Ikea to ramp up SEA expansion
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Swedish furniture and homewares retailer Ikea wants to ramp up its Southeast Asian store rollout.
The next two markets in its sights are the Philippines and Vietnam.
But in some key markets, finding suitable locations for its large format stores is proving a challenge, especially in Vietnam where it wants to launch in Ho Chi Minh City, the country’s commercial capital with a catchment of 8 million consumers.
Speaking to The Nation newspaper after opening its first pickup point (PUP) in the Thai resort city of Phuket, Mike King, retail manager of Ikea Singapore, Malaysia and Thailand, said the company wants to have three large format stores in Bangkok and five or six PUPs in Thailand within five years.
In July, the company announced it had located site for its second Bangkok store – adjacent to the new CentralPlaza Westgate shopping mall under construction in Bangyai, in Nonthaburi province in Bangkok’s west. Another site has been earmarked in the city’s north, near the recently expandedFuture Park Rangsit shopping centre.
Ikea is already actively seeking local partners in Vietnam and the Philippines. Typically when Ikea enters a new market, it locates its initial stores in the most populated cities – for example in Indonesia where it has a joint venture with Hong Kong’s Dairy Farm International, it has opened its first store in Jakarta, and in Malaysia it has two in greater Kuala Lumpur. In the Philippines it will focus on Manila with a population catchment of about 24 million.
“The two new branches [in Ho Chi Minh City and Manila] will possibly be erected within five years,” King told The Nation.
Ikea plans to open at least one store a year in Southeast Asia from now on – typically about 40,00 sqm in size.
Meanwhile, the 2651 sqm Phuket PUP is expected to increase the Bangkok store’s sales by 10 per cent annually. Customers can order online, or in the store and have the products shipped to the PUP for collection.
It is the first PUP store in Asia, although others operate in Spain, the UAE, Turkey, Norway, Finland and Greece, among other places.
Questions & Answers
Q.Which specific cities in the Philippines and Vietnam are Ikea targeting for its initial large format stores?
Which specific cities in the Philippines and Vietnam are Ikea targeting for its initial large format stores?
Ikea plans to focus on Manila in the Philippines, which has a population catchment of about 24 million. In Vietnam, it aims to launch in Ho Chi Minh City, the country’s commercial capital with an 8 million consumer catchment.
Q.What challenge is Ikea facing when trying to expand its large format stores in some key markets?
What challenge is Ikea facing when trying to expand its large format stores in some key markets?
Finding suitable locations for its large format stores is proving a challenge in some key markets. This is particularly difficult in Vietnam, where it wants to launch in Ho Chi Minh City.
Q.How many large format stores and pickup points does Ikea aim to have in Thailand within the next five years?
How many large format stores and pickup points does Ikea aim to have in Thailand within the next five years?
Within five years, Ikea aims to have three large format stores in Bangkok and five or six pickup points in Thailand. One new Bangkok site is adjacent to CentralPlaza Westgate, and another is near Future Park Rangsit.
Q.What is the expected impact of the new Phuket pickup point on the sales of the Bangkok store?
What is the expected impact of the new Phuket pickup point on the sales of the Bangkok store?
The new 2651 sqm Phuket pickup point is expected to increase the Bangkok store’s sales by 10 per cent annually. Customers can order online or in-store for collection there.