Ikea eyes further growth in region

Corporate January 03, 2019 01:00

By The Nation

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Ikea Southeast Asia will launch an e-commerce operation in Thailand to meet the needs of a new generation of shoppers, as well as moving forward to redefine its retail business, and make the home-furnishings retailer “a place of happiness for all”, according to a media release yesterday.



Ikea also announced a five-year plan to expand into new markets in the Philippines, Vietnam and Mexico.

According to its newly released 2018 annual report, as technology and urbanisation change customers’ expectations and the way people shop, the business has to transform to meet the new generation of shoppers. That generation tends to spend a lot of time on their mobile devices and look for emotional connections with the brands they love. 

Customers’ interest in home furnishing has grown stronger, focusing largely on beautiful designs and functionality. 

Ikea Southeast Asia, owns and operates stores in Singapore, Malaysia and Thailand. In 2018, the seven Ikea stores in the region received excellent feedback, attracting 85 million visits, a 20 per cent increase from 2017, the report notes. 

The total turnover topped Bt25.2 billion for the first time, while the total number of Ikea Family members reached 1.71 million.

Ikea says its success in the past year is the result of its continuous efforts to offer new experiences and inspiration to customers. For example: 

    Opening the first Ikea store to be fully integrated into a shopping centre in Thailand;

    Expanding e-commerce operations throughout all of Malaysia, and accounting for 3.8 per cent of total sales in less than three months; 

    Improving customers’ experience through its customer contact centre.

Ikea Southeast Asia’s operational plans for the next five years are to:

    Launch an e-commerce business in Thailand this year;

    Begin building the first Ikea store in the Philippines in the heart of Manila, occupying around 65,000 square metres – the world’s largest Ikea.

The company also has ambitious plan to enter the Philippines, Vietnam and Mexico to bring its offerings to six countries with a combined population of 480 million (Singapore, Malaysia, Thailand, the Philippines, Vietnam and Mexico).

On the sustainable development front, last year, Ikea introduced solar cooling at Ikea Alexandra in Singapore that reduced its energy consumption by 24 per cent. They also announced a plan to eliminate single-use plastics from Ikea stores by 2020.

True Group offers unsecured debentures

In late January 2019, True Group will offer unsubordinated and unsecured debentures with debenture holders’ representative No 1/2019. 

The debentures of True Corporation or True, with tenor of three years, and a fixed coupon rate of 4.00-4.15 per cent per annum, will be offered to general investors and institutional investors. 

The debentures of True Move H Universal Communication Co Ltd or TUC, with tenors of two years and five years, a fixed coupon rate of 3.60-3.80 per cent per annum and 5.00-5.15 per cent per annum respectively will be offered to high-net-worth investors and/or institutional investors. 

Both True and TUC’s debentures will offer quarterly coupon payments with the minimum subscription of Bt100,000 and multiples of Bt100,000. The debentures of True and TUC have been assigned “BBB+” rating with a “stable” outlook by Tris Rating. 

Bangkok Bank, Krung Thai, Kasikornbank, Siam Commercial Bank and CIMB Thai Bank are the joint lead arrangers for the debenture issuance. The Bank of Ayudhya has been appointed as the debenture holders’ representative. Proceeds from these debentures issuance will be used for refinancing debts, working capital requirements and/or business expansion.

William Harris, group chief financial officer, True Corporation Plc, said that these debentures are in the filing process with the Securities Exchange Commission (SEC) and the group expects the SEC to announce the filing effective date by mid-January. 

    The Debenture of True Corporation Public Co Ltd No 1/2019 is an unsubordinated and unsecured three-year debenture maturing in 2023 with debenture holders’ representative. The debentures offer a fixed coupon rate of 4.00-4.15 per cent per annum with quarterly coupon payments. The minimum subscription amount is Bt100,000 and multiples of Bt100,000. TRUE’s debentures will be offered to general investors and institutional investors. The subscription period is expected to run from January 28-30. 2019.

    The Debenture of True Move H Universal Co Ltd No 1/2019 is unsubordinated and unsecured debentures with debenture holders’ representative. TUC’s debenture tranche 1 is the two-year debenture with a fixed coupon rate of 3.60-3.80 per cent per annum maturing in 2022. TUC’s debenture tranche 2 is the five-year debenture with a fixed coupon rate of 5.00-5.15 per cent per annum maturing in 2024. The coupon payment frequency is on a quarterly basis. The minimum subscription amount is Bt100,000 and multiples of Bt100,000. TUC’s debentures will be offered to high-net-worth investors and institutional investors. The subscription period is expected to run from January 21-23, 2019.