Ikea Philippines debut imminent
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The launch of Ikea Philippines is a major step closer after the Swedish furniture giant’s local partner won Board of Investment (BOI) approval to set up business.
News of the BOI pre-approval of a bid by Ikano Pte Ltd, the operator and franchise-rights owner of Swedish furniture brand Ikea in key Asian markets, was broken by the Business Mirror, which cited BOI documents dated last November.
Ikea has always wanted to establish a presence in the Philippines, especially Manila, and there have been reports of planning for a launch as far back as 2013.
The Business Mirror points out that under current law, before engaging in retail trade business – or investing in an existing store in the Philippines – all foreign retailers must have a net worth of either US$200 million or $50 million, depending on its classification as a foreign retailer.
“The foreign retailer must also have five operating retail branches or franchises in global locations, unless it owns at least one store worth $25 million, and a five-year track record in retailing,” the publication explained.
Ikea is already operated in Hong Kong, Indonesia and Taiwan by a subsidiary of Hong Kong-headquartered Dairy Farm International, which also owns the Guardian chain of health and beauty shops, and pharmacies.
It is run by a separate franchisor in Singapore, Thailand and Malaysia.
Questions & Answers
Q.Which entity has secured the necessary approval for Ikea's entry into the Philippine market?
Which entity has secured the necessary approval for Ikea's entry into the Philippine market?
Ikano Pte Ltd, the operator and franchise-rights owner for Ikea in several Asian markets, has received pre-approval from the Board of Investment. This allows them to set up the Swedish furniture brand's business in the Philippines.
Q.What specific financial and operational requirements must foreign retailers meet to operate in the Philippines?
What specific financial and operational requirements must foreign retailers meet to operate in the Philippines?
Foreign retailers need a net worth of either US$200 million or $50 million, depending on their classification. They also require five operating retail branches globally, unless they own one store worth $25 million, plus a five-year track record.
Q.Which company manages Ikea's operations in Hong Kong, Indonesia, and Taiwan?
Which company manages Ikea's operations in Hong Kong, Indonesia, and Taiwan?
A subsidiary of Hong Kong-headquartered Dairy Farm International manages Ikea in Hong Kong, Indonesia, and Taiwan. Dairy Farm International also operates the Guardian health and beauty shops and pharmacies.
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