

Business boom drives growth

The boom in platforms like Airbnb triggered new demand across Mexico’s real estate sector: furnishing apartments quickly, attractively and functionally for short-term rental. IKEA developed specialized space planning services within its stores targeting companies, with consultants and designers providing personalized advice for everything from offices and small businesses to tourist apartments.

The company’s Mexico City store now displays configurations designed for small businesses like cafes and restaurants. This B2B segment has become one of the growth bets for the brand, which expects a sales increase of 8% in 2025.

The return to office work after the pandemic also created demand for functional, versatile corporate furniture. Companies need adaptable solutions as they shift between remote, hybrid and in-person work models.

The company currently operates three physical stores in Mexico City, Puebla and Guadalajara. Plans include a fourth store, which could be located in Monterrey or the capital.

Supply chain headaches continue

Social networks have served as a channel to express complaints related to failed deliveries, damaged furniture and prolonged delays. Sometimes IKEA notifies customers that products are available for pickup at stores, but when they arrive the items aren’t ready.

“With time it will be fixed and what we have left to do is address customers appropriately,” Rojo said.

The challenges reflect broader issues facing furniture retailers in Mexico. Furniture manufacturing in Mexico is bigger than ever, with around $1 billion in furniture exported to the United States each year, according to manufacturing consultant NAPS Inc. But companies still struggle with complex distribution networks and logistics coordination.

Local production increases

To reduce dependence on international suppliers, IKEA has begun to strengthen its national supplier base. Currently, around 20% of products sold in its stores are manufactured in Mexico. These include textiles, fresh foods and products made at the company’s mattress and sofa plant in Saltillo, Coahuila (about 250 miles or 400 kilometers southwest of the Texas border).

The Saltillo facility, which opened in 2021, employs about 500 people and produces for North American markets. This move toward local production is part of a broader strategy to maintain supply on sales floors.

Market analysis drives growth

“To be able to present an intelligent solution we have to know the market perfectly,” says Rojo. “We will continue doing analysis of how behavior is within Mexican homes, within each of the cities, because life at home in Guadalajara is not the same as in Puebla or Mexico City.”

The company’s expansion strategy targets Mexico’s growing middle class and the estimated 65,000 furniture establishments across the country, according to Mexico’s national statistics institute INEGI.

IKEA Mexico operations began with online sales in October 2020, followed by the first physical store in Mexico City in April 2021. The company closed 2024 with nationwide expansion of its e-commerce platform, now covering all 32 states, and added 46 new pickup points.

Despite ongoing logistics challenges, IKEA’s bet on business customers and local production could help the company capture more of Mexico’s estimated $9.5 billion home furniture market, which analysts expect to grow 4.2% annually through 2030.