Success Story - Voices of foreign company executives in Japan IKEA Japan KK (Mr. Peter List) Ikea is a major furniture manufacturer founded in Sweden, and opened its first Japanese store in 2006. Since then, IKEA Japan has opened eight stores across the country including those in regional cities, and announced its plan to have 14 stores by 2020. IKEA Japan has been actively expanding its store network by forming strong relationships with local communities. We interviewed Mr. Peter List, President and CEO of IKEA Japan, to find out about the company’s view on its business in Japan. Ikea’s vision is “to create a better everyday meeting our vision, “To create a better everyday life for the many people,” and the company has life for the many people.” So it means that we’re built its stores in Europe, North America and not just selling furniture, we’re actually creating Asia. Ikea in Japan opened the first store in a better everyday life for the many people, and 2006 in Funabashi City, Chiba, and since then, that inspires me in my work to come to work the company has opened stores not only in the every day. Kanto region, but also in regional cities, That is also our culture and values. We emphasizing good relationships with local started in the Småland region in the south of communities. The company has announced its Sweden. In this region, the ethics of work, the plan to have 14 stores in Japan by 2020 and togetherness and the passion to achieve been actively expanding its store network. We something were very strong and everybody interviewed Mr. Peter List, President and CEO worked together and worked very hard towards of IKEA Japan KK (hereinafter, Ikea), to find out a common goal of helping that village grow and about the company’s view on its business in develop. Those things still live today in Ikea Japan. even though we’ve grown into a global company. Benefits in operating business in Japan? Japan is the second biggest retail market in the world. It also has the third largest GDP in the world. These two factors alone make it very appealing. Also, there is very high literacy level in Japan as well. In addition, many people live in small spaces in Japan and we have a lot of business experiences for areas with small space living Mr. Peter List, like Japan, for example, New York, Paris, President and CEO of IKEA Japan KK London, and so we have opportunities to apply (Ikea’s vision on the background) that know-how that we acquired in other countries into Japan. What are Ikea’s strengths? Our strength is very much about our vision. We are always continuously on our way to Copyright (C) 2015Japan External Trade Organization (JETRO). All rights reserved. Any inventions or difficulties when recognition and relaxation of regulations in the localizing products/services to meet future, that would bring a great benefit not only Japanese market demand? Any examples of to the company, but also to the Japanese products/services developed in Japan and consumers. sold in the markets of other countries? Reasons for and benefits of opening stores The Japanese consumers value service, so in regional cities? we had to think about how we offer low-priced In order to create a better everyday life for products to them but at the same time, how we the many people, we have opened our stores also add service. And we introduced something across Japan. In addition to the four stores in called the “Tebura de box.” This is a box where the Kanto region, we have stores in Kobe City you could post all your products and then we in Hyogo, Osaka City in Osaka, Kasuya-gun in would send it to your home. We introduced this Fukuoka and Sendai City in Miyagi. We are service because many people come by public very careful where we place our stores. transport to an Ikea store. We really tailored Regarding IKEA Fukuoka Shingu, we selected that to the Japanese consumers who come to the place which is next to a train station and we an Ikea store by train or bus, and that actually could also have lots of parking spaces. now has been copied around the world. Among our stores in regional cities, IKEA Another one is that we have unique Ikea Sendai, that’s a bit of a unique decision we products relevant in the Japanese market. For made. We had been discussing opening a store example, we used to make our sofas in the in Sendai and planned to do so sometime after same size around the world, but we made them 2020, but after the Great East Japan smaller so that they fit life at home in Japan. I Earthquake in 2011, we decided to really have visited homes across Japan so that we support the region, and brought that store can develop our product range that is unique forward by about 10 years, because good but relevant for Japan, based on their life styles neighbors are a very important part of Ikea’s and opinions. And it’s a trend, and people like to concept. Maybe they don’t want to buy anything have these sorts of products anywhere in the today, and that’s okay, but if they come and visit world. Not only sofas but also chopsticks and us, it’s a fun day out, and they get ideas and firmer mattresses, and cooling products inspiration. They eat in a restaurant and just developed in Japan are sold around the world. maybe they might buy something small to take The Japanese market plays an important role in home with them. But when they think of growing Ikea globally. So we can say that it’s furniture, the next time they need a bed or a been a win-win relationship. sofa, then they have Ikea in their mind and that’s what we want to do to help provide a Any difficulties you had when entering the better everyday life. Japanese market? We are planning to open more stores in the When entering the Japanese market, we regional markets such as Hiroshima and have issues such as restrictions on the Maebashi in Gunma. We also place importance acquisition of land for large-scale retail stores, on the Nagoya suburbs, which is one of the regulations on product certification and labeling mega markets, and are developing a plan to introduced only in Japan, and restrictions on open our first store in the Chubu region. the importation of food products that we offer at our restaurants. If we can see more mutual Copyright (C) 2015Japan External Trade Organization (JETRO). All rights reserved. Did you ask the authorities for help when Any plans for future business opening stores in regional cities? development? We want to build a relationship with the local Ikea wants to become accessible for many community, and that is not only when we open people, and today, we have eight stores across a new store. Opening a new store creates a lot Japan, but we would like to have 14 stores by of visitation and traffic, so working in harmony 2020. After 2020, we would like to have more with the local community as well as the stores and launch an e-commerce business as authorities is important. When building a well, to be able to offer items at even more relationship, we explain what Ikea is and make affordable prices. sure that any concerns from the community are listened to so we are a true neighbor and a How do you feel about the Japanese life good partner, which takes a long time. environment? We actually are very lucky. We’ve been I love living in Japan. From a small child, I approached by many authorities saying please had this ambition to live and work in Japan, bring Ikea to us. But our business model is a always fascinated by the culture of Japan. It’s a store of 20,000 square meters plus. So we beautiful country and everything is seamless, need a big piece of land, and then also we need and everything works at the right time. And the a lot of people to live in the area to bring an respect people have for each other and the Ikea store there, so it takes time to make a caring society are now part of what really helps decision. On the other hand, I feel very lucky me live my life in Japan. I am inspired daily by that our vision and our business idea is what I see when I go shopping, the culture, the something they want in their areas, and we beauty, the people and the food. have lots of good relationships with the (January 2015) authorities in areas where we have already opened a store, as well as with those in areas where we are planning to move into. History of the company 1943 Founded in Småland region of Sweden 2002 IKEA Japan founded 2006 First Japanese store, IKEA Funabashi and second Japanese store IKEA Kohoku opened 2008 IKEA Kobe, IKEA Tsuruhama and IKEA Shinmisato opened 2012 IKEA Fukuoka Shingu opened 2014 IKEA Tachikawa and IKEA Sendai opened IKEA Japan KK (Japan subsidiary) Establishment: July 2002 Business: Selling of DIY furniture and interior goods Parent company: INGKA Holding B.V. Address: (Head office) 2-3-30, Hamacho, Funabashi-shi, Chiba URL: http://www.ikea.jp Copyright (C) 2015Japan External Trade Organization (JETRO). All rights reserved.