Price Hike
IKEA charges higher prices in Korea, the Consumers Union of Korea (CUK) reported today. After surveying 49 IKEA products traded across the world, the civic group found that the local prices are the second highest in South Korea after Sweden among 21 OECD member nations. And it added that roughly 90 percent of the products were more expensive than average. Also, about 20 percent were cheaper everywhere outside of Korea.
The CUK complained that the Sweden-based multinational furniture retailer IKEA unfairly prices higher in Asian countries including Singapore, Taiwan, Hong Kong, Saudi Arabia, and Indonesia. The Asian price is significantly higher without VAT, compared to Europe's 20 percent VAT.
A CUK spokesman said, “IKEA has a significant influence on the domestic Korean market. That’s why we studied the company's pricing." To ensure the credibility of the research, the union adopted a survey method accredited by the International Monetary Fund.
IKEA entered the South Korean market last year, as South Korean customers had increasingly purchased its build-it-yourself furniture and other home decorating items mostly online or via small retail importers. Before opening its first store in Gwangmyeong on the outskirts of Seoul on Dec. 18, 2014, the home furnishing company unveiled lists of some 8,600 products on its official website with their prices. "IKEA" ranked as one of the most sought-after keywords on local online portals, proving its popularity in South Korea. The first domestic outlet drew over 1 million visitors in its first month. However, even during its debut, IKEA has generated complaints of unfair pricing policies.
IKEA Korea said the survey was unfair, considering that it looked at only 49 out of 9,200 products on offer in Korea, claiming that the company sets prices after evaluating a number of market factors for each country.