Concerns are mounting over Ikea's domestic business strategy more than 10 years after it entered Korea. As its performance growth slows, speculation about an exit and labor-management disputes have piled on. With limits emerging in its early expansion model centered on massive suburban stores, it is expanding urban stores in department stores and outlets.
According to the industry on the 26th, Ikea Korea will open the country's largest urban store in Daegu next month. Following Lotte Department Store Gwangju in Nov. 2025 and Hyundai Premium Outlet Songdo last month, the third urban store will be located at the Shinsegae Department Store Daegu branch.
Since 2024, Ikea has tested urban demand by operating pop-up stores at The Hyundai Seoul, Daegu, Pangyo, Yongsan I'Park Mall, and Starfield Hanam. As of June this year, cumulative pop-up transaction volume was about 1.42 million. Online sales outside the Seoul metropolitan area, including regions where pop-ups operated, also increased by about 30% from a year earlier.
Starting with Gwangmyeong in 2014, Ikea expanded in Korea with the so-called "blue box" strategy of building massive standalone stores in suburbs such as Goyang and Giheung. Its unique shopping experience—browsing large showrooms and then finding products directly in the warehouse—drew attention in Korea.
There are currently five large stores in Korea, with no plans for additional openings. It is difficult to keep increasing large stores that require wide sites and massive investment, and there are also accessibility limits as shoppers must drive to the outskirts.
Since 2022, Ikea has sought ways to increase customer touchpoints beyond large stores. At the time, due to the impact of COVID-19, store visitors fell by about 5% from the previous year and sales dropped 9%. Ikea then expanded temporary stores outside the Seoul metropolitan area and Busan and rolled out a strategy to strengthen an omnichannel that links online and offline.
In recent years, the way domestic consumers buy furniture has changed. As online interior platforms such as Ohouse grow, it has become routine to compare multiple brands and order online. Domestic companies such as Hanssem and Ilroom are also expanding their online malls and strengthening services such as consultations, delivery and installation, and after-sales service (AS) to secure loyal customers.
Ikea has secured price competitiveness based on DIY (Do it yourself) and self-service, in which consumers find, carry, and assemble products themselves. Even online, delivery times and prices vary by product type and delivery method, and assembly and installation services must be used separately, which differs from the furniture purchasing methods familiar to domestic consumers.
After posting its first contraction eight years after entering the Korean market in 2022, Ikea has not shown a clear rebound. Based on the 2025 fiscal year, sales were 639.3 billion won, up 2.2% from the previous year, but short of the record high of 687.2 billion won in 2021. Operating profit was 10.9 billion won, down 41.6% from the previous year.
Early this year, as the withdrawal of a Pyeongtaek logistics center development plan and delays in opening new large stores coincided, exit rumors surfaced, which the company denied. Last month, it faced a government probe over alleged demotions and pressure to resign for employees returning from parental leave. As the controversy spread at the time, President Lee Jae-myung also criticized Ikea's conduct.
Ikea plans to find a breakthrough by linking urban stores and online. Urban stores will focus on product experiences and home-furnishing consultations rather than carrying all items, and will connect actual purchases online. In step with the expansion of online purchases, delivery options have been segmented into "arrives tomorrow," "saver," and "custom," and it has expanded pickup services in which customers receive online and phone orders at stores.
Meanwhile, Ikea said the same day it will cut prices by an average of 15% on 161 products, including bestsellers. However, considering raw material prices, logistics costs, and exchange rates, it will keep existing prices for 8,110 of 9,104 products (89%) and raise prices for 754 (8.3%).