SEOUL, KOREA- IKEA, the world's largest seller of ready-to-assemble furniture and home accessories, has been given an approval to open Korea's first store in Gwangmyeong in the south of Seoul. The Swedish company will set out to build the store and open it by the end of 2014. As the US$36-billion behemoth moves into the market, Korea's furniture retailers are already fretting that they would soon be wiped out by the super-efficient retailer.
IKEA's Gwangmyeong location near the KTX station will be built in a 78,198-square-meter site with a total floor area of 25,759 square meters. Established in 1943 by a 17-year-old Ingvar Kamprad who is now one of the richest people in the world, IKEA has today 338 stores across 40 countries worldwide. By targeting young families based on the strength of low prices and smart design, the company has grown into the world's largest furniture seller.
Major homegrown furniture brands such as Hansaem and Livart are saying they would respond to the attack of IKEA with a differentiation strategy, including the reliance on online sale. Still, there is little defense against the low-cost retailer whose average selling price is 20 to 30 percent lower than Korean competitors.
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