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Industry News
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.
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