Doing it right the second time: IKEA


I guess I am one of those Ikea addicted kids, because I cannot image my life without any IKEA furniture at home. Although I was unhappy to observe Ikea to fail with the first entry, Ikea has shown that it is worthwhile to enter the Japanese market twice. Last month the Swedish furniture giant announced that they have plans to build a nationwide store network (new outlets planned in Nagoya and Kyushu according to CEO Mikael Ohlsson). So far Ikea had five locations focused mainly on areas close to urban centers. Ikea plans to expand across the country by opening stores at an average pace of one per year. Further the sales figures speak for themselves: Ikea’s Japanese sales for the year ended Aug. 31 rose 40% to roughly 52 billion yen.
From my perspective during the first approach the concept was based on the global approach, not focusing on the typical smaller set up with Japanese homes. Although the 2003 Housing and Land Survey done by the Ministry of Internal Affairs and Communications talks about an average total floor area of 94.85 square meters (28.69 tsubo) for Japan, this does not reflect the typical apartment size in the packed cities. Most likely an apartment in Tokyo or other larger cities, the bedroom/kitchen combination has the average size of about 16 to 20 sq. meters for a single person and then for a family most likely about 45 to 60 sq. meters. How to set up furniture at home efficiently becomes a must. Furthermore actually showing how it can be done with examples is a basic requirement in Japan. With just showing a solution on paper, or expecting the customer to be creative by themselves, with this approach for sure no difference can be made in Japan. Having this in mind Ikea has an actual floor spaces of around 40,000 sq. meters. “Customers are more eager to make purchases when they are able to touch and try different products”, says Ohlsson. Ikea has understood that having showrooms is still a must in Japan.
With the rising online sales in Japan, I am pleased to see Ikea going the “right” way. They will launch online sales from October onwards. As a first step furniture to corporate customers, then remodeling projects for homes will follow. Honestly I am truly impressed about the re-thought strategy of Ikea, because furniture to corporate customers is a promising niche, plus the timing for online sales is just perfect! Saving money online is booming in Japan!

Brought to you by Sibylle Ito (シビル伊藤).

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