Ikea. Why la buy Swedish product? Malaysia made not good enough? Expensive? Lets we go thru the history of Ikea
IKEA history - how it all began
The following history shows how over six decades IKEA went from the woods of southern Sweden to being a major retail experience in 40 countries/territories around the world.
The IKEA story begins in 1926 when founder Ingvar Kamprad is born in Småland in southern Sweden. He is raised on 'Elmtaryd', a farm near the small village of Agunnaryd. Even as a young boy Ingvar knows he wants to develop a business.
1920s
At the age of five Ingvar Kamprad starts selling matches to his nearby neighbors and by the time he is seven, he starts selling further afield, using his bicycle. He finds that he can buy matches in bulk cheaply in Stockholm and re-sell them individually at a very low price but still make a good profit. From matches he expands to selling flower seeds, greeting cards, Christmas tree decorations, and later pencils and ball-point pens.
1943 - IKEA is founded by Ingvar Kamprad
When Ingvar Kamprad is 17, his father gives him money as a reward for succeeding in his studies. He uses it to establish his own business. The name IKEA is formed from the founder's initials (I.K.) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village where he grew up. IKEA originally sells pens, wallets, picture frames, table runners, watches, jewellery and nylon stockings - meeting needs with products at reduced prices.
1945 - The first IKEA advertisements appear
Ingvar Kamprad's business outgrows his ability to make individual sales calls, so he begins advertising in local newspapers and operating a makeshift mail-order service. He uses the local milk van to deliver products to the nearby train station.
1948 - Furniture is introduced into the IKEA range
The furniture is produced by local manufacturers in the forests close to Ingvar Kamprad's home. The response is positive and the line expands.
1951 - The first IKEA catalog is published
IKEA founder sees the opportunity to sell furniture on a larger scale using a catalog. The IKEA catalog that we know today is born.
1953 - Furniture showroom opens in Älmhult, Sweden
This is an important moment in the development of the IKEA concept - for the first time customers can see and touch IKEA home furnishings before ordering them. The showroom is born out of a price war with a main competitor of IKEA. As both companies lowered prices, quality was threatened. By opening the showroom, IKEA clearly demonstrates the function and quality of its low-price products. The innovation is a success; people wisely choose the products with the best value for money.
1956 - Designing furniture for flat packs and self-assembly
The decision for IKEA to design its own furniture stems, ironically from competitors pressure for suppliers to boycott IKEA. Exploration of flat packaging begins when one of the first IKEA co-workers removes the legs of the LÖVET table so that it will fit into a car and avoid damage during transit. After this discovery flat packs and self assembly become part of the concept. To read more, please visit Our business idea.
1958 - The first IKEA store opens in Sweden
The first IKEA store in Älmhult has 6,700 square meters of home furnishings! At the time, it is the largest furniture display in Scandinavia.
Gillis Lundgren designs the TORE drawer unit
While visiting an IKEA kitchen manufacturer, one of the earliest co-workers at IKEA, Gillis Lundgren, notes the simple, practical storage ideas being used in IKEA kitchens and is inspired to apply the same thinking throughout the home. As soon as he gets back to Älmhult he sits down and designs the TORE drawer unit.
1959 - IKEA co-workers
The 100th co-worker joins IKEA.
Source: The IKEA Way - History
The key success of IKEA is their business idea. Imagine there is a grand total of 301 IKEA stores in 37 countries/territories. The IKEA Group itself owns 267 stores in 25 countries:
Australia, Austria, Belgium, Canada, China, Czech republic, Denmark, Finland, France, Germany, Hungary, Italy, Japan, Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Spain, Sweden, Switzerland, United kingdom and USA.
The other 34 stores are owned and run by franchisees outside the IKEA Group in 16 countries/ territories. These are Australia (2), the United Arab Emirates (2), Cyprus (1), Greece (3), Hong Kong (3), Iceland (1), Israel (1), Kuwait (1), Malaysia (1), the Netherlands (1), Romania (1), Saudi Arabia (3), Singapore (2), Spain (4), Taiwan (4), and Turkey (4).
However IKEA pricing in Malaysia a little bit expensive than other countries especially which I know in USA for example Alve Laptop Table in United States price is $69.99 whereas in Malaysia the price is RM 369.00.
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| IKEA Alve Laptop Table |
Like economist or business people always said do not compare the pricing by converting it the exchange, this is because the United States is said to have a per capita income of USD36,000, roughly five times Malaysia’s USD7,000 per capita.
However the their people are not five times richer than Malaysians in terms of purchasing power. In fact in certain cases the purchasing power is the same as Malaysians. According to the McDonald’s Hamburger Index, the Ringgit is the same as the US Dollar in purchasing McDonald’s hamburger – one Ringgit will buy in Malaysia what USD1 will buy in the US. Yes, purchasing power may differ for different countries.
One way to compare apple-with-apple is to use the Big-Mac Index. However, this is not scientific nor accurate. Economist use the purchasing power parity (ppp) concept. Even if we actually convert the price it still cheaper in United States.
Compare with Others Option
Last week I saw kinda similar chair with IKEA's Moses Swivel Chair Black (RM149.00) at others store which suprisingly much more expensive and its not same quality.
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| IKEA Moses Swivel Chair |
Whatever it is I also considered the quality and practicality of the products in IKEA give and take it still reasonable and worth to buy it. The important thing is we need to plan and do budget before buying stuffs like furniture and electric appliance. When you know what to buy, you can plan ahead which items you need to watch in IKEA online price list. Some time when it near to festive season IKEA will have SALE and the price drop tremendously. If you don't have IKEA credit card, you may apply and if you have, use it to collect some points and also free coupon for drinks and food where you can buy at IKEA. Sometimes things like this help to control your spending or not? Ask yourself :)
Conclusion, yeah go for IKEA!
