Swedish furniture giant IKEA is planning to penetrate into Southeast Asian and South America countries, including Vietnam, with an ambition of dominating the world’s furniture market.
In Southeast Asia, the group plans to come to Vietnam and the Philippines, expanding on its existing store networks in Thailand, Singapore, and Malaysia. Vietnam will be the destination that IKEA is aiming for in its development plans in the near future, according to CEO Mr. Torbjorn Loof.
Under the plan, IKEA will open its first store in these markets within the next five years. This year it wants to open 22 new stores, with 25 to open every year in the future.
The group’s retail sales, including franchise and customer services, were estimated at $45 billion in its most recent fiscal year. Mr. Loof added that this year’s sales growth is lower than last year but is expected to increase to 8-9 per cent per year in the years to come.
The company is seeking growth momentum after recently focusing solely on expansion in China and Russia. It currently has more than 400 stores in 49 markets across Europe, North America, the Middle East, Asia, and Australia.
Although it has no outlets in Vietnam, IKEA products are still of interest to Vietnamese families through portable channels. Many Vietnamese enterprises are also outsourcing partners of the company.
Vietnam is an ideal destination for foreign furniture makers, especially those from China. More Chinese businesses have set up wooden furniture processing factories in the country in order to take advantage of preferential tariffs importers are offering to Vietnamese exports.
According to the Vietnam Timber and Forest Products Association (Vifores), one-third of the 500 foreign-invested wooden furniture enterprises in Vietnam are from China and Taiwan.
Vietnam is also one of the largest wood exporters in the region. Wood export turnover can reach the targeted $8 billion this year, Mr. Nguyen Ton Quyen, Secretary General of Vifores, has insisted.
Wood and wooden product export turnover stood at $3.57 billion in the first six months of this year, up 13.6 per cent compared to the $3.14 billion recorded in the first half of 2016. Export turnover came in at $700 million each month on average during the first nine months.
Photo: IKEA Vietnam