Ikea plans to expand to dozen new markets in coming years
Ikea plans to expand to about a dozen new markets in the coming years, including branching into South America, as the Swedish furniture giant aims to reach a total of three billion potential customers by 2025.
The company will in the coming years open stores in Chile, Colombia and Peru through a new Ikea franchisee called Falabella as part of its first foray into South America, Inter Ikea said in an emailed statement on Wednesday.
Inter Ikea, which owns the Ikea concept and is the worldwide franchisor, also said the company plans to start selling its products in Mexico, Estonia, Ukraine, Puerto Rico, Oman, Luxembourg, Macau and the Philippines.
“By 2025, we have the potential to reach and interact with 3 billion people,” Inter Ikea chief executive officer Torbjorn Loof said in the statement. “We will offer new and different ways to shop the Ikea product range — online, in remote locations and in city centers. We will introduce smaller store formats and offer a wide range of flexible and affordable services.”
Ikea is in the midst of a transformation where it’s shifting resources toward emerging markets and alternative shopping experiences such as e-commerce and city centre stores to better cater to customers’ changing needs.
The new expansion plans were laid out as Inter Ikea reported a 4.5 per cent increase in retail sales in the 12 months through August, adjusted for currency impact, at the franchisees that operate its more than 400 stores across the world.
Total retail sales, which include sales of both products and services, rose to 38.8 billion euros from 38.3 billion euros a year earlier.
In its last fiscal year, India and Latvia became new Ikea markets as the company opened 19 new stores around the world. In its fiscal year 2019, which runs through August, a total of 15 retail locations are planned. That includes a new store that was opened in Bahrain in September, Inter Ikea said.
Ikea’s foray into South America will see the company open nine stores and expand online in Chile, Colombia and Peru, through the Falabella franchise, in the coming decade.
“We’re very excited to open in South America,” Loof said in a phone interview. “It will be a faster and bigger expansion than when we’ve entered new markets before.”