Ikea plans two more stores in Bangkok
Ikea, the iconic Swedish homefurnishings company, plans to invest another Bt6 billion in Thailand to open its second and third stores in western and northern Bangkok in the near future.
Both new stores, which will be opened within the next five years, are anticipated to be similar in size to the first Bangkok Ikea in Bang Na, which will have 43,000 square metres of total retail space when it opens late this year.The move is in line with the company's ambition to become the No 1 homefurnishing company in Thailand.The company yesterday announced its would open Ikea Bangna in November. The store, with about 1,300 free parking spaces, will be the largest Ikea outlet in Southeast Asia. It will employ about 400 people and reflect the same unique architectural design for which Ikea stores are known worldwide.Ikea Bangna is 100 per cent owned by Ikano. Mega Bangna, the mall it will anchor, is 49 per cent owned by Ikano and 49 per cent by Siam Future Development.In addition to Thailand, Ikea plans to open its second store in Kuala Lumpur within the next two years, while the third store will be opened at Johor Bahru, Malaysia's secondlargest city, within the next three to four years.Tom Huzell, managing director of Ikano Retail Asia, the Ikea franchisee holding licences for Ikea in Singapore, Malaysia and Thailand, said the company expected to open its second Ikea store in Bangkok within the next three years. Meanwhile, the first store is anticipated to reach annual visitor traffic of 6 million people within the same threeyear period. "We would like to be in shopping clusters and to locate with other retailers," Huzell said.He added that the Ikea experience would meet and exceed the many needs and tastes of Thai consumers when Ikea Bangna opened its doors. In the first year of operation, Ikea expects more than 4.5 million people to visit its store and its many room displays, children's play area, and 700seat restaurant serving Swedish foods.The venture aims to be profitable from the beginning by keeping costs low, said Huzell, who has been with different Ikea franchisees for 26 years.Ikea Bangna will provide a wide selection of 7,500 furnishing designs. Thirty per cent of the product range will change four times a year. The company has sourced products from 70 countries, including Thailand.Huzell said Ikea's key strengths were its low prices, good function, and good design."We offer consumers prices 1020 per cent lower than our competitors' similar basic products and up to 4050 per cent cheaper for midend to premium products," he said.Mega Bangna is on the southwestern corner of Bang NaTrat Road and Eastern Ring Road at the BangpleeSuksawat Expressway intersection. Huzell said the company would maintain low prices at Ikea Bangna to fulfil its commitment to customers. Economy of scale helps Ikea keep prices low because of its bargaining power with 316 stores in 38 countries.Ikea says it develops new products around an estimated price, and design teams set out to create functional and durable furnishings, keeping costs low with careful use of resources.
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