Ikea, the Swedish home furnishing store chain, will open two more stores in Greater Bangkok by 2017 in an alliance with SF Development Co.
Lacia Sherlock, the store manager of Ikea at Megabangna, relaxes on a sofa, one of many unique designs for sale. Strong customer response has prompted Ikea to plan two more stores.
Its first one in Thailand opened at Megabangna shopping centre just over a year ago to what the company said has been an overwhelming response.
Sales have surpassed expectations by 35%.
"We consider this a huge success. More than 3 million visitors came to visit our store in the first 10 months," said store manager Lacia Sherlock.
One of the new stores will be to the west of the city and the other in the northern suburbs.
"Our investment focus remains Bangkok, and the speed of store development will depend on land acquisitions, which are not easy, as land prices are going up," said Ms Sherlock.
Ikea, through Ikano (Thailand), will jointly develop the two new outlets with SF Development, the community mall developer.
It wants to keep the same concept it has at Megabangna, for where Ikea is an anchor store.
Megabangna is a large shopping complex housing retail tenants such as HomePro, Big C Supercenter, Major Cineplex and Robinson Department Store along with Ikea.
The 320-rai mall located on Bang-Na Trat Road has 400,000 square metres of space.
Ikea, covering 43,000 sq m, has 5,000 visitors on weekdays and 15,000 to 20,000 on weekends.
Thitirat Charoenyingwattana, the vice-president for marketing at SF Development, Megabangna's operator, said the company plans two new shopping complexes similar to Megabangna over the next decade.
Each project will cover 300 rai and cost 10-15 billion baht to build.
SF Development and Ikano will each own 49% of the new projects and individuals the rest.
Ms Thitirat said 99.6% of retail space in Megabangna is occupied, with 60,000 visitors on weekdays and 100,000 on weekends.
Meanwhile, Ms Sherlock said Thais have become comfortable with Ikea's "do-it-yourself" concept.
"If you come to the store on Saturday or Sunday, you'll see a lot of customers push their carts to the loading area and actively load products onto their trucks. It's amazing to see this picture," she said.
The furniture and decorative products sold come from many countries including China and Russia along with some domestic products.
Ms Sherlock said Ikea will continue to strengthen its relationship with Thai suppliers, especially the Mae Fah Luang Foundation.
This fits with the goal of continuously lowering retail prices, which she explained Ikea is able do by buying products in bulk for all stores worldwide.
It steps in to help suppliers with design, production, packing and logistics.
Ms Sherlock said Ikea knows many of its products are copied, but this is a problem all over the world. "We feel honoured that our products are copied, as this shows they are interested in Ikea. But if customers look at the product details, they'll see the difference. The quality can't be copied," she said.
About the author
- Writer: Krissana Parnsoonthorn