Ikea debuts in Korea
Ikea has landed in Korea – but not without controversy.
The budget kitset furniture and homewares retailer from Sweden has opened a website to start tempting Korean shoppers with their offer before its first 27,668sqm store opens in Gwangmyeong, in Gyeonggi Province, on December 18. More shops will follow, with the initial plan to focus on Seoul’s surrounds.
Its online catalogue boasts 8632 items ranging from furniture to toys, but lacking kitchenware for the time being.
The website is not yet transactional – but will be when the retail store opens. In another brand-building initiative, Ikea will open a pop-up store at Seoul Station this Wednesday (November 19).
Opinions have been divided on Ikea’s impact on the Korean market since its plans were first revealed several years ago. Korea has a tightly regulated and controlled business market, a legacy of its planned evolution from developing nation into the top tier of world economies.
But in the furniture sector, 70 per cent of the market is shared by a myriad of small manufacturers, many of them family-owned. Some analysts expect them to be impacted heavily.
“It seems that Ikea will compete with non-brand furniture factories near Ilsan and Hanam furniture complex, which have only price competitiveness,” said Park Joong-sun, an analyst at Kiwoom Securities, in a research note.
Another analyst, Park Han-woo, from HMC Investment and Securities, said he, too, expects larger damage to small manufacturers than the two leading local furniture brands Hyundai Livart and Hanssem.
“With the advancement of Ikea, people will continue preferring brand furniture in the market. They will continue growth in the local market where non-brands take a bigger portion,” he wrote.
Park Han-woo said Ikea’s main target will be “young people who want to purchase reasonably-priced goods in a free atmosphere”. That, he said, is a different market to the two majors who sell branded items from stores in central city locations.
With Koreans not yet used to the flatpack concept, Ikea will offer delivery and assembly services for around US$30 and $40 respectively.