IKEA to open five more stores in S. Korea by 2020

Swedish furniture giant IKEA said Wednesday it will invest 1.2 trillion won ($1.01 billion) to build five more stores in South Korea by 2020, buoyed by the success in its inaugural store in suburban Seoul.

IKEA opened its largest store in the world in Gwangmyeong, just southwest of Seoul, posting 308 billion in sale since its launch a year ago.

About 6.7 million visitors have passed through the doors at the store, located less than an hour’s drive or 14 minutes by bullet train from central Seoul, it said.

IKEA said its expansion plan is designed to target design-savvy Korean consumers living in the highly urbanized country.

“Korea is a great market with huge potential, with a growing customer interest in home furnishing,” Adre Schmidtgall, country retail manager at IKEA Korea, said at a press conference.

It plans to open five more stores in the next five years, with four in Seoul and its surrounding area, and two in the central and southern region. The second store is scheduled to open in Paju, north of Seoul, in 2017.

The Swedish firm’s net profit rose over 5 percent to 3.5 billion euro ($3.84 billion) in fiscal 2015, helped by better-than-expected sales in South Korea and record sales growth in Germany.

The uniqueness of the concept, including a light Scandinavian furnishing style, showrooms, flat-pack and self-assembly, gave IKEA a competitive edge over traditional furniture shops.

Its two-story building spanning 59,000 square meters, nearly 10 times larger than a soccer field, presents about 8,600 products and 65 showrooms. It has a child-care area and a cafeteria featuring Swedish meatballs and cinnamon as well as a localized menu with kimchi salmon rice.

There has been some criticism that the store’s pricing is higher than other advanced nations including Germany, Japan and the U.S., but this has failed to discourage customers from visiting the new concept store.

A map product labeling the East Sea as the Sea of Japan also sparked backlash amid fraying ties between Seoul and Tokyo, prompting the former country manager to apologize for the incident.


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