IKEA Celebrates 1st Bumper Year in Korea

Swedish furniture giant IKEA will open five more stores here by 2020, IKEA Korea retail manager Andre Schmidtgall told reporters Wednesday.

Speaking on the first anniversary of the first IKEA store on the southern outskirts of Seoul, Schmidtgall said the decision was prompted by its better-than-expected performance.

The store in Gwangmyeong, Gyeonggi Province is IKEA’s second largest in the world. Some 6.7 million customers visited over the past year and sales reached W308 billion (US$1=W1,179).

“Korea is a great market with huge potential, with a growing customer interest in home furnishing,” Schmidtgall said.

IKEA plans to invest W1.2 trillion by 2020 to open the five additional stores in Goyang north of Seoul, Gangdong in the eastern part of the capital, as well as Daejeon and Busan. The new stores are expected to create 3,500 jobs. The store in Gwangmyeong employs 913 Korean workers.

The next store will open in Goyang in 2017 on an even bigger scale.

Schmidtgall played down concerns that IKEA harms regional businesses. “The actual numbers do not show that,” he said.

The Korea Distribution Association analyzed credit card transactions from December 2014 to August this year and found that revenues at stores within a 10 km radius of the IKEA Gwangmyeong store in fact rose between 7.5 and 27.4 percent.

Schmidtgall pointed out that the Gwangmyeong store is the only IKEA outlet in the world to offer part of its underground floor space to small businesses.