‘IKEA won’t vie with Starfield Goyang’
IKEA Korea chief refutes Shinsegae CEO’s remarks
IKEA Korea’s chief has dismissed market observers’ expectation that its Goyang store, which will open in northwest of Seoul, Oct. 19, will compete directly with Shinsegae’s Starfield Goyang that began operation last week.
“Starfield has a completely different concept and format than IKEA,” Andre Schmidtgall, country retail manager at IKEA Korea, said in a press conference at an IKEA pop-up store in Seoul, Tuesday.
“We are selling our own goods from our suppliers and I assume that Starfield has a different concept of a shopping mall. In general, I always welcome businesses creating more consumption and everyone who is interested in home furnishing.”
Since Shinsegae Vice Chairman Chung Yong-jin mentioned IKEA, observers have expected a fierce competition between the Korean retail giant and the Swedish home furnishing company.
“I think IKEA should also be sub- ject to the government’s regulation demanding large shopping malls close twice a month,” Chung told reporters last week at the grand opening ceremony of Starfield Goyang.
For the sake of small local retailers, the left-leaning Moon Jae-in administration has pushed ahead with further regulations on conglomerates specializing in retail, such as Lotte and Shinsegae. IKEA has recently come under fire over its first store in Gwangmyeong, Gyeonggi Province, being exempt from the regulation.
Schmidtgall avoided commenting on the regulation and public sentiments.
“We’re following all rules and regulations, but it’s really difficult to comment on an uncertain regulation,” he said. “From a customer perspective, we want to be there when our customers want to be with us.”
The local manager also emphasized IKEA Korea’s attempts to coexist with nearby sellers, saying that sales of stores in a 10-kilometer radius of IKEA’s Gwangmyeong store have increased in terms of the amount of credit card use.
Promising to become a “good neighbor,” Schmidtgall said the Goyang store has already hired 550 workers at a job fair in April.
He also said IKEA Korea will cooperate with any Korean retailers sharing the same values.
Both its Gwangmyeong store and the upcoming Goyang store are located near Lotte outlets, and this has been regarded as the Swedish company’s strategy to create synergy.
However, Schmidtgall denied the alleged strategic alliance with Lotte, although the retail giant has been helpful.
During the press conference, IKEA Korea also disclosed its business performance from September 2016 to August 2017. The Korean branch recorded 365 billion won ($324 million) in sales, up 6 percent from a year earlier.
It refused to unveil the operating profit.
IKEA Korea plans to launch six stores here by the end of 2020, but the location and exact schedule for the third store has yet to be ascertained, according to the country manager.
Meanwhile, IKEA Korea also announced the new theme of this year, “Express yourself, My living room, My way.”
“With the new theme, we hope to inspire Korean consumers to redefine their living rooms and be bold in expressing themselves in the living room,” IKEA Korea marketing manager Nicolas Johnsson said.