Ikea enters Indonesia
2013-12-06
IKEA enters Indonesia
The Asian marketing perspective
1. Introduction of IKEA
IKEA, a Swedish company, is known globally for its low prices and innovatively designed furniture. It was started by Ingvar Kamprad in 1943 and currently has 338 stores in 40 countries, mainly in the developed countries in Europe, America and the Asia Pacific. 1
2. IKEA’s Expansion in Asia and Indonesia
With the unstable market conditions in Europe and the Americas, IKEA is looking to Asia for expansion, namely into the Chinese and Indian market after having entered other Asian markets for example Singapore, Hong Kong, Japan, Taiwan and Malaysia. South Korea and Indonesia are expected to join this list with the opening of their first IKEA stores in 2014. IKEA has made various adaptations when marketing in China and is expected to advertize similarly on the Indian market. 2
3. Indonesian Society 3.1 Demographics
Indonesia has an estimated population of 245 million in 2012. The majority of their population range in the ages between 25-54, with a good mix of both genders. Jakarta has an estimated population of 26 million. The official language of Indonesia is Bahasa Indonesia with approximately 210 million native speakers. Majorities of its population are Islamic and Indonesia has the largest Muslim population in the world. 3
3.2 The Indonesian Economy
In 2012, Indonesia has a Gross National Income (GNI) of US$3,484 per capita. The country’s annual disposable income per capita reached Rp19, 016 thousand (US$2,027) in 2012 and its consumer expenditure per capita reached Rp18, 425 thousand (US$1,964) in 2012. However, in 2012 the Rupiah saw strong depreciation against the US Dollar. The rise in the exchange rate against the US Dollar has resulted in higher prices of imported raw materials and imported products.4
3.3 The Shopping Culture in Indonesia
In Jakarta specifically, shopping is viewed as a form of leisure and it is
IKEA enters Indonesia
The Asian marketing perspective
1. Introduction of IKEA
IKEA, a Swedish company, is known globally for its low prices and innovatively designed furniture. It was started by Ingvar Kamprad in 1943 and currently has 338 stores in 40 countries, mainly in the developed countries in Europe, America and the Asia Pacific. 1
2. IKEA’s Expansion in Asia and Indonesia
With the unstable market conditions in Europe and the Americas, IKEA is looking to Asia for expansion, namely into the Chinese and Indian market after having entered other Asian markets for example Singapore, Hong Kong, Japan, Taiwan and Malaysia. South Korea and Indonesia are expected to join this list with the opening of their first IKEA stores in 2014. IKEA has made various adaptations when marketing in China and is expected to advertize similarly on the Indian market. 2
3. Indonesian Society 3.1 Demographics
Indonesia has an estimated population of 245 million in 2012. The majority of their population range in the ages between 25-54, with a good mix of both genders. Jakarta has an estimated population of 26 million. The official language of Indonesia is Bahasa Indonesia with approximately 210 million native speakers. Majorities of its population are Islamic and Indonesia has the largest Muslim population in the world. 3
3.2 The Indonesian Economy
In 2012, Indonesia has a Gross National Income (GNI) of US$3,484 per capita. The country’s annual disposable income per capita reached Rp19, 016 thousand (US$2,027) in 2012 and its consumer expenditure per capita reached Rp18, 425 thousand (US$1,964) in 2012. However, in 2012 the Rupiah saw strong depreciation against the US Dollar. The rise in the exchange rate against the US Dollar has resulted in higher prices of imported raw materials and imported products.4
3.3 The Shopping Culture in Indonesia
In Jakarta specifically, shopping is viewed as a form of leisure and it is
References: (Used 2013-12-03) IKEA turns the global local for Asia push, Anna Ringstrom, 2013-03-06 Couching tiger tames the dragon, Valerie Chu, Alka Girdhar and Rajal Sood, 2013-06-21 http://businesstoday.intoday.in/story/how-ikea-adapted-its-strategies-to-expand-in-china/1/196322.html (Used 2013-12-02) Home Furnishings in Indonesia, Euromonitor, 2013-09-04 (Used 2013-12-03) Retailing in Indonesia, Euromonitor, 2013-04-04 (Used 2013-12-03) Furniture and Homewares Stores in Indonesia, Euromonitor, 2013-04-04 (Used 2013-12-03) Indonesia: Country Profile, Euromonitor, 2013-04-04