Is Ikea coming to PH?

Aya Lowe
A franchisee of Swedish furniture giant Ikea plans to open 3 shops in Manila, but needs big spaces to put up the stores

COMING SOON? The Asian franchisee of this global furniture giant is keen on opening stores in the Philippines. Photo by AFP

MANILA, Philippines – Is Swedish furniture giant Ikea coming to the Philippines? 

Very likely, according to Christian Rojkjaer, managing director for Ikano Retail Asia, an Ikea franchisee in the region.  

“I think we could open 3 stores here tomorrow. The market is very ready for it,” said Rojkjaer at the investment briefing for a Swedish delegation at the Department of Trade and Industry (DTI) on Wednesday, February 20.

“What I see is a population with families that like their homes. That’s what we’re selling,” he added.

Rojkjaer said Filipinos will get to enjoy the full range of Ikea products as soon as their application with the Swedish firm for franchising rights of the brand for the Philippine market is approved.

Ikano is waiting to hear back from Ikea so it could include the Philippines in its Asian portfolio.  

Ikano is one of 12 Ikea franchisees worldwide. In Southeast Asia, they were already granted franchising rights for Singapore, Malaysia and Thailand markets.

Furniture market

The Philippine furniture industry is already very competitive. Furniture products helped drive total exports 6.97% higher to $48.03 billion from January to November, 2012. 

Prices of Philippine-made furniture products have been comparative to China where inflation is rising, the trade department said. 

The local market is ready for a new player, noted Rojkjaer.

“There is a big market for us here and we welcome competition here. I think we will make a lot of the suppliers here even better by competing with us,” said Rojkjaer.

“What we’re seeing in other countries where Ikea goes in is that the supply base grows drastically. I think that’s an unknown opportunity. Once there is an Ikea store in the country, the supplier will sample our product and offer better or improved designs.”

When asked if local furniture makers can be given shelf space in Ikea stores in the Philippines, Rojkjaer replied, “We will of course welcome local sourcing of the company.”

Rojkjaer cited Thailand as an example. Since their entrance into the Asian country a year ago, the Thailand-based production went up considerably. “It’s been a very good start, it beat all our expectations,” said Rojkjaer.

“We have so much to do in the country we are in. If we are lucky to get the franchise rights in the Philippines, we have a lot to do here,” said Rojkjaer.

Manila and beyond

The plan is to open 3 shops in Manila. From there they will look at moving outside of the capital.

“We have a very rigid and structured assessment process as to where to put stores because they are so big — 40,000 square-meter stores. We need the volume. Without it Ikea can’t work,” he said. 

Rojkjaer hopes to fill a gap in the furniture market by offering small space furniture solutions through complete furniture sets.

Import duties, value added taxes, and more will determine the price ladder.

Ikano was originaly part of the home furnishing company IKEA. During the 1970’s the Ikano’s activities evolved to managing real estae, financial serice and insurances for IKEA.

In 1988, Ikano became an independent group of companies owned by the Kamprad family. –