IKEA <3 Russia - retrospective reflections and reactions

One of my favorite books regarding humans, markets, and relations is IKEA Loves Russia (IKEA älskar Ryssland in Swedish). The book was given to me by Lennart Dahlgren, “Kamprad’s right-hand”, during his lecture at Stockholm University in 2011 when I was studying the Russian language. I admired the book at that time because of its mindblowing and absurd situations, Dahlgren’s general experience, and optimism about the future. Today, I can admire the book more because of its historical development and how things have dramatically changed since then.

For those familiar with IKEA founder and legendary businessman Ingvar Kamprad, it should be no surprise that he had a big dream of establishing IKEA in Russia—even as far back as the late Soviet years. During the Gorbachev era, when perestroika and glasnost were reshaping the Soviet economy, Kamprad saw an opportunity. He was also inspired by historical Swedish industrialists and businessmen, such as the Nobel brothers, who were active in Tsarist Russia before World War I.

I sometimes say that Kamprad was a person who went from being an extreme nationalist to being a liberal globalist. The historical perspective is crucial in understanding IKEA’s later push into Russia. Kamprad was not just interested in new markets—he saw Russia as a country with deep potential, where Swedish business traditions had previously thrived. But unlike the entrepreneurs of the 19th century, who had operated in an imperial system with close ties to the ruling elite, Kamprad wanted to build IKEA in a post-Soviet world filled with dramatic changes and instability. Where the rules were uncertain, and corruption was widespread.

When IKEA, under Ingvar Kamprad’s leadership, decided to establish itself in Russia, it was far from an obvious step. After the fall of the Soviet Union, Russia struggled with the transition from a planned economy to a market economy, but the process was smooth. Privatization created new oligarchs, the rule of law was weak, and the business climate was shaped by informal power structures where bribes and political connections often determined who would succeed.

Principles over Bribes

One of the most striking aspects of IKEA’s story in Russia is how Kamprad remained true to his principles. While many global and regional companies entering the Russian market during the 1990s and 2000s “adapted” to corruption, mismanagement, and bribing officials—Kamprad refused to compromise. Rather than paying off politicians and bureaucrats to speed up the process, he and his team developed alternative strategies.

One of his most effective tactics was building strong relationships with local-level politicians and regional leaders. Kamprad and IKEA convinced these decision-makers that their presence would boost the local economy, create jobs, and bring long-term investments. This approach allowed IKEA to gain support from lower-ranking officials and business leaders, effectively bypassing some of the high-level corruption that often paralyzed foreign enterprises in Russia.

Dahlgren recounts how IKEA constantly faced anonymous payment demands, mysterious construction permit delays, and sudden regulatory changes that always favored domestic actors. He describes the frustration of running a business project where the game's rules could change overnight, depending on who was in power.

Another challenge was protectionism and special interests within the Russian economy. Many domestic wood and furniture producers were skeptical of IKEA’s arrival, fearing that the Swedish company would outcompete them. Instead of ignoring these concerns, Kamprad took a strategic approach—he reassured Russian manufacturers that IKEA would not just sell products in Russia but also invest in local production. By integrating Russian suppliers into IKEA’s global supply chain, Kamprad turned potential adversaries into partners, ensuring that IKEA’s presence in Russia benefited multiple stakeholders.

At the same time, he talks about the Russian employees—the local staff who wanted to see something different and appreciated working for a company that tried to be transparent. IKEA built a loyal workforce in Russia, and many employees saw the company as a symbol of a new kind of economic culture—one not solely based on money and connections but on quality, long-term planning, and customer focus.

"The Spirit of the 2000s" and 50 Shades of Absurdities

One of the book's most fascinating aspects is how it captures the "spirit of the time" in Russia during the 2000s. This was a period of high economic optimism, and many Russians, including political and economic elites, believed that market liberalization and trade would lead to a brighter future. Dahlgren’s experiences illustrate how, despite the corruption and bureaucracy, there was a genuine enthusiasm for international cooperation and investment.

IKEA and many other Western businesses chose to withdraw from Russia. This may seem like a failure from a short-term business perspective—decades of investments and infrastructure were lost in months. But from a broader perspective, it reminds us that business and politics are never entirely separate. Although Dahlgren’s book was written long before the war, it provides important insights into how Russian business culture functions and why it led to today’s confrontational stance, combined with political developments.

However, this optimism coexisted with an often absurd and chaotic regulatory environment. One of the most mind-blowing stories in the book is how IKEA was forced to obtain nearly 300 permits to open one of its first stores. The sheer complexity of Russian bureaucracy, with unpredictable legal interpretations and administrative hurdles, created an environment where even the most straightforward business decisions became prolonged battles of negotiation and endurance.

The book illustrates how, even in the 1990s and 2000s, Russia moved toward a system where economic power and political control increasingly intertwined. Dahlgren describes how state and semi-state actors used regulations and legal processes to pressure foreign companies—a model we now see being applied in even more extreme ways.

This dual reality—of hope and opportunity and bureaucratic madness on the other—makes Dahlgren’s account both inspiring and frustrating. It provides a raw and honest depiction of what it took to build something in Russia during this era.

Why This Book Still Matters

The book remains one of the best for understanding the intricate relationships between individuals, organizations, and markets. It is a story about business expansion and reflects how values, persistence, and smart strategies can navigate even the most difficult environments.

At the same time, the book offers deeper insights into Russia’s political and economic evolution. Reading it today, in the context of Russia’s war against Ukraine and its increasing isolation from the global economy, makes one reflect on what could have been. There was a time when international companies and Russian businesses were working together, when there was optimism about integration into the global economy, and when a different future for Russia seemed possible.

Dahlgren’s stories serve as both a testament to that lost optimism and a lesson in what it means to do business in a system where political and economic interests are tightly interwoven. It is a reminder that while markets and trade can inspire and connect people, they are never detached from the political realities that shape them.

One of the significant questions following Russia’s war against Ukraine is how the country will change. What will happen to the Russian economy if a peace settlement ever materializes? Will we see a new opening toward the West, or will the authoritarian regime remain intact?

Dahlgren’s book can serve as a historical reference point. It reminds us that change often happens quickly and unexpectedly in Russia. When IKEA tried to establish itself, many Russians wanted to transform their country and open it up to the world. The same desire may exist in the future, although it is difficult to see how or when such a transformation might occur.

Dahlgren’s experiences also serve as a warning. Western companies and organizations must understand that even after a future regime change, the Russian economy will likely remain uncertain, dominated by strong informal power structures, and deeply entangled with politics.

IKEA’s journey in Russia was filled with challenges, victories, and setbacks—but in many ways, it also reflects the larger story of Russia’s complicated relationship with the global economy. That makes IKEA älskar Ryssland a book worth revisiting, not just for business professionals but anyone trying to understand the dynamics between economic ambition, political power, and human resilience.

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