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E-commerce

How IKEA is helping the competition

IKEA launched its long-awaited e-commerce site in Tasmania last week, the first step in a gradual roll out of the online store to every state in Australia over the next year.

It’s a development that online Aussie furniture retailers have welcomed.

“We welcome the offline stores taking e-commerce more seriously,” Temple & Webster CEO Mark Coulter told Internet Retailing. “They can do a lot to help raise the awareness of the convenience and other benefits of online shopping, and we will do much better when the entire category grows.”

Just over four per cent of furniture sales are made online in Australia, compared to about 11 per cent in the US and about 14 per cent in the UK.

Ivan Lim, CEO and co-founder of online furniture retailer Brosa, says there’s a lot of room for growth in the market. “A lot of customers are looking for digital experiences now. They don’t want to have to go to a showroom and talk to people and spend the whole day out,” he told Internet Retailing.

This is reflected in the launch of Plush’s e-commerce site earlier this year. But even as big furniture retailers are waking up to the fact that customers don’t need to see a product in person before purchasing, Lim isn’t worried about losing market share.

“While we don’t have Swedish meatballs or Lingonberry jam in our product line, we’re a digitally-native and technology-focused team that are experts in e-commerce execution,” he said.

“It’s like comparing THE ICONIC with MYER, Vinomofo with Dan Murphy’s. Being able to deliver digitally native experiences isn’t easy and we’ve been building our platform since day one.”

Brosa may have a head-start on the furniture giant in the Australian online market, but IKEA isn’t completely new to e-commerce. The company has been selling products online in other countries for years.

Based on its experience in other markets, IKEA expects e-commerce to represent at least 10 per cent of the sales mix over the next three to five years and eventually become the company’s largest store in Australia, according to a statement IKEA Australia country manager David Hood made to the AFR.

The Swedish furniture and homewares giant reported around €3.2 billion in sales in Asia and Australia in the previous financial year.

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