SWEDISH furniture retailer IKEA is looking to establish more stores in the Philippines to address growing local demand and as part of its expansion efforts.
Georg Platzer, IKEA Philippines store manager, said that the retailer is studying more stores in Metro Manila in addition to its first branch in the country. IKEA Philippines opened the doors to its Pasay City store on Nov. 25 last year.
“We need to have a second, and maybe even a third store in Metro Manila to cover the needs of the many consumers coming. No timing yet, no place yet but definitely on the expansion, it is on the drawing table,” Mr. Platzer said in an interview at the sidelines of a seminar in Pasay City last week.
“The Pasay City store is the beginning for IKEA in the Philippines and there’s a future of more stores to come. It is just a matter of time. Because it is a big market, it is a growing market and in one moment, this store will be even too small to host so many people,” he added.
In terms of IKEA’s expansion outside of Metro Manila, Mr. Platzer said that the idea is “far from the pipeline.”
“IKEA needs a certain amount of visitation. We live from visitation. We need a lot of visitors. Outside of Metro Manila, there [are] not enough people. And, if there [are] enough people, they need to travel a long way to come to IKEA. So, that would be a hindrance. We can think about cities like Cebu and maybe Davao, but I think that’s about it,” Mr. Platzer said.
However, Mr. Platzer said that IKEA Philippines plans to add more “fulfillment areas” to serve more consumers buying online. The areas are where customers can pick up the products they purchased online.
“We are about to stretch our fulfillment areas… In the future, we are going to serve more of the islands. Customers hopefully from Iloilo and Leyte can order online,” Mr. Platzer said.
Meanwhile, Mr. Platzer said that IKEA Philippines had raised the prices of some of its products due to the depreciation of the Philippine peso versus the US dollar. He did not provide specific figures or products that had price increases.
On Sept. 23, the peso dropped to a new all-time low of P58.50 versus the greenback.
“It’s a drama for us. The US dollar is too strong because we pay everything in dollars. We buy our goods in US dollars and that is not good,” Mr. Platzer said.
“We always try to keep the prices as low as possible, and we still do. We still believe we have the lowest possible price in the country for this quality. But the whole currency challenge globally, the war in Europe with Russia and Ukraine, all these challenges have an impact on the supply chain and the prices,” he added. — Revin Mikhael D. Ochave