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IKEA Korea sets relatively higher price in S. Korea

November 18, 2014

A bird’s-eye view of IKEA Korea’s first South Korean store in Gwangmyeong, south of Seoul. It is scheduled to open on Dec. 18. (Yonhap)

SEOUL (Yonhap) — With the official opening of the first showroom of IKEA Korea, the local unit of the Swedish furniture giant, just one month to go, its pre-unveiled prices have sparked controversy in South Korea as they are twice as high as the global price.

The home furnishing company had decided to enter the South Korean market earlier this year as its build-it-yourself furniture and other home decorating items have gained popularity among South Korean customers, who have been buying IKEA products mostly online or via small retail importers.

It said it will open five stores throughout South Korea by 2020.

Before opening its first store in Gwangmyeong on the outskirts of Seoul on Dec. 18, it unveiled its lists of some 8,600 products and their prices last week on its official web site and its home page became one of the most sought after keywords on local online portals.

But the long-waited anticipation soon turned to complaints as the prices of popular IKEA products were more expensive than those sold in the United States and other countries.

A TV desk named Besta Burs is priced at 449,000 won (US$408) on the IKEA Korea page, while it costs $249 in the U.S. and 378,000 won in Japan.

It sells popular Hemnes TV storage combination for 796,000 won ($723) but U.S. customers can buy it at $499.

Many users asked the company to explain the pricing gap between products in South Korea and the U.S., arguing that the Swedish firm discriminates Korean customers.

“Why do these sets of furniture have different prices on the IKEA sites in Korea and the U.S.?” Kim Kyung-ha wrote on IKEA Korea Facebook. “I can’t understand why the price varies. The U.S. also imports (IKEA products) from Sweden, as South Korea does.”

The company, however, has not made any responses to the complaints.

Earlier this year, Andre Schmidtgall, retail manager of IKEA Korea, said that his company would set prices of its goods at an appropriate level for the customers’ purchasing power of a country.