Looming IKEA’s entry into S. Korea reshapes furniture market
March 17, 2014 Leave a comment
Looming IKEA’s entry into S. Korea reshapes furniture market
2014.03.13 17:47:47
Global furniture behemoth IKEA will be entering South Korea eight months later. IKEA is preparing to make foray into the Korean market by offering up to 50 percent lower prices based on flat-pack, do-it-yourself (DIY) furniture, a set of separated pieces of furniture for easier mobility, and independent production and distribution network.
The domestic furniture market has already seen the start of ‘big bang.’ The imminent IKEA’s entry is reshaping purchasing trends in furniture. So far, consumers bought furniture to back up built-in furniture installed at apartments provided in business-to-business (B2B) deals. But in recent trend, the business-to-consumer (B2C) market is rapidly growing, where consumers find furniture for living rooms, bedrooms and kitchen befitting their tastes.
Consumer groups are polarizing, too. “Consumers are grouping into those who are looking for low-priced models offered by companies like IKEA and those who want the existing high-end models,” said Yoon Jong-ho, chief of Sealy Korea.
Korean companies are striving to adapt to changes. Large companies such as Hanssem and Livart Furniture have opened a number of directly operated stores and big dealerships at key commercial areas of downtown in Seoul and Busan since the second half of last year to brace for IKEA.
But concerns are rising over local smaller furniture businesses, which take up 70 percent of the domestic market and are unprepared for the IKEA’s expansion with low-priced products.
“IKEA is coming to Korea, while existing furniture companies have secured large stores, putting about 300 small furniture companies at risk of bankruptcy,” said Gang Jum-hee, head of furniture cooperative in Goyang.
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