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Ikea to enter Indonesia

Two years from now, Indonesians will no longer have to travel to Singapore or Malaysia to buy furniture and homewares from Ikea: the Swedish furniture retailer will open its first store in Indonesia in 2014.

Ikea has signed a franchise agreement with Indonesian retailer Hero which retails food and non-food merchandise in large and small format outlets. Hero operates Giant Hypermarkets, Hero Supermarkets, Guardian drugstores and Starmart convenience stores.

“The company (Hero) must establish Ikea stores according to the agreed quantity starting from 2014 to 2021. There are possibilities to increase the number of Ikea stores after the period ends,” the franchise agreement states.

Indonesia, the 36th country worldwide and the fourth in Asia, to host Ikea, will boost the total number of Ikea’s store count worldwide of 325.

Once operational, Ikea will be a big competitor to home retailers including Olympic Furniture which has 49 shops nationwide and Ace Hardware Indonesia which has 57 stores across the country.

Ikea’s arrival will give opportunity for Indonesian home retailers to learn and improve furniture designs.

“We can learn how to improve and renew designs of our furniture,” Indonesian Franchise Association chairman Anang Sukandar said.

With a population of 240 million and a per capita consumption predicted to double over the next three years, Indonesia will be one’s of Ikea’s fast growing markets.

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