By Victor V. Saulon, Sub-editor
IKEA has allocated an initial investment of P7 billion to set up its first Philippine store, which at a leased area of 65,000 square meters is described by the Swedish furniture retailer as its largest in the world.
Christian Rojkjaer, managing director Ikea Southeast Asia, said the store would have around 9,000 well-designed, functional home furnishing products, and could be the brand’s first stop before expanding outside Metro Manila.
“Everything is open right now. But I could imagine there will be some more stores in Manila and then we’re going further out potentially with e-commerce first, but I think we’re going to focus on Manila for a while,” he said in an interview during the launch of Ikea’s pre-opening website at the Mall of Asia in Pasay City ahead of the store opening in end-2020.
Asked about the potential other stores, he said: “We don’t know. We are looking into it.”
“The world is changing so fast — big stores, small stores, e-commerce. We are looking at the totality, but we will expand in the Philippines,” he said.
Mr. Rojkjaer said the company, which owns the Ikea stores in Singapore, Malaysia and Thailand, plans to hire around 500 Filipino workers and would create hundreds of spin-off jobs and business opportunities.
Those business opportunities include local partners to support operations in areas such as logistics, food supply, transport, waste management and security.
“Some of them we have found. But we are still looking for clearing all those contracts here. Lots of contracts. There will be lots and lots,” he said.
The Ikea store will be located between Mall of Asia Arena and SMX Convention Center in an area as big as the size of 150 basketball courts. Company officials said the local store will be almost double the size of a typical Ikea big blue-box.
The shop floor will be similar to other Ikea stores but the building will also house a call center and a supersized warehouse to accommodate e-commerce operations in the Philippines. The store opening will also allow shoppers to shop online and get their orders delivered.
Georg Platzer, Ikea Southeast Asia market development manager, told reporters he would be managing the company’s first store in the Philippines.
“In two years from now, I would love to have opened already. Let’s stick to end of 2020 because it’s quite a complex project. You’ll never know what’s going to happen like it’s a big construction site,” he said.
He said P7 billion is the investment for the retail side, which also covers fitting out, stocking, marketing, and staffing the first store for its opening.
“For us it’s always important that we get as close as possible to the places where many people live. We want to be accessible,” Mr. Platzer said, adding that the store should be about a 60-minute driving distance from its target market.
“Metro Manila is quite dense area already,” he said. “There are not so many open spaces like we found here [Mall of Asia] a perfect block, but we’re still positive that we’re gonna find some more and open more touch points in the future throughout Metro Manila, but also why not the whole Philippines.”
A typical IKEA store has more than 55 inspirational room settings. The self-serve warehouse has flat-packed products ready to be taken home. A supervised playroom for kids is available as well as a restaurant.
Sought for comment, Sweden’s Ambassador to the Philippines Harald Fries, said: “Ikea is probably the Swedish company that builds the most on the Swedish brand, on Swedishness. So whenever Ikea comes into a new country it means a lot for strengthening the image of Sweden in that country in a very positive way.”
Separately, SM Prime Holdings, Inc. said it was set to build another mixed-use building in the Mall of Asia complex that will be its first lifestyle city development in Pasay City. The project will house Ikea’s first store in the country, it added.
SM Prime President Jeffrey C. Lim said in a statement that the addition of the mixed-use facility, and the entry of Ikea, “complements the integrated lifestyle we dreamt” for the Mall of Asia complex.