IKEA entry into Ukrainian market may be "costly" for domestic producers – expert

"Ukrainian furniture manufacturers have no such professional expertise in design. There is no such level of purchasing capacity and manufacturability that allow minimizing costs," Gut told Novoye Vremya.

He says that Ukrainian producers work mainly in the low-price segment. The entire furniture market turnover in Ukraine was estimated at about UAH 2 billion (US$71.6 million) in three quarters of 2017, according to the State Statistics Service of Ukraine. For comparison, the turnover of IKEA in 2017 was over EUR 38 billion (UAH 1.3 trillion).

"IKEA is like an icebreaker that turns markets upside down. It will break old business models in Ukraine," the expert said.

Read alsoSwedish IKEA mulling over entering UkraineHowever, the emergence of the Swedish company may also be a chance for Ukrainian producers. The fact is that IKEA manufactures only 10-15% of what it sells. So, domestic furniture makers will have to meet the company's high standards and learn how to produce environmentally friendly and inexpensive products, he added

As UNIAN reported earlier, IKEA, one of the world's largest retail chains for design and sell of ready-to-assemble furniture, kitchen appliances, and home accessories, might open its first store in Ukraine within one or two years.