IKEA Indonesia is expanding its network of local suppliers to establish the country as a global sourcing hub for wood furniture, natural-fiber goods, and home accessories.
Charlie Landale, managing director at IKEA Indonesia, stated that the company now collaborates with 18 Indonesian suppliers across these product categories. Items produced in Indonesia are available in local stores and exported to IKEA markets worldwide.
Local sourcing reduces costs and delivery times
Landale explained that sourcing closer to home allows the retailer to cut transportation distances, shorten delivery times, and adapt quickly to changes in customer demand. Local production works alongside flat-pack design, efficient logistics, and economies of scale to maintain low prices.
“Affordability comes from combining product design, flat-pack innovation, efficient logistics, economies of scale, and long-term supplier relationships,” Landale said. “Local sourcing strengthens these efforts.”
He called the “Made in Indonesia” initiative a strategy that combines responsible sourcing, strong supplier collaboration, and investment in local skills. The company intends to strengthen ties with current partners and bring in new ones.
IKEA Indonesia is coordinating with Inter IKEA, the global franchisor, and IKEA Supply, the procurement division, on investments, innovation, and sustainable manufacturing. Landale noted that locally sourced products could integrate into the group’s global supply chain while giving Indonesian suppliers access to international markets.
For smaller businesses, IKEA operates Teras Indonesia, a program that helps micro, small, and medium enterprises reach more customers through its stores. Selected locally made products feature in-store labels detailing their origin, suppliers, and craftsmanship.
Suppliers gain international exposure
Landale described the partnership as mutually beneficial: IKEA secures a more flexible and cost-effective supply chain, while Indonesian suppliers gain access to global buyers. Though the company does not disclose exact export figures, industry observers highlight Southeast Asia’s growing manufacturing sector as an appealing alternative to China for global retailers.
In IKEA’s Indonesian stores, shoppers can find “Made in Indonesia” tags on rattan baskets, teak side tables, and woven textiles. The tags include short profiles of the artisans or workshops behind each item, offering a visible connection to the local economy.
This visibility helps small producers, who often face difficulties expanding. By linking them to IKEA’s global distribution network, the retailer enables local workshops to export without handling complex trade regulations alone.
Challenges remain, however. Some suppliers have needed to adjust to IKEA’s strict quality and sustainability standards, which may require new equipment or training. Landale recognized the adjustment period but confirmed the company assists partners in meeting these requirements.
The retailer has not announced a specific target for additional suppliers. Landale emphasized that the priority is strengthening relationships with current partners while identifying new ones. The existing 18 suppliers already produce flat-pack wardrobes, handwoven rugs, and other items, all marked with the “Made in Indonesia” label.
This approach supports local businesses while reinforcing IKEA’s global supply chain.
