Tuesday, February 22, 2011

IKEA Korea

A couple of months ago, IKEA officials confirmed that South Korea was on their roadmap, but in the medium to long term (after Eastern Europe priorities). The Swedish company is already operating in the region (China, Hong Kong, Japan, and Taiwan), and of course, the Korea-Europe FTA could accelerate decisions for the Swedish retailer.

Meanwhile, some of its products are already on sale here, mainly items purchased in Chinese IKEA shops and shipped by resellers.

An unofficial store is even selling goods online and offline from Gyeonggi-do : DIY Korea shamelessly uses the ikeakorea.or.kr URL, which is not only mentioning the brand, but also under a theoretically non commercial or.kr domain.

Competitors seem to be bracing for the inevitable arrival of IKEA : Hanssem has considerably improved its marketing, merchandising, and logistics skills, and such retailers as CASA Korea contributed to the westernization of Korean interiors.

If the Korean market is not mature enough for the category killer, that's changing and quickly. New and fully equipped apartment complexes are losing ground to remodeling operations and more individual initiatives. And if it's still hard to compete with small 'gagu' manufacturers who can build and install custom furnitures at a very low price, DIY or gardening are on the rise (including at Tesco's and Costco's, who also seem to be leveraging on the growing expat communities and individual entrepreneurs to extend their DIY / gardening sections).

As always, when a major franchise reaches Korean shores, there's a mixed feeling, and the hope that, in spite of the loss, creativity will be spurred.

Seoul Village 2011

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