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Indonesian furniture-makers fear losing ground as IKEA expands
Indonesia's furniture exports surpass imports by value as concerns loom over IKEA's domestic expansion plans.
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PT Hero Group, as the local franchise holder of the IKEA brand, plans to expand the number of outlets in Indonesia. (Shutterstock, Inc./r.classen)
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ocal furniture makers are worried about rising competition on their home turf, as franchise holder PT Hero Group plans to almost triple the number of IKEA outlets in Indonesia.
The Indonesian Furniture and Craft Industry Association (HIMKI) said IKEA’s expansion would eat into the young consumer and families market, a lucrative segment for the country’s furniture sellers.
According to Statista, the domestic furniture and homeware market is expected to grow 11.51 percent annually over the next four years to US$6.98 billion by 2025.
IKEA, a Dutch home furnishing brand founded in Sweden, today sells around the globe through franchise agreements.
“The addition of IKEA outlets will severely hit Indonesian micro, small and medium [furniture] businesses,” HIMKI secretary-general Heru Prasetyo told The Jakarta Post on Wednesday.
Furthermore, he added, only 10 out of 195 HIMKI members supplied furniture to IKEA, which meant that the majority of members would not benefit from IKEA’s expansion.
Read also: IKEA in West Bandung to feature MSME products: Regent
