IKEA is present in over 40 countries according to their website but not Korea. Why? I mean Korea is part of the G20 (remember Seoul hosted back in November), so surely the world's largest furniture retailer would want to open up a store or maybe even five...!
The market research suggests that IKEA has 90% brand recognition in Korea in the 20-40yrs age bracket according to the Brand Design Association of Korea. This would seem like a very attractive prospect for any company where the total market size is 5 trillion Korean Won (approx. $5 billion).
We come back to the concentration of the Korean economy (as discussed in earlier post) where 12 major manufacturers make up over 50% of the total furniture production in Korea. Clearly foreign corporations whilst seeing Korea as a lucrative potential market are cognisant that 'the timing must right'.
The case of Wal-Mart coming to Korea, managing to open 16 stores over several years and then failing is well known. They tried to take on the incumbents in their core market, the domestic hyper-markets (primarily Lotte Mart and E-Mart) closed rank and set out on a price war to successfully conquer Wal-Mart. Few countries can claim immunity from Wal-Mart's global reach.
But in the meantime before IKEA arrives, because the company has said they will enter within the next 3-5 years, their exists a quaint market of IKEA copy shops. Apparently there are over 200 registered companies in Korea who are in the business of importing IKEA furniture (mostly from China) and selling it on. Some even arrange their stores like mini-IKEAs, with the same fixtures and fittings. I will be watching closely to see how IKEA enters the Korean market and whether for the very first time in their history they adapt their model to the local conditions.
I personally am a fan of IKEA - so bring the Billy Bookcase to Korea!
The market research suggests that IKEA has 90% brand recognition in Korea in the 20-40yrs age bracket according to the Brand Design Association of Korea. This would seem like a very attractive prospect for any company where the total market size is 5 trillion Korean Won (approx. $5 billion).
We come back to the concentration of the Korean economy (as discussed in earlier post) where 12 major manufacturers make up over 50% of the total furniture production in Korea. Clearly foreign corporations whilst seeing Korea as a lucrative potential market are cognisant that 'the timing must right'.
The case of Wal-Mart coming to Korea, managing to open 16 stores over several years and then failing is well known. They tried to take on the incumbents in their core market, the domestic hyper-markets (primarily Lotte Mart and E-Mart) closed rank and set out on a price war to successfully conquer Wal-Mart. Few countries can claim immunity from Wal-Mart's global reach.
But in the meantime before IKEA arrives, because the company has said they will enter within the next 3-5 years, their exists a quaint market of IKEA copy shops. Apparently there are over 200 registered companies in Korea who are in the business of importing IKEA furniture (mostly from China) and selling it on. Some even arrange their stores like mini-IKEAs, with the same fixtures and fittings. I will be watching closely to see how IKEA enters the Korean market and whether for the very first time in their history they adapt their model to the local conditions.
I personally am a fan of IKEA - so bring the Billy Bookcase to Korea!
