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IKEA to open first Seoul store in 2017
Publication Date : 07-01-2014
Swedish furniture and appliance retailer IKEA is set to open a store in eastern Seoul as early as 2017, sources said on Monday, adding to two stores already planned in Gyeonggi Province.
The news of the first Seoul branch is expected to deepen the anxiety of domestic furniture makers, those close to the issue said.
IKEA has agreed to sign a memorandum of understanding with the district of Gangdong-gu this year to allow the world’s largest furniture retailer to open a 13,000-square-metre store inside the Godeok commercial complex in eastern Seoul.
The opening is slated for sometime in 2017. Details are still pending.
“We are still in talks about all possibilities. We cannot confirm any details but are hoping the deal will offer more opportunities for Godeok,” a district official told The Korea Herald.
Hosting IKEA, a company that created 38.8 trillion won (US$36.6 billion) in revenue worldwide in 2012, is likely to attract more visitors and businessmen into the commercial complex, which aims to become a high-value-added information and knowledge technology cluster, according to insiders.
IKEA, established in 1943, saw 690 million customers in 28 countries in 2012.
The retail giant was reportedly drawn to the Godeok complex for its proximity to the Olympic Highway, the Express Ringway and Jungbu Expressway. The site will also have a connection to Subway Line 9 by the time of the opening. The cheaper rent compared to the city center or the affluent parts of southern Seoul was also an attraction, insiders said.
The Godeok store will be the third IKEA store to open in Korea. The first will be in Gwangmyeong, Gyeonggi Province, scheduled to open in November, and the second in Goyang, northern Gyeonggi Province.
The Swedish retailer has reportedly been interested in advancing into the Korean market for about a decade. Though it has never had an official store here, IKEA goods are popular among people who have used the products overseas and purchase them online.
The local domestic furniture industry appeared to be nervous about IKEA’s entry.
Local vendors in Gwangmyeong have requested the Gyeonggi Provincial Council to assess the possible damage the global giant will bring to the local market.
“The 131,000-square-metre store will be the largest in Asia, and will pose a huge blow to not only the furniture industry but also supermarkets, traditional markets and others,” they claimed in the petition.
The Seoul Metropolitan Government is reportedly taking its time on the approval of IKEA Godeok project for the same reason, but has ostensibly cited other administrative matters.
Some Korean companies have moved swiftly for countermeasures.
Hanssaem, the domestic market leader, opened a 1,200-square-metre store close to IKEA’s Gwangmyeong site in October. The store sells furniture, kitchen supplies and other items, similar to the IKEA concept. It expects the two stores could create synergy, attracting more furniture shoppers to the neighborhood.
Livart, another major market player, said it has come up with plans to enhance product quality to counter IKEA, which focuses on low prices.