Nitori Co., dubbed Japan's IKEA, is slated to open its first store in South Korea next week, accelerating its Asia-centered expansion push, while suffering from declining sales in Japan and the US.
The store opening in Korea comes just a few months after it launched its first outlet in Thailand.
It is now preparing to enter other parts of Asia, including Vietnam and Indonesia, after suspending its US operations this year amid deteriorating profits there.
Japan’s largest furniture and household goods brand, Nitori has already advanced into China, Taiwan, Malaysia and Singapore.
“We plan to open 10 stores in Korea by next year,” its Korea head Onuki Keigo said at a news conference on Thursday, when he announced the store launch slated for Nov. 23.
“With the number of single-person households rising in Korea, we thought our product would fit their needs. . . . We will also consider opening standalone stores like in Japan.”
The Nitori logo on a billboard Nitori aims to triple sales and store numbers in Korea within 10 years.
That goal is in line with its ambition to increase its total store count from the current 902 to 3,000 by 2032, driven by new store openings overseas. It expects the number of store openings overseas to exceed those in Japan.
In Korea, it has been developing products in collaboration with E-Mart Inc. under the brand The Life, after its earlier 2015 attempt to enter the country failed.
Nitori’s first store in the country is located inside an outlet of E-Mart, Korea’s largest supermarket chain, in northern Seoul.
ONLINE SALES
Last year, it ventured into the country’s online market in partnership with Coupang Corp., a leading e-commerce platform. Coupang directly imports Nitori products as its exclusive online vendor in Korea and will continue to serve as Nitori’s major online platform in the country.
An IKEA outlet in Goyang, northwest of Seoul As in other countries, it will compete head-on with IKEA. The Swedish furniture brand runs spacious stores in Korea with plans to open more in the coming years.
Another Japanese home furnishings supplier, MUJI, will also pose a challenge to Nitori.
The Sapporo-based Nitori has achieved operating profit growth over each of the past 37 years.
Earlier this year, however, it decided to temporarily withdraw from the US market after Washington sharply raised tariffs on imports from China, Nitori's largest manufacturing base, which dented its operating margins.
In fiscal year 2022 ended in March, Nitori Holdings posted 948.1 billion yen ($6.3 billion) in net sales and 144 billion yen in operating profit. That is up 16.8% and 1.5%, respectively, from the previous year.
