Ikea, a Swedish home furnishing brand, is set to launch a new store in Chiang Mai on Feb 27, marking its fifth location in the country.
Ikea Thailand recognises that customers prefer to shop in their neighbourhoods, said Leonie Hoskin, retail manager of Ikea Thailand and Vietnam.
Despite the rise of online shopping, the company views physical stores as essential, as customers value the experience of seeing, touching and trying products.
Ikea operates four stores in Thailand, with branches in Bang Na, Bang Yai in Nonthaburi, Phuket, and Phrom Phong in Bangkok.
Ms Hoskin said e-commerce sales in Chiang Mai rank highly in places without physical Ikea stores.
With a strategy to be more accessible for Thais through offline and online channels, the company decided to expand into Chiang Mai.
The new Ikea store is part of a collaboration with Decathlon, CP Future City Development Corporation Limited (CPFC) and C.P. Group affiliates including CP AXTRA, CP All, and TRUE, introducing the "Life Xpress" retail concept.
Located in Makro Hang Dong, Chiang Mai province, this first Life Xpress will feature shops from brands such as Decathlon, 7-Eleven, TRUE and Thailand Post.
Spanning more than 700 square metres, the new branch is called an "Ikea Order Point".
It will provide customers with over 300 cash-and-carry items, storage solutions, expert design consultation and planning services, along with a complimentary Click & Collect service for online orders.
Moreover, the store will feature a Swedish Bites corner, serving Swedish-style snacks and treats such as ice cream, cakes, hot dogs and pick-and-mix jellies.
The company has invested around 15 million baht in this project, she noted.
The new store aims to serve existing customers and attract new customers such as small businesses in the area.
Ms Hoskin said this model will be tested in the market, and if it is successful the company will consider further expansion beyond Bangkok.
The company is considering market potential in provincial cities such as Nakhon Ratchasima, Khon Kaen, Rayong, Surat Thani, and Hat Yai in Songkhla, she said.
Ms Hoskin said the launch of new stores in Thailand over the next 3-5 years will largely depend on Thai economic conditions, which she currently views as challenging.
"We will grow in alignment with the country's economic conditions," she said.
On the positive side, she mentioned the ongoing recovery of the tourism sector in Thailand.
In response to the decline in customer spending confidence, Ikea Thailand has lowered prices on more than 1,000 products by an average of 25-30%. This move is designed to support customers during these tough economic times, Ms Hoskin noted.
