'IKEA effect' upgrades Korean furniture industry

'IKEA effect' upgrades Korean furniture industry

Furniture sales in Korea sharply surged last year as Swedish furniture giant IKEA’s entry stimulated competition to create strong demand in the home decoration sector amid the brisk real estate market, data showed Monday.

Combined retail furniture sales were tallied at 5 trillion won ($4.15 billion) in 2015, up 7 percent from a year ago, according to data by Statistics Korea. The 2015 growth marks the highest since 2006.

The local furnishing market had slowed down since the 2000s in line with the stagnant real estate market, but the rising popularity of home remodeling TV shows and the vibrant housing market have boosted demand for home interior items.

Experts say IKEA’s entry into the local market in December 2014 also prompted industry leaders to offer a wider range of interior items and expand distribution channels to catch up with the latest consumption trends.

Major Korean companies aggressively increased the number of big concept stores in major cities, presenting showrooms and stepping up customer service for kitchen renovation and other home solutions.

“The rising interest in home interior items has boosted demand

for new furniture, driving up sales of furniture makers,” Kim Kwang-seop, an official at Statistics Korea, said.

The nation’s big five players, including Hanssem, Hyundai Livart and Enex, saw their sales increase over 20 percent in the first nine months of last year, their financial statements showed.

IKEA’s first store in suburban Seoul attracted over 6.7 million visitors and posted 308 billion in sales since its launch.

Source: http://www.koreaherald.com/view.php?ud=20160201000622

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