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Swedish Furniture Giant IKEA to Establish $450m Retail Center, Warehouse in Hanoi

The warehouse and retail center is expected to become IKEA’s main supply hub for its Southeast Asian market.

According to Inside Retail Asia, Nguyen Duc Chung, chairman of the Hanoi People’s Committee, recently told a conference held by the Ministry of Industry and Trade that IKEA is in the advanced planning stages of setting up operations within Vietnam.

“At present, all parties involved are [in] the process of negotiation,” Chung said.

The center, which will cost an estimated US$450 million, is expected to boost IKEA’s e-commerce trade in Southeast Asia.

Rumors of the Swedish giant’s Vietnam entrance started as early as 2015 when Mike King, the retail manager of IKEA Singapore, Malaysia and Thailand, told Thai newspaper The Nation that his company was interested in launching stores in nearby Vietnam and the Philippines.

In 2017, IKEA Chief Executive Officer Torbjorn Loof stated in an interview with Bloomberg that South America and Southeast Asia were the top two regions on IKEA’s expansion radar.

Founded in 1943, IKEA currently has more than 400 stores in 49 markets across Europe, North America, the Middle East, Asia and Australia.

With the success of companies like Lazada, who set up a 4,000 square meter warehouse in Da Nang last year, Vietnam has increasingly been viewed as a potentially profitable location for retailers. 

[Photo via Fortune]

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