IKEA reveals big plans for Philippines

MANILA, Philippines — Swedish home furnishing giant IKEA has lined up “big” plans for the Philippines, including putting up the world’s biggest IKEA store for its maiden branch in the country.

IKEA Southeast Asia market development manager Georg Platzer said four to six stores of different formats are being eyed to be constructed and opened in the Philippines over the next five to 10 years through franchise holder Ikano Group.

The first store, which will open within the next three years, will be located in Metro Manila and is planned to be bigger than the IKEA store in Korea, currently its largest globally spanning about 60,000 square meters.

“The Philippines is a big country, it has many people so we are expecting a lot of visits. We’re planning for a very big store. The biggest store so far is in Seoul, we want it to be bigger,” Platzer said.

Platzer said the Ikano Group is still finalizing the location for the first store, with SM’s Mall of Asia in Pasay among those being considered.

“We are negotiating with all major players in the Philippines, we are not giving exclusivity. We are negotiating, but it is not yet signed and finally decided,” he said.

“SM is holding probably the biggest and best commercial areas in the Philippines and also in Southeast Asia, I can say. Mall of Asia is a super commercial area. SM has all the ability to bring a lot of people to certain spots, but that also applies to Ayala Malls and Robinsons. We want to be where the people are and where people know about and visit, and SM is one of them,” Platzer said.

The first store is expected to generate about 500 direct jobs,  Platzer said.

The other future stores  may come in smaller formats and may rise in provincial cities.

“The bigger growing provincial capitals of course like Cebu is definitely on our map in the long run. In Mindanao, Davao and maybe Cagayan de Oro also. For smaller store formats we can go to the provinces like Iloilo, San Fernando, and Baguio,” Platzer said.

Platzer said IKEA sees a lot of growth potential for business in the Philippines which is why the global home furnishing giant decided to enter the country.

“The Philippines with a population right now of 105 million people is a perfect place for us to grow our business to reach more people.  We take note of Philippines’ average GDP growth of 6.5 percent, 70 percent of this comes from construction and we are a retailer,” Platzer said.

“In addition, we also learned that in the Philippines you live on rather small space, about 30 square meters on the average. And its around 4.5 people per household sharing this 30 square meters. You should know IKEA is an expert in furnishing small spaces,” he added.

Ikea has 420 stores worldwide, with production facilities in around 44 countries, including Vietnam, where majority of the products to be sold in the Philippines will be sourced,  Platzer said.