Swedish furniture maker IKEA plans to spend about 300 million euros (US$327 million) in South Korea over the next three years to increase market share in the East Asian country.
“We are investing a lot in Asia,” Tolga Oncu, head of the company’s retail Ingka Group, said in an interview in Goyang, South Korea, on Saturday on his first visit to the country since 2018.
The group is to open another so-called blue box store in Seoul and is considering “many more smaller formats.”
Photo: AFP
IKEA, known for its do-it-yourself business model, has four outlets in South Korea, and offers online shopping and delivery. The company is seeking to increase consumers’ access to stores, Oncu said.
“Maybe you don’t need to walk more than 15 minutes to get your products in a convenience store or somewhere,” he said.
IKEA has in the past few years invested in automation improvement of its shipping service, which can lead to lower prices, he said.
“Korea has one of the highest quality of last-mile deliveries,” he said.
The brand is planning to cut prices globally and is looking at 10 percent to 20 percent reductions for key products in South Korea, he said.
In the US, IKEA has lowered retail costs on almost 1,000 products, including on its popular Billy bookcase, and plans to keep cutting.
The firm began the US price-cutting push in January and is also lowering prices across the more than 60 other markets where it operates. Consumers have responded by increasing their purchases of those cheaper items at IKEA stores.
The furniture maker sells 9,500 products and raised prices across the board for the first time in decades during the COVID-19 pandemic because of supply-chain disruptions. Now, declines in the prices of raw materials and lower transportation costs have enabled the cuts, the firm said.
“I think in general for IKEA worldwide, it is looking like this is going to be one of the biggest price reductions that we have ever done in one year,” Oncu said.
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