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IKEA stumbles into S. Korean market, under probe for overcharging

November 24, 2014

A bird’s-eye view of IKEA Korea’s first South Korean store in Gwangmyeong, south of Seoul. It is scheduled to open on Dec. 18. (Yonhap)

Since IKEA announced its entrance into the South Korean market back in March, the Swedish furniture company has been stepping on consumers’s toes.

The first stumble occurred immediately after it launched its Korean online store on Nov. 14.

With the heavy anticipation among locals came a wave of scrutiny. Users quickly identified the significantly higher prices on the Korean site in comparison to the U.S. site.

Some costs were inflated so much that the prices were doubled.

The South Korean government’s antitrust regulator said Monday that it will inspect IKEA Korea to check whether it will be charging consumers more here than it does in other countries.

It plans to provide IKEA Korea’s product pricing information to Korean customers early next year to conduct a joint survey with a consumer rights group.

IKEA Korea Sales Manager Andrew Johnson told reporters last week that all the Korean prices were set after the company took logistics costs, exchange rates, customs and value-added taxes into account.

As expected, IKEA’s Korean Facebook page received demands for explanations regarding the price discrepancies, but the company has yet to make a public statement in response to the criticisms.

“I will never, ever visit,” said one user Ki Yun-jung.

Ki elaborated that the company had lost credibility in what seemed like a manipulative tactic.

In a separate incident, IKEA managed to upset the South Korean public in a culturally insensitive oversight.

The company offered a world map as one of its available products, only to label a body of water known as the East Sea to Koreans, as the Sea of Japan.

Again, Facebook users were quick to show disappointment.

“Calling it the Sea of Japan…my hopes were so high for IKEA, but now, I just give up,” wrote Yoon Dong-sung on the same Facebook page.

With its first 25,759-square-meter store almost finished with construction, the Swedish company’s public relations team only has a few weeks to clean up its image.