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"We have zero tolerance on corruption and we have a very clear policy," IKEA Russia’s managing director Per Wendschlag said in 2011.
Ukraine and Slovenia join the family
Ukraine and Slovenia are the latest two countries to join the IKEA family. The Kyiv store has been a long time in the making. It should be a no-brainer, as the 43mn strong population makes it the third-biggest consumer market in the region after Russia and Poland. However, three decades of mismanagement and almost constant crises has made it unappealing. But now it appears the market is about to come of age.
The story with Slovenia is a little different. It also opened in February with a low-key socially distanced launch. With only 2mn people Slovenia is a tiny market by comparison – no bigger than one micro-district in a Moscow suburb – but as bne IntelliNews recently reported, it is the great secret economic success story of Emerging Europe. Incomes have risen sharply to the point where it is on par with the lower end of the old EU member states.
Like Poland in 1990 and Russia in 2000 Ukraine is poised to start its rapid catch- up growth spurt, but it is very early days and an imminent boom is not at
all obvious.
In 2009, IKEA bought a plot of land in Odessa on which to build a store. A year later IKEA cancelled the store, saying there was not a strong enough market.
In September 2018, IKEA announced
it was going to try again before the
end of 2019. The store was planned for the Ocean Mall in Kyiv with their new concept city store. In December 2019, IKEA once again postponed the opening of the first store in Ukraine until spring 2020, when it launched an online service. The Ukrainian store finally opened in January in Blockbuster Mall in Kyiv.
"IKEA is pleased to announce the opening date of the first physical store in Ukraine. On February 1, the company will meet its first Ukrainian customers in
the city format store in Kyiv, located in Blockbuster Mall. This event is another step towards expanding IKEA's market in Ukraine after launching the online store in May 2020," a company statement said.
Getting the Ukraine business going has been incredible difficult. The Ukrainian operation was dogged by scandal well before its doors opened.
Like the other markets, IKEA was already working with Ukraine to source inputs for its furniture manufacture, but last June British NGO Earthsight released the results of an 18-month investigation that alleged IKEA was selling beech chairs made from timber received from illegal logging of the forests in the Ukrainian Carpathians, an accusation IKEA has denied.
Even now that IKEA has started retail operations, it has kept that low key too. The Ukrainian branch is the company’s new “City store” format, a smaller store that is in the heart of the capital rather than the yellow and blue giant that opened in Moscow two decades ago.
“The Kyiv store opening is an important achievement both for our Ukrainian operations and for the whole of IKEA South East Europe, as this is the first city store in the region”, said Florian Mellet, market manager at IKEA Kyiv, at the opening of the store.
Overall, 2,000 home furnishing products are available for cash and carry, while the remaining 3,000 – mostly furniture
and other larger products – are available for order. They can then be collected
for free at one of the store’s pick-up points, including one directly in a store, or delivered straight to the purchaser's home for an additional charge.
Social responsibility in Central Europe
IKEA now has a total of 49 stores across the region and plans to open at least a dozen more in the next few years. Only the very smallest countries are without; however, many of the oldest stores are in Central Europe where the company has “become part of the furniture” and plays an active role in promoting liberal values.
The company was relatively slow into the Baltic states, where it opened its first store in Lithuania in 2013, and those
in Estonia and Latvia only in 2019. The first big name furniture store to arrive
in the Baltics was the Finnish retailer Stockmann that set up in the 90s and then opened a legendary store in central Moscow that catered to the wealthy New Russians of the Yeltsin era and made
a fortune. But as the market changed the focus, and profits, went from targeting a few super-rich minigarchs to catering to the mass market. Stockmann closed its flagship store in Moscow in 2016.
IKEA in Czechia operates four stores, two of them in Prague, one in Brno and one in Ostrava. The first store in the country was built by Prague's Budejovicka
metro station in 1991 and was moved to Prague Zlicin in 1996. In Slovakia, IKEA has operated only one store in its capital Bratislava since 1992. Since
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