Swedish global home furnishing giant IKEA now ready to enter PH market

Published January 17, 2018, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

IKEA, the Swedish-based global home furnishing giant which opening of their store in the Philippines has long been an awaited event among Filipinos, said that the local market is ripe for their company and for any other retailer to enter.

Lars Svensson, Sustainability & Communication Director for IKEA Southeast Asia, told reporters at the “Fostering CSR in the Philippines: Conference on Responsible Business,” that the Philippine market is already for any retailer to do business.

“Yes, generally for retail, if I look at what has been going on and happening in Metro Manila of course, it is ripe for many players. We have H & M and that you have unique example and we have others. If it is ripe for them, it should be ripe for us,” said Svensson, who spoke on session 2 of the day-long conference on “Why Should Businesses Adopt Responsible Business.”

Svensson, however, refused to give any other details as to their plans for the Philippines except to say that they will enter the market.

“Yes, we will, we just don’t want to contribute to rumors and speculation but that will be announced when we confirm,” said Svensson, who is based in Bangkok under the Ikano (Thailand) Limited.

IKEA has already established a representative office here in Manila. According to Jasmin Ferrero-Cruz, market communications manager for Ikea Philippines,  the representative office of Ikano Private Limited, has been operating for two years already. It has a staff of 6 people, doing mostly market studies, including logistics.

Even Swedish Ambassador Herald Fries confirmed Ikea’s eventual foray in the country. It was also reported that the company has already found a place somewhere in Cavite, since an Ikea store requires a sprawling space, but this has not been officially confirmed by the company.

News of IKEA opening in the Philippines had surfaced as early as February 2013. The Swedish embassy, which was closed in 2008 just reopened on November 8, 2016.

On December 5, 2016, the Board of Investments approved the application of Ikano Pte. Ltd., formerly known as IKEA Pte. Ltd. as a foreign retailer under the country’s liberalized retail trade law. Ikano owns and operates home furnishing stores in Southeast Asia  and under the franchise rights from the Swedish firm IKEA Systems BV. The company was incorporated in 1980 and is based in Singapore.

The company was also expected to register with the Securities and Exchange Commission for its capitalization requirement.

Since the company has been mum about its foray in the country, it was hounded by various speculation as to its mode of entry, its partners and location. Teresita Sy, vice chairperson of SM Investments Corp., admitted they were just one among local retailers that IKEA had spoken to.

According to Sy, IKEA has a different model and they looked at the Philippine market differently. Sy also admitted that every local retailer was interested to partner with the popular global retailer.

SM Malls, the country’s largest chain of department stores, also has  its own “Home” store carrying various home furniture pieces and accessories. It also carries “Crate and Barrel”, an American  furniture retail brand, a major store in its select department stores.  But “Crate and Barrel” is positioned more for the upper market segment.

IKEA, which stands for Ingvar Kamprad, Elmtaryd and Agunnaryd, is owned by 90-year-old Ingvar Kamprad, who established the vanguard company in 1943 when he was 17 years old.

The furniture retailer, which is known for its affordable and ready-to-assemble furniture appliances and home accessories, has 384 branches in nearly 50 countries including  Hong Kong,  Indonesia,  India,  Japan,  Malaysia,  Singapore,  South Korea,  Taiwan  and  Thailand  in  Asia.

The IKEA website said that for over 60 years the company has been working to help create a better everyday life for the many people.

“We do it in small ways, answering needs related to life at home by creating well designed furnishing products that are attractive, functional, sustainable and affordable. That’s because we believe most people share a desire for beauty, a need for functionality and a regard for saving resources – both their own, and the planet’s,” the website said.