Swedish furniture maker Ikea is putting in P7 billion (S$183 million) worth of initial investments for its biggest store in the world, which will open in Manila in the end of 2020.
Ending years of speculation tracing back to early 2013, company officials held an official launch at the Mall of Asia (MOA) on Tuesday, the same place where Ikea will make its first home in the Philippines.
It will be located at the MOA Complex in Pasay City, after the company sealed a long-term lease agreement with SM Prime Holdings Inc., making the company the "largest anchor tenant" in MOA.
This was confirmed by SM Prime in a disclosure to the local bourse also on Tuesday, noting that it would be constructing the mixed-use building that would house the first Ikea store in the country. SM did not say how much is invested to put up the building.
The largest Ikea store in the world will cost P7 billion worth of initial investments for its retail operations, mainly "to fit out, stock, market and staff the first store for its opening," Ikea Southeast Asia said.
The global retailer enters the market through a franchise agreement led by Ikea Southeast Asia, the franchisee who also owns and operates seven Ikea stores in Malaysia, Singapore and Thailand.
The first Ikea store in the country, as part of a "long pipeline" of projects, will cover around 65,000 square meters (sq m), almost double the size of a typical 35,000-sq m Ikea store.
With this size, it will be larger than the one in South Korea, which previously held the title of being Ikea's biggest store in the world, according to Christian Rojkjaer, managing director of Ikea Southeast Asia.
Ikea Southeast Asia said the building-which it compared to the size of around 150 basketball courts-would include a call centre and a "supersized" warehouse to accommodate e-commerce operations.
"It's because we have more confidence here," Rojkjaer told reporters, when asked why the company chose the Philippines.
He said the warehouse is a big part of the project, which he said would allow consumers to take their purchases home immediately.
In separate interviews, company officials from both Ikea Southeast Asia and SM hinted that this could not be the only Ikea store in the country.
Steven Tan, chief operating officer of SM Supermalls, echoed this during the question and answer forum of the event when asked if Ikea would also be brought to the countryside.
"We will see definitely. This is a marriage without divorce," he said.
Around 9,000 products will be featured in the store, which "will have everything people need for their home under one roof," the company said in a statement, adding that it has pre-opened its local website for further information on its catalogue.
There are also hundreds of products that will help people live a more sustainable life at home, ranging from affordable LED lights to recycling solutions, the company said.
"A typical Ikea store includes more than 55 inspirational room settings. The self-serve warehouse has flat-packed products ready to be taken home the same day. Parents can drop off kids at a supervised playroom and there is also a restaurant with meals for the whole family," the statement read.
For its part, SM said the mixed-use building will add more than 121,000 sqm to the SM Prime's growing footprint. Ikea will get more than half of it.
Ikea's name spells out the initials of its founder, Ingvar Kamprad (IK), and the first letters of the farm and village where he grew up - Elmtaryd and Agunnaryd (EA), according to Ikea's official website.
The global brand hails from Sweden, building its name in the span of decades with more than 400 stores in 50 countries. Now, it has found its way to the Philippines.