SANTIAGO – Swedish furniture giant Ikea is poised to expand into South America, with stores planned in at least three countries in the region.
The world’s biggest furniture retailer has signed a partnership with Chilean retailer Falabella as part of the expansion.
IKEA’s aim is to boost its customer base to 3.2 billion in 2025 from around 1.2 billion today, in stores and online.
The flat-packing firm will open at least nine stores across Chile, Colombia and Peru over a period of 10 years and will sell through online sales channels in the three countries.
The Swedish company’s first South American warehouse will open in Chilean capital Santiago at the end of 2020, followed by further warehouses in Lima, Peru and Bogotá, Colombia.
Inter IKEA Group Chief Executive Torbjorn Loof said South America is one of IKEA’s key future growth markets. He said Chile, Peru and Colombia, with a combined population of almost 100 million people, had a market potential for home furniture of more than 8 billion euros (7 billion pounds).
Loof said that while IKEA’s franchise partner Falabella will invest $600 million, entering South America will not come with any “physical investments” for IKEA, which will contribute mainly with staff, support and know-how.
Ikea is also in the process of exploring a possible expansion further north in Mexico, where partner Ikano Group (who operate Ikea stores in Singapore, Malaysia and Thailand) opened an office in 2017.
IKEA Group, whose founder Ingvar Kamprad died in January at the age of 91, last year grew retail sales by 4 percent to 34.1 billion euros.
Inter IKEA is the brand owner and franchisor while IKEA Group is the biggest franchise owner with 363 stores in 29 markets, out of a total of 418 stores in 49 markets.