Korean furniture makers finally met the truth of IKEA’s longtime-wearied arrival on their turf

2013-08-01 18:50

IKEA alert: Korean furniture firms brace for dark future

By Ko Dong-hwan
Korean furniture makers finally met the truth of IKEA’s longtime-wearied arrival on their turf. On Aug. 1, Gwangmyeong City approved of an IKEA store construction work on a site of 25,759 square meters located within the KTX Gwangmyeong railway station sphere, which will be completed by late 2014. Korea’s few major furniture companies like Hanssem and Livart responded rather unstirred by the news. As to IKEA’s signature advantage over rival stores _ affordable prices _ they said they will counter with differentiated quality, design, service and wide distribution networks. “Since IKEA’s coming has been confirmed, there is nothing else for us to do but to do our best. We have had two years of preparation since the news of IKEA’s coming to Korea had surfaced.” But for small-to-medium-sized furniture companies, the news totally wrested their hearts. Unlike the major companies, these minor firms _ mostly run by family members or few part time workers _ have few selling points except cheap prices. Lee Sang-bong, president of the Gwangmyeong Furniture Distribution Business Cooperative, said, “For small furniture firms, competing against a global enterprise like IKEA is futile. We might as well hit the road before trying.” Those who are on the same page with Lee have founded a task force that bashes the arrival of IKEA in Gwangmyeong. Their message, targeted at both Gwangmyeong city and IKEA, is to provide mutual measures that don’t kill but instead embrace the small-to-medium-sized companies.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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