Swedish furniture giant Ikea is looking to expand further in Asia in the coming year, according to CEO Mikael Ohlsson, who added that the company’s sales continue to climb.
“We had a very good year (in 2009/10) considering the sluggish environment. More and more people, when economy is tough, still want to refresh their homes,” Ohlsson told the Reuters news agency.
He added that figures for the year would be available soon. In 2008/09, Ikea’s sales grew by 1.4 percent to €21.5 billion ($28.2 billion).
South Korea is high on Ikea’s list of countries targeted for expansion, with Ohlsson also mentioning Japan and China, where the do-it-yourself furniture maker hopes to open four new stores in the next two years.
“What we are doing now is looking actively in (South) Korea and when we find good locations and good possibilities we will open in Korea,” he said, adding that he expects an Ikea store to open in South Korea within five to seven years.
He also hoped Ikea could enter India, but emphasized expansion there wouldn’t happen until after India scrapped restrictions.
“When it’s right we will open and hopefully we will have many stores,” Ohlsson said.
Ohlsson went on to explain that Ikea aimed to double the value of goods it sources from India as it pitched for New Delhi to open up the nation’s huge retail market to foreigners.
Ikea sources €500 million ($655 million) in textiles and other goods from India and plans to boost that figure to one billion euros “within three to four years,” chief executive Mikael Ohlsson toldAFP.
Ikea, which shelved plans to enter India’s retail segment in 2009 because the country restricts foreign ownership of single-brand retailers to 51 percent, is still keen to open stores in the country, Ohlsson added.
India’s tight investment rules restrict overseas companies to “back-end” wholesaling — except for single-brand outlets such as Nokia or Reebok — to protect local, family-run stores which fear being driven out of business.
Ohlsson, in India on a trip to inspect the company’s €125-million South Asia development programme helping children and women, urged the government to relax regulations, saying there was “room for all players.”
“We believe we can create employment — jobs in cities and outside cities, we can be part of transforming industry,” he said in an interview in New Delhi.
Ikea believes it can replicate in India its success in China and Russia, Ohlsson said.
Ohlsson met with Commerce Minister Anand Sharma during his visit to press for changes in the country’s retail legislation.
“We had a good open debate about possible change,” he said.
Ikea sees huge potential in India’s burgeoning middle class whose “wallet is still thin” but wants “good furniture at a good price,” Ohlsson said.
Ikea is one of a slew of international retailers that include France’s Carrefour and Wal-Mart of the United States pushing the Indian government to open up its retail sector to serve consumers in the fast-growing economy.