Ikea mini-stores planned for Southeast Asia

Ikea mini-stores are planned by the Swedish furniture giant to boost its presence in Southeast Asia.

It regards showrooms in smaller cities as a low-cost way to reach the growing middle class. Research firm Nielsen Holdings has estimated the population in Southeast Asia’s regional cities will have grown 18 per cent by 2025 since 2015.

Ikea is starting its Southeast Asia roll-out in Thailand, with plans for compact stores in Chiang Mai, Pattaya, Udon Thani and other Thai cities during the next three years. These mini-stores will not keep large furnishings in stock, with items being delivered as needed from larger stores in major cities.

Ikea already has a small store prototype in Phuket. The 2600sqm shop cost the retailer THB175 million (US$5.6 million) to build – a 30th the cost of Ikea’s full-scale store on the outskirts of Bangkok.

Computers in the store centre can be used by customers to order furniture and accessories online they have inspected in store. Their purchases arrive from the Bangkok store two to three days later, ready for pickup. For an extra fee, customers can have their orders delivered to their homes.

When it opened in 2015, the pioneering store struggled, but last year turned a profit for the first time.

Meanwhile, Luxembourg-based Ikano, which runs Ikea’s Southeast Asian stores, aims to have a location in Manila by 2020 and hopes to expand to Vietnam’s Ho Chi Minh City by 2022.

While Ikea has compact stores internationally, the idea failed to catch on in Japan, with a 1500sqm location in Kumamoto set to close at the end of July.

Ikea has more than 400 stores worldwide. Global sales topped 38.3 billion (US$46.8 billion) for the year to the ended of August 2017. Yet the company has just nine stores so far in Southeast Asia.

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