IKEA Accused Of Discriminatory Pricing In Korea

Korea: IKEA was found to have priced its products in Korea higher than in other developed countries, a civic group in Korea said. Reported by Korea Times, IKEA’s products are the second most expensive in Korea out of 28 advanced nations, after taking into account disparity in exchange rates, according to the Consumers Union of Korea (CUK). The nation was the fourth most expensive after reflecting the buying power of the affected countries, the civic group said.

It surveyed the prices of 49 IKEA products in 21 OECD member countries and seven non-member nations in Asia, including Singapore, Taiwan, Hong Kong, Saudi Arabia and Indonesia. The Sweden-based multinational furniture retailer sells products at higher prices in Asian and Middle East counties than in North American and European counties, it concluded.

The union discovered the disparity though online research and onsite inspection. Products subject to the comparison included beds, closets, drawers, couches, coffee tables, TV stands, and children’s furniture.

“IKEA has had a sizable impact on the domestic home furnishing market,” said Lee Sun-yong, a CUK spokesman. “So we thought that we need to know more about the company’s pricing.” She said the union adopted a survey method used by the International Monetary Fund to ensure creditability of the survey outcome.

IKEA opened its first domestic outlet in Gwangmyeong, Gyeonggi Province, in December. It plans to open four more by 2020. The Gwangmyeong outlet has drawn nearly 2.2 million visitors since opening, showing strong growth potential for the company here. But the firm has been accused of posing a grave threat to homegrown furniture makers and retailers.

IKEA Korea balked at the CUK’s report, saying it was “disappointed” by the survey. “It seems difficult to draw a conclusion from research that only includes 49 IKEA products from the possible 9,200 IKEA products offered here in Korea,” the company said in a statement. “The products in the research are more fitting to European home furnishing preferences and purchasing patterns. From our sales analysis, we can already see an interesting sales pattern from what is being purchased here by Korean consumers.”

The company noted its outlets set prices differently based on many factors, including market demographics, logistics setup and currency.

Meanwhile, IKEA said 45 percent of its Korean customers were happy with the “affordable price,” citing a survey of 500 customers it conducted ahead of the Gwangmyeong outlet’s 100th day anniversary. Nearly 96 percent of respondents said they would visit the store again, according to the survey.

“We are striving to learn how to bring an even better shopping experience and service quality based on customers’ input and feedback,” said Cecilia Johansson, the Gwangmyeong outlet’s store manager.