Direct Speech, Lithuania, Markets and Companies

International Internet Magazine. Baltic States news & analytics Tuesday, 21.09.2021, 05:44

Ikea will not cause revolution in Lithuania

BC, Vilnius, 12.08.2013.Print version
Swedish giant's Ikea store launch planned on August 14 is fuelling discussions about allegedly possible furniture manufacturer bankruptcies and falling prices. However, analysts are skeptical about such ideas. According to them, more significant negative impact might be felt only by those that sell cheap products lacking in quality, reported LETA/ELTA.

"There will be no revolution or disastrous consequences," Giedrius Romeika, Head of Kaunas' Region Small and Medium-Sized Enterprise Association, told daily Lietuvos Zinios. He had no doubts that at first the store will attract people out of their curiosity, but later the market will settle down.

Sigitas Besagirskas, Director of the Department of Economics and Finances at the Lithuanian

Confederation of Industrialists, said that Lithuanians tend to exaggerate when new major companies enter the market. Newcomers have never turned the Lithuanian market upside down. "I do not think that Ikea will have a negative effect on other participants of the market. Of course, the competition will increase and some might withdraw naturally," he said.

According to Besagirskas, Ikea will first of all have an effect on manufacturers and retailers of cheap furniture who have no clear specialization, as Ikea goods are rather cheap and are not in the segment of high quality products.

"It is the product that Lithuania (e.g. small or medium income families) needs. Those who aim at this segment will feel quite high competition. Meanwhile, those who offer exclusive and individual products will notice smaller competition, if any at all," said Besagirskas.

The specialists noted that major furniture retailers are not worried as they can easily outrival Ikea in prices and quality. "No matter how big Ikea store is, it is just one store, while there are plenty of furniture buyers all other the country. Taking into account transportation and fuel costs, even the cheapest item will not be so cheap the farther from Vilnius it has to be delivered," said Romeika.

Besagirskas also stated that Ikea will manage prices in Lithuania in such manner that it would not be feasible to buy in Polish Ikea. He noted that prices differ insignificantly and it is not worthwhile to travel to Poland chasing for several percent cheaper products but lose out when paying for delivery.

Nevertheless, company Zumi which delivers products to Lithuania from Ikea/Janki shop in Poland, said it will monitor the market for some time and only then plan further activity. Company's Director Robert Butko was doubtful whether Lithuanians will turn away en masse from Ikea products offered in Poland. Therefore, so far there were no plans to start selling Ikea products to people from other countries, for example, Belarus.

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