By: Manila Bulletin
IKEA, the Swedish-owned home furnishing retailer, will open first its online store in the Philippines months before the physical store in the Mall of Asia complex in Pasay City opens next year.
The Manila Ikea, the world’s largest IKEA store when it opens in 2021, is designed from the start to house an e-commerce fulfilment operation and a customer contact center.
Overall, however, the company reported that after more than a decade of expansion and growth, IKEA Southeast Asia and Mexico charted its first drop in revenue by closing out its most challenging financial year with P45 billion in turnover.
At the same time, the COVID crisis accelerated the company’s digital transformation as interest in home furnishings surged during lock-downs. The Swedish home furnishing retailer reported that its online sales in Southeast Asia more than doubled during its toughest year.
The company’s nine IKEA stores in Southeast Asia posted P38.5 billion in sales between September 2019 and August 2020 – a 7.4 percent drop from the last financial year – after facing business closures of up to 2 and a half months, supply challenges and limits on building capacity.
Combined with income from its five IKEA-anchored shopping centres (operated by Ikano Centres, which provided rental relief to hundreds of struggling tenants) the company’s turnover totalled P45 billion or P3.6 billion lower than the previous year.
With ecommerce operating in all three of its Southeast Asian markets for the first full year, the IKEA stores were largely able to continue selling during long closures with support and guidance from government authorities. Co-workers set up large-scale fulfillment operations virtually overnight.
The teams sourced additional transport, opened up more delivery slots and refreshed websites as online orders flooded in. By the end of the financial year, customers had placed more than 525,00 online orders and rung up P5.4 billion in web sales – more than double the company’s ecommerce turnover from the previous year.
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