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BEIJING - Sweden's Ikea says the contribution from Asia-Pacific to the group's total sales could triple to 10 per cent in five to six years, creating a huge challenge for the world's largest furniture retailer.
Ikea plans to add six new stores in the Asia-Pacific region next year - three in China and three in Japan - on top of the nine stores the Ikea Group now manages in the region.
The group also has eight stores in Asia operated as franchises in Taiwan, Singapore, Malaysia and Hong Kong.
That expansion will help sustain already strong Asia-Pacific revenue growth, said Ian Duffy, Ikea president for Asia Pacific.
Forecast revenues for this year are nearly US$27 billion ($38.4 billion), and Ikea expects to keep up its pace of 20 new store openings a year.
Duffy did not break down the revenue figures and was coy about the profitability of Ikea in China.
"We are ahead of our financial ambitions that we put in place in 2002," he said, referring to the year he arrived in the region.
China has one of the world's fastest growing economies and is Asia's largest retail market after Japan, growing 14 per cent annually. That growth in domestic wealth is attracting foreign players.
Home improvement chain B&Q, owned by Britain's Kingfisher, last year opened 10 new stores in China, increasing overall sales by 41 per cent, more than doubling the US$50 billion market's 15 to 20 per cent growth.
Moreover, the fast growth in China could accelerate in two or three years as Ikea's footprint spreads.
"When we have 10 stores it would be possible to work on building four or eight new stores at the same time," he said.
But the fast growth is new to Ikea.
"We face the increasing challenge of growing rapidly and at the same time having to keep our existing business in the best possible shape."
- Reuters
