Baltic Export, EU – Baltic States, Lithuania, Markets and Companies

“Everyone was really scared.  We anticipated Ikea’s coming with dread. However, I can say that not a single company has declared bankruptcy, or even felt any decrease in sales,” said Dalia Markevičienė, manager of the Baltic Furniture Centre (Baltic baldų centras), a union of a dozen furniture manufacturers and retailers, cites en.delfi.lt.

Furniture retailer Berry has no complaints either. Berry manager, Jaunius Žiogas, says sales have remained consistent. “Ikea’s arrival on the Lithuanian market has caused people to make comparisons in terms of production quality. However, those who buy cabinetry or cushioned furniture are returning to Berry stores. We are competitive on price and quality. We are also superior in terms of style, colour and functionality options, so this half-year we have not felt any decrease in sales,” he explained.

Markevičienė added that there are areas in which Ikea cannot compete with Lithuanian and Baltic companies. “The mattresses that Ikea sells are all one kind, while Lithuanian retailers have 20 to 30 different types of mattress. When it comes to kitchen furniture, and comparing Ikea’s prices, for example, with Latvian company Sigulda, [Ikea's prices] seem very high. So with its product offering and pricing, Ikea fails to compete with local companies.”

Berry manager, Žiogas, notes that, as expected, buyers have become more selective. However, the company prepared for this in advance – before Ikea came to the market – by expanding its range and offering free services.

“We now deal with furniture manufacturers across Europe and Asia, meaning we can offer a greater range of styles, from modern classics that older people love, to contemporary, trendier styles popular with a younger market. We have also reinforced our customer service. Our stores provide free consultations, helping customers choose furniture for small spaces or combine colours,” Žiogas said.

Markevičienė, manager of the Baltic Furniture Centre as well as Sigulda Furniture, said she discussed with colleagues why Lithuanian companies did not note any decrease in sales when Ikea came to their market. In her opinion, Ikea benefited from an increased demand for furniture, while local companies did not feel this advantage.

Meanwhile, Žiogas stated that when Ikea enters a new territory other companies’ sales usually witness a temporary decrease, prior to and following the opening, as consumers flock to discover the products of the new market player. Later, however, the market increases due to Ikea’s sales. “People are starting to treat furniture as a replaceable commodity; consequently the market is seeing marked growth,” Žiogas explained.

“If Lithuania repeats the experiences of Poland, Russia and other countries, in one and a half years’ time the furniture and interior accessories markets will have increased significantly. Local businesses will therefore have to continue making efforts to distinguish themselves from the powerful, global chains,” said Žiogas.