Swedish based IKEA furniture is well known for its modern (often unusual) design and since its establishment in 1943, has become the world's most iconic furniture brand. Because much of it is self-assembly furniture (also known as "flat-pack"), it is designed to be assembled by the consumer rather than being sold pre-assembled. IKEA claims this permits them to reduce costs and use of packaging by not shipping air—the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled.

IKEA also claims to have pioneered the use of more sustainable approaches to mass consumer culture. Its founder calls it "democratic design," meaning that the company applies an integrated approach to manufacturing and design (see also environmental design). Responding to the explosion of human population - and material expectations - in the 20th century, the company has mastered economies of scale, capturing material streams and creating manufacturing processes that hold costs and resource use down, such as the extensive use of particle board. The intended result is flexible, adaptable home furnishings, scaleable both to larger homes and smaller dwellings.

The company was founded by Ingvar Kamprad at age 17 in 1943. The company name is a composite of the first letters in his name and the names of the property and the village in which he grew up: Ingvar Kamprad Elmtaryd Agunnaryd. This acronym was possibly chosen because it was similar to the Greek word [oikia] (home) and to the Finnish word oikea.

Originally IKEA sold pens, wallets, picture frames, table runners, watches, jewelry and nylon stockings or practically anything Kamprad found a need for that he could fill with a product at a reduced price. Furniture was first added to the IKEA product range in 1947 and, in 1955, IKEA began to design its own furniture. The company motto is: Well designed affordable quality furniture to the many people.

At first Kamprad sold his goods out of his home and by mail order, but eventually a store was opened in the nearby town of Älmhult. It was also the location for the first IKEA "warehouse" store which came to serve as a model for IKEA establishments elsewhere and on 23rd March 1963, the first store outside Sweden was opened in Asker, a Norwegian municipality outside Oslo. Australia's first IKEA franchise store was opened in 1975.