Ikea, the largest furniture retailer on a global scale, was attracted to the Philippines booming economy, and strong housing and condominium market that it decided to build its world's largest store in Manila.
Georg Platzer, the market development manager of Ikea Southeast Asia, said the Swedish-founded multinational group which specializes in ready-to-build furniture, plans to target more than 5 million households just within the 60 minutes distance to the planned location of the Ikea Philippines.
The growing middle class in the Philippines is expected to splurge their money at a value double what the Italians are going to spend by 2030, according to Bloomberg. The third world country has more than 150 million people dominated by a working-age demographic - a perfect formula for a booming economy.
Indeed, the Philippines' wealth grew more than 6 percent for 13 straight quarters, driven primarily by the growing buying power of the country's working middle class. The expenses coming from this demographic accounted for the majority of the nation's gross domestic product.
Swedish Ambassador to the Philippines Harald Fries told the press that Ikea Philippines will open in late 2020.
Ikano Philippines which is overseeing the development signed a long-term lease agreement with SM Prime Holdings, CNN Philippines reported. Ikea Southeast Asia will initially invest $134 million to jumpstart the development of the Ikea Philippines store, Managing Director Christian Rojkjaer said at the launch of the Ikea Philippines website on Nov. 20.
Ikea Philippines will be constructed on 700,000 square feet of land, approximately the size of 150 basketball courts. In comparison, other Ikea big blue-boxes were only about 376,000 square feet. It will also house the warehouse, an e-commerce facility, and a designated call center.
The store will be connected to the SM Mall Of Asia, between the SM MOA Arena and SMX Convention Center - a district flocked with casino resorts of which developments amounted to about $1 billion each. This area is a favorite among affluent Chinese tourists.
Ikea Philippines plans to hire 500 Filipinos and is also looking for companies that can render logistic services, waste management, banking, transport, and other operational support.
Platzer told CNN Philippines that Ikea is looking forward to selling furniture designed by a Filipino, adding that the company already sells pieces from Japanese, Korean, Chinese, and Thai designers.
Ikea Philippines will house 9,000 products that best suit the Filipino household lifestyle. Platzer said Ikea's big challenge in the Philippines is to come up with products that could address the small living space in the country, as small as having six people living in a 376-square-foot space.
