On May 24th CITO headed to the newly opened IKEA in Xindian, excited to meet with Hugo Asplund, the Deputy General Manager of IKEA Taiwan.
IKEA was founded 76 years ago and is today present in 37 countries and divided into 10 franchises. The IKEA Group is by far the largest one while the franchise operating in Taiwan, Dairy Farm, is the second largest. Dairy Farm is a retail company that owns more than 100 brands spanning over several industries. Hugo has spent all of his professional carrier within IKEA and has been working at IKEA in Taiwan for around two years.
During our visit, we talked about IKEA and specifically about working with franchising as business format. Today almost all IKEA stores operate under franchise agreements. A choice made to enable their global expansion, whilst at the same time live up to the vision to create a better everyday life for the many people. For a long time, the IKEA Group was equated with IKEA, until the IKEA concept was opened up for other franchises in recent years. This enables testing of new formats and allowance to find own solutions that works in particular domestic markets. In Taiwan, where space is limited, many of the IKEA stores are smaller and more city-centered compared to what we are used to in Sweden. For example, a 100-NT$ store opened up in 2018 in Taipei.
We got insight in the differences you encounter when selling furniture in Taiwan compared to Sweden. E-commerce is increasing in Taiwan but is lagging significantly compared to the tremendous increase in Chinese market, and people are still willing to visit the physical stores to a high degree.
Taiwanese people are generally quite price sensitive when it comes to buying furniture, which makes IKEA a great choice. The product portfolio suits them well and especially the simple colors, although red furniture is a bestseller during the Chinese New Year. The restaurants and cafés in the stores sell extremely well, thanks to the strong Taiwanese tradition of eating out. The menu is partly locally adapted, although we can still find our IKEA favorites in the menu.
While Hugo shared his expertise on IKEA, we also got to take part of some valuable experiences he has accumulated during his career and lessons learned from it. Before we headed to the restaurant for a traditional Swedish lunch, Hugo took his time to show us around in the brand-new store. The visit was much appreciated amongst all the CITO members and we all left with new insights, increased interest and some long-awaited Swedish favorites. CITO would like to thank IKEA Taiwan and Hugo for welcoming us and making this visit possible.