Page 54 - bne_May 2021_20210501

54 I Eastern Europe bne May 2021
IKEA entered the Bulgarian market in 2011, with a store in Sofia, and also has smaller “order centres” with limited product ranges and where people can pick up mail orders in the regional cities of Burgas and Plovdiv, and it opened an 8,000-square metre store in Varna last year. Greek investor Fourlis holds the IKEA franchise for Bulgaria along with Greece and Cyprus. This year, Fourlis plans to open a store in Mall of Sofia
in central Sofia. According to a press release from Fourlis, like the Varna store, the new Sofia store will be one
of the “new generation” of small and medium-size stores in urban centres the group is setting up.
Croatia was the third Southeast European country to get an IKEA
store, which opened in August 2014
just outside Zagreb, the year after the country joined the EU. This was seven years after the Swedish retailer set up its Croatian subsidiaries. At the time, the store was one of the biggest in Europe.
IKEA’s first Serbian store opened in August 2017 in Bubanj Potok, Belgrade. To illustrate the significance of the company’s arrival, President Aleksandar Vucic wrote in a comment for daily Alo ahead of the opening that IKEA’s arrival in Serbia is important not only because of the investment and new jobs, but also because it brings changes to the “old ... parts of mentality, collective laziness and resistance to chances as well as to a life philosophy which has been repeated often – to wait someone else to do something for us”.
There are now plans for a 40,000-square metre retail park in Belgrade – originally due to open by the end of 2020 – as well as new stores in Novi Sad, Kragujevac and Nis, as part of a wider expansion in Southeast Europe.
Slovenia was the latest country in the region to get an IKEA store, which opened on February 25, 2021 amid the COVID-19 pandemic.
IKEA initially announced the opening of a store in Ljubljana for the end of 2020, but the plans were postponed due to the COVID-19 restrictions. IKEA had been
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mulling an online-only launch but went ahead with the physical store opening when the government eased restrictions in March.
"Today's opening of the store confirms IKEA's commitment to Slovenia and paves the way for further business development in our newest market," the CEO of IKEA Southeast Europe, Sara Del Fabbro, said at the inauguration in Ljubljana's BTC City shopping district, according to a press release from the mall. “Today, when we face challenges like never before, we are thrilled to be able to welcome our first customers in Ljubljana. The fact that we can help Slovenians realise their great dreams and wishes in life at home is our greatest reward and privilege.”
The launch took place just nine days after Slovenia allowed non-essential shops to reopen. The government started to ease restrictions on February 15 after the number of new infections stabilised in recent weeks after reaching a peak in early January.
The opening was a restrained affair compared to the huge queues outside the first Moscow IKEA that opened back in 2000, the deadly stampede at a store opening in Saudi Arabia or the stabbing when a new store opened in Edmonton, North London. Due to the coronavirus epidemic, IKEA has introduced a special system for visiting the store: in the first few weeks, customers must book an appointment in advance.
None of the smaller countries in the Western Balkans have IKEAs yet, and there seems no immediate prospect
of this happening, given their small populations and relatively low incomes. However, future openings have been considered; on the opening of the Serbian store in 2017, Stefan Vanoverbeke, country manager of IKEA for Southeast Europe, mentioned the possibility of opening in Bosnia & Herzegovina at some point.
IKEA-the-furthest
Uzbekistan is home to Alexandria-the- furthest, the most distant of the string of eponymous cities founded by Alexander
the Great on his epic travels, and was rumoured to become the location of what could be called IKEA-the-furthest.
Tashkent regional governor Davron Khidoyatov served up what seemed to be some great economic news to Uzbek President Shavkat Mirziyoyev during an investment presentation – Swedish giant IKEA, he declared in March, was set to build a $52mn furniture factory in Chirchik, outside Tashkent.
Except it turned out not to be true.
It seems that the governor had got ahead of himself and IKEA said they were not planning a store in Uzbekistan until 2025. But the hype surrounding Khidoyatov’s comments both highlights the badge of honour of becoming home to the yellow and blue building, and also is a comment on the “IKEA development index.” There has been a lot of excitement over Uzbekistan’s opening up and as by far the most populous country in Central Asia with 34mn people, it is an obvious destination for IKEA. But despite the obvious potential of the country, as the GDP per capita is still only $1,724, according to the World Bank – a tenth of Russia’s $11,585 or Romania’s $12,919 in unadjusted terms – it is still very early for the furniture giant’s arrival. The Uzbek middle class is yet to emerge.
By contrast, Kazakhstan is much further advanced and the GDP per capita
of $9,812 means that a middle class
is already well established. But the country’s population of only 18.5mn puts it on the small side.
There was a lot of talk about IKEA entering the Kazakh market in the early noughties when a retail and residential construction boom took off, driven by demand from the new middle class. Bne IntelliNews’ correspondent reports that there were rumours IKEA had got as far as looking at two sites on the Almaty ring-road, but found the land prices
too high. In the meantime, Kazakhs can still buy IKEA’s goods online from a few companies not affiliated with IKEA that will accept orders and have them sent to Kazakhstan.