Numerous media outlets have reported that the historical furniture shopping complex in Goyang, also one of the biggest in the country, has been hit hard by the new IKEA store, the second location in South Korea, as some business owners in the region claim sales have plunged by up to 50 percent. (Image: Goyang City)
SEOUL, Oct. 31 (Korea Bizwire) – Local furniture shops in Goyang are reporting sales drops after global furniture giant IKEA recently opened a new store in the city.
Numerous media outlets have reported that the historical furniture shopping complex in Goyang, also one of the biggest in the country, has been hit hard by the new IKEA store, the second location in South Korea, as some business owners in the region claim sales have plunged by up to 50 percent.
IKEA’s Goyang store opened earlier this month, boasting an impressive size of 52,199 square meters, following in the footsteps of the Starfield Goyang mall, making the region a shopping mecca in northwestern Gyeonggi Province.
Not everyone is happy however, as local business owners, particularly those handling furniture, are expressing concerns over the negative economic impact brought upon them due to the influx of massive shopping complexes.
Jung Se-hwan, the chairman of Goyang’s local furniture cooperative, vouches for the damage felt by local furniture shops.
“While we had some ten customers per day on average, we only had five or six customers last Thursday, and only three yesterday. While it’s been thought of as the traditional effect of a new business, the number of customers has declined significantly,” Jung said.
“Because of IKEA and other big shopping malls, some businesses have already decided to close, while others have decided to leave the area after receiving compensation from construction companies,” Jung added while sounding regretful.
According to the furniture cooperative, around 18 stores are expected to call it quits by the end of next month.
Jung Gyeong-hyun, who chairs another local furniture business cooperative in Gyeonggi Province, says the negative economic impact of IKEA on the local economy will only grow.
ocal furniture shops in Goyang are reporting sales drops after global furniture giant IKEA recently opened a new store in the city. (Image: Yonhap)
“It’s only been a week since a new IKEA store opened, but the weekly sales performance at the furniture shopping complex in Unjeong has plunged by between 30 and 50 percent. If the new IKEA store is as successful as many expect it to be, the impact on local businesses will be beyond imagination,” said Jung, sharing a similar concern.
Last December, IKEA signed a memorandum of understanding and promised to donate 1 billion won over a period of three years to the local furniture industry as part of efforts to address criticism. However, many saw the furniture giant’s move as nothing but a face-saving gesture, as it boils down to only two years’ worth of advertising expenses.
Ashley Song (ashley@koreabizwire.com)
