IKEA to keep prices low in Korea

By Korea Herald
  • Published : Mar 13, 2014 - 20:46
  • Updated : Mar 13, 2014 - 20:46
IKEA Korea’s marketing manager said Wednesday that the Swedish furniture brand would keep to its affordable pricing policy in Korea.

The comments are expected to relieve the anxiety that had been building over whether IKEA would inflate the prices of its products here, as many other foreign brands do.

IKEA Korea will open its first store in Gwangmyeong, just south of Seoul, in November. Its first Korean outlet, on a site about 10 times the size of a football field, will sell more than 10,000 items, including household goods and food.

The second outlet will open in Goyang, Gyeonggi Province, though the timing has yet to be fixed.

“We are sticking with our global strategy that the price of products should be affordable for everyone,” Ulf Smedburg, country marketing manager of IKEA Korea, said on Wednesday at the company’s “Hej Home” showroom event in southern Seoul. But he did not elaborate on whether the prices would match those in the U.S. or Europe.
Ulf Smedburg, country marketing manager of IKEA Korea. (IKEA Korea)

IKEA’s pricing policy is drawing keen attention as importers tend to mark up prices, relying on brand image and customer loyalty. Global fashion giants such as Zara, Gap and others have been criticized for charging far more in Korea than elsewhere.

At the same time, budget furniture retailers are concerned about the competition IKEA Korea will pose.

Industry watchers said the Swedish furniture and appliance retail giant would dominate the industry by attracting young customers who have already gotten to know the brand from overseas trips or international delivery.

Famous for its simple, colorful designs, IKEA grossed $42 billion in sales last year across 345 stores in 42 countries.

Meanwhile, IKEA’s showroom will be held through March 30. It includes a recreation of the ideal “IKEA home,” composed of a colorful living room, a cozy home office, an ethereal bedroom and a cafe-kitchen.

The space is filled with products, ranging from geometric patterned cushions, white cotton pillows and fabric sofas ― with machine-washable covers ― to simple kitchen appliances.

The price tags read, “The price is lower than you think.”

“We thought this could be a time when IKEA reaches out to the press and Koreans and listen to their questions,” Smedburge said. He explained that the Gwangmyeong store would sell the same goods as every store worldwide, but that Korean lifestyle traditions such as sitting on the floor would be taken into account.

“We are still in the learning stage,” he said.

IKEA has invested 6 billion won ($5.6 million) in the Gwangmyeong store to construct a geometric power generation system, and will also use solar power.

“We are trying to become the most environmentally friendly, sustainable and responsible company here,” said Lee Da-rai of the marketing division.

By Bae Ji-sook (