SEOUL, Feb. 8 (Korea Bizwire) – More than half of home-furnishing retailers near IKEA’s first shop in South Korea have seen their sales sink for the past two months, hit by the Swedish industry giant’s entry into the local market, a poll showed Sunday.
According to the survey conducted by the Korea Federation of SMEs on 200 furniture shops based in Gwangmyeong on the outskirts of Seoul, 55 percent said their revenue have fallen on-year since December last year. The Swedish firm opened the world’s largest IKEA shop on Dec. 18.
Their average sales sank 31.1 percent in the December-January period from a year earlier, it showed.
By sector, sales of textile-related home products plunged 76.9 percent on-year in the December-January period, while revenue of furnitures and kitchen appliances tumbled 71.8 percent and 71.4 percent each. Sales of lighting products also nose-dived 52.9 percent.
Nearly 85 percent of the respondents also said the opening of the Swedish store will have an adverse impact on vitalizing the business districts of Gwangmyeong down the road, according to the findings.
“The opening of the IKEA shop has hurt not only the furniture sector but also other areas such as textiles or household supplies,” the federation said. “Policymakers must come up with countermeasures to address the impact of penetration of large-sized conglomerates to the local retail industry.”