The Malaysian Reserve, Photo Credit to The Malaysian Reserve
clock 02-07-2019
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IKEA Looking Into 1st Outlet in East Malaysia

The world’s largest home furnishings retailer, IKEA, is mulling to set up its first outlet in East Malaysia.

IKEA South-East Asia head of leasing, Arnoud Bakker (picture) said the company is exploring the potential of Sabah and Sarawak markets before deciding on the prospects of opening its first physical store in East Malaysia.

“We already delivered there. Our e-commerce is made available (for the markets). At the moment, we are in a study phase to see what is required and what do we look for,” Bakker told The Malaysian Reserve in an interview recently.

Bakker said the assessments are still in a very early stage and no committed timeline has been set.

As it is, he said IKEA is focused on improving and expanding its business through its assets in Mutiara Damansara (Selangor), Cheras (Kuala Lumpur or KL), Tebrau (Johor) and Batu Kawan (Penang).

For each IKEA store in the country, there is also one IKEA-anchored shopping centre.

“Up until 2015, we had one IKEA store in Malaysia and one IPC Shopping Centre. In the course of four to five years, we have added about 400% to our portfolio.

“Now, what we are doing is establishing them, learn, work and make them better. We have taken quite a quantum leap in a short period of time,” he added.

IKEA entered Malaysia in 1996 with its first outlet at 1Utama Shopping Centre in Petaling Jaya, Selangor.

The Swedish furniture giant opened Malaysia’s first blue-box store in Mutiara Damansara in 2003.

In terms of visitations, Bakker said all IKEA stores in Malaysia are in the top 50 out of more than 400 IKEA stores globally.

IKEA stores are operated by franchisees under the owner of the IKEA concept and worldwide franchisor Inter IKEA Systems BV.

The brand’s South-East Asia and Mexico franchisee, Ikano Handel Sdn Bhd, currently operates seven stores in the region — three in Malaysia, two in Singapore and Thailand, plus several pick-up and collection points.

IKEA South-East Asia delivered a S$1.05 billion (RM3.2 billion) turnover in its 2018 fiscal year.

Malaysia is the biggest contributor in the region, ahead of Thailand and Singapore.

At present, Ikano is gearing up for the opening of IKEA South-East Asia’s latest shopping outlet, Toppen Shopping Centre, in Tebrau in November this year.

The first IKEA-anchored shopping mall outside of the Klang Valley has managed to lease out 85% of the 1.2 million sq ft (111,483.65 sq m) of gross leasable area.

The combined gross development value of the IKEA store and the Toppen Shopping Centre in Tebrau amounted to RM1.6 billion.

Bakker said the mall is expected to receive 15 million footfalls a year, adding to some 4.8 million yearly visitors to the IKEA store in Tebrau.

In comparison, IKEA Mutiara Damansara and IPC Shopping Centre have recorded almost six million and 13 million visitations a year respectively, while IKEA Cheras and MyTOWN KL registered 5.5 million and 22 million visitations each.

Bakker said the stores and Ikano’s shopping centres enjoy between 70 million and 75 million footfalls every year in Malaysia.

IKEA South-East Asia is set to open the world’s largest IKEA store in Manila, the Philippines, at the end of 2020. New stores in Vietnam, Brunei and Mexico are in the pipeline.

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