By Bernie Cahiles-Magkilat
The Board of Investments (BOI) has approved the application of the global home furnishing giant IKEA as a foreign retailer under the country’s liberalized retail trade law.
Ikano Pte. Ltd, formerly known as Ikea Pte Ltd., was approved by the BOI on December 5, 2016. Ikano owns and operates home furnishing stores in South East Asia and under the franchise rights from the Swedish firm IKEA Systems BV. The company was incorporated in 1980 and is based in Singapore.
The company will also register with the Securities and Exchange Commission for its capitalization requirement.
It is not certain though if the global furniture retailer will have a local partner or if it will operate locally on its own.
But IKEA had been in discussion with the country’s largest retailer SM Group for its planned entry into the country.
Last year, Teresita Sy, vice-chairperson of SM Investments Corp., admitted they were just one among local retailers that IKEA had spoken to.
According to Sy, IKEA has a different model and the way they see the Philippines is different.
Sy also admitted that every local retailer was interested to partner with the popular global retailer.
Sy, however, could only surmise that IKEA’s entry in the local market may not be that soon. If ever, she said, the Swedish retailer maybe making a decision on its entry this year yet.
SM Malls, the country’s largest chain of department stores, also has its own “Home” store carrying various home furniture pieces and accessories. It also carries “Crate and Barrel”, an American furniture retail brand, a major store in its select department stores. But “Crate and Barrel” is positioned more for the upper market segment.
IKEA–which stands for Ingvar Kamprad, Elmtaryd and Agunnaryd–is owned by 90-year-old Ingvar Kamprad, who established the vanguard company in 1943 when he was 17 years old.
The furniture retailer, which is known for its affordable and ready-to-assemble furniture appliances and home accessories, has 384 branches in nearly 50 countries including Hong Kong, Indonesia, India, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand in Asia.
The IKEA website said that for over 60 years the company has been working to help create a better everyday life for the many people.
“We do it in small ways, answering needs related to life at home by creating well designed furnishing products that are attractive, functional, sustainable and affordable. That’s because we believe most people share a desire for beauty, a need for functionality and a regard for saving resources – both their own, and the planet’s,” the website said.
Its latest series of wireless chargers is an innovative response to the digital age. With smartphones being such a natural part of life today, IKEA said it wants to make charging a natural part of the home.