IKEA’s New Store Format to Boost Mexican ExpansionBy Sofía Hanna | Tue, 03/30/2021 - 08:56
IKEA aims to expand rapidly in Mexico and create more jobs to help the country’s economic recovery. The Swedish store has announced plans to expand its business even further through a smaller store format to reach less populated cities in the country.
Malcolm Pruys, Director of IKEA in Mexico, stated in a Forbes article: “We do not want anyone in Mexico to think that Mexico is different from anywhere in the world. We want Mexico to have the best, be it service, scope, price; we only want the best for our clients.” He also mentioned that to make its products more accessible, IKEA will test a smaller store format that could be viable in cities such as Toluca, Queretaro, Aguascalientes, Nuevo Leon and Tijuana, in addition to those already planned for larger cities such as Monterrey and Guadalajara. The goal is to not limit the brand, not even in places where there is a small population. To illustrate this idea, he stated that the company could open stores between 3,000 m2 and 30,000 m2, depending on the environment. In terms of sales, Pruys mentioned that the company is expecting that by 2023 internet sales will represent around 10 percent of the total sales in the country.
All these plans and additions to the brand will be introduced after the first store in Mexico opens, which will take place on Apr. 8 as previously mentioned by MBN. Having this many expansion projects before opening its first store in the country may seem accelerated but the company experienced great results just by opening its digital marketplace, with demand exceeding expectations by 1,000 percent. To date, IKEA has two officially planned stores. The first in the Oceania mall in Mexico City and another store in Puebla that will be ready during the first half of 2022.
Pryus also discussed some of the difficulties the company faced in terms of logistics due to the COVID-19 pandemic in the Forbes article. “There is a global transport crisis, and it is very difficult; we have more than 100,000 m3 of goods stuck in ports or in the ocean,” he says. Also, this represents a concern because it could give Mexican consumers the wrong idea about the brand.