Bom Kim is a Korean-American Billionaire businessman who founded Korea's largest e-commerce company, Coupang. With Coupang valued at $9 billion in 2018, Kim has become the 2nd youngest billionaire in Korea at the age of…
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Ingvar Kamprad was a Swedish billionaire business magnate best known for founding IKEA.
Ingvar was born in 1926, in a small farm called Elmtaryd near the village of Agunnaryd in Småland, southern Sweden. Ingvar started his first business at the age of 5, by selling matches to his neighbours, an essential item in every home back then.
Even at a young age, Ingvar knew how to make profits by buying matches in bulk from Stockholm and selling them individually. From matches, he expanded to selling flower seeds, greeting cards, Christmas tree decorations, and later pencils and pens.
At age 17, Ingvar’s father rewarded him a small sum of money for doing well in school, which he used to set up a company in 1943. Ingvar named the company IKEA, an abbreviation for Ingvar Kamprad from Elmtaryd, Agunnaryd, his boyhood home.
The company was set up for his household goods business, it was only until 1948 furniture was introduced into the IKEA range.
The post-war Swedish government had built lots of housing and offered home furnishing loans. There were also many small furniture factories in Småland. Ingvar started selling furniture at low prices, he believed that anyone should be able to afford stylish and modernist furniture.
However, many furniture retailers felt threatened by the low prices of IKEA products and pressured the manufacturers to boycott IKEA. It was a blessing in disguise as this forced Ingvar to start design items in-house and source suppliers overseas at lower cost.
First of all, we have low costs, low rents and an efficient way of handling our goods. Secondly, and this is more unique, is our interest in the production.
Through our own design and construction, we have come up with cost-effective solutions.
To design a desk which may cost $1,000 is easy for a furniture designer. But to design a functional and good desk which shall cost $50 can only be done by the very best.
What is good for our customers is also, in the long run, good for us.
It was also in the 1950s when IKEA opened the first showroom in Sweden, and launched the first annual IKEA home furnishing catalogue.
The eureka moment came when Ingvar saw an employee take the legs off a table to fit in a customer’s car. The incident prompted Ingvar to introduce the flat-pack, self-assembly products in 1953, overcoming the logistics challenges.
The first IKEA restaurant opened in 1960, after Ingvar observed that people leave the store at lunchtime to eat elsewhere.
Hungry customers buy less, it’s tough to do business on an empty stomach.
Today, food contributed to close to 5% of total IKEA’s revenue, but more importantly it attracts and retains customers at the store.
In 1965, the flagship IKEA store opened at Kungens Kurva but caught fire 5 years later, which wasn’t all bad news though. A self-service area was introduced after the store reopened, where most products can be picked up and driven home by the customers.
IKEA started expanding overseas since then, and there are over 400 IKEA stores worldwide in more than 50 countries today.
Ingvar had been listed in the world’s rich lists, the complex IKEA ownership structure made it difficult to estimate how rich Ingvar was. Despite his huge wealth, Ingvar was typically known as a frugal businessman who lived the lifestyle he preached for his company.
He was known for driving an old Volvo, flew economy class, stayed in budget hotels.
Why should I choose first class? To be offered a glass of champagne from the air hostess? If it helped me arrive at my destination more quickly, then maybe.
How the hell can I ask people who work for me to travel cheaply if I am traveling in luxury? It’s a question of good leadership.
Critics argued that it was intended to reinforce the company’s no-nonsense brand and encourage cost-awareness within the company. It was reported that Ingvar had a villa overlooking Lake Geneva, vineyards in Provence, and he drove a Porsche in addition to his Volvo 240.
Ingvar lived in Switzerland from 1976 to 2014 to avoid Sweden’s high taxes, he moved back to Sweden after being away for 40 years.
In 2016, Ingvar fell off the Forbes billionaires list after he transferred his assets to his sons Peter, Mathias and Jonas, who gradually succeeded their father.
Until his death in 2018, Ingvar continued to visit IKEA stores around the world. Economy class or not, his legacy will be remembered for years to come.
