Ikea to expand on Eastern front
Furniture giant plans new Russian stores and Japanese entry
November 24 2003
Ikea aims to operate 22 stores in Russia in 15 years, with the Swedish furniture retailer predicting Russia will become its second biggest global market.
The retailer also plans to move into the Japanese market in the next two years.
Ikea’s German operation, Ikea Deutschland, is the parent company of the Russian arm and will fund development of Ikea stores in Russia. The investment is expected to amount to several billion US dollars, based on the $250m-plus cost of the store development in Khimky, near Moscow, due to be completed by December 2004.
Ikea already has two stores in Moscow, and a store in St. Petersburg is scheduled to be open next month.
Ikea’s expansion in Russia has met with opposition from local furniture producers, who have argued their share of the market has declined by since import tariffs were cut by 60 per cent in 1999.
However, Russian consumers have proven as receptive as their western European counterparts to Ikea’s offer. Ikea expects Russia to become its largest market after Germany.
Meanwhile. Ander Dahlvig, chief executive of Ikea, has told the Financial Times newsaper the retailer will open a store in Tokyo in late 2005, and a second the following year.
Dahlvig said the potential for Ikea in Japan is huge, with the country equal in purchasing power to Germany, France and the UK combined. Initial plans call for up to six stores in the Tokyo area and a similar number in Osaka.
