On
December 18th 2014, IKEA, the world's largest furniture
retailer, opened its first Korean branch in Gwangmyeong, Gyeonggi Province.
The store is 25,759 square-meters (approximately 277,267 square-feet)
in size and it is accessible via train
and three inter-city express highways.
It
would appear that IKEA's business is booming. So much so that the
THREE
inter-city express highways that lead to IKEA are congested with cars
– all of them customers who want to buy their next furniture item
from IKEA.
Apparently,
doing well in business is not always a good thing. A little over two
weeks after IKEA opened its doors to the public, the Gwangmyeong
Municipal City has demanded that IKEA come up with a “dramatic
breakthrough” by January 7th
2015 to resolve the problem of the congested roads. The municipal
government threatened that if IKEA fails to come up with a solution
by that date, the government would withdraw the temporary approval
that it gave to IKEA to operate in its city, thus forcing IKEA to
shut its doors starting on January 15th
2015.
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The
Gwangmyeong Municipal City is also pressing the central government to
have IKEA registered as a large-scale discount mall, which is
currently registered as a mall specializing in furniture. This
registration change would force IKEA
to shut
its doors twice a month on weekends.
Never
mind the fact that the Seoul High Court already ruled that that
particular regulation was unlawful
because “it was difficult to judge if the rules actually helped
smaller retailers while limiting consumers' choice at the same time.”
What
is the government proposing that IKEA does? Should IKEA stop being a
furniture retailer for a few years and re-brand itself as a
construction company that specializes in road expansion? Or should it
be a railroad company that focuses on adding and updating Korea's
railway system? Or should it be forced to expand its already huge
parking lot, which can house up to 2,000 vehicles?
Or
should IKEA be forced to raise its prices? That way, consumers will
just stop going to IKEA. Oh, wait. IKEA was already investigated
by the Fair Trade Commission for “charging South Korean
customers more than it charges buyers in other countries” even
before it opened!
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President
Park Geun-hye can wax poetic about transforming Korea into a creative
economy until her face turns blue. The reality that is Korea's
economy says that the government's rhetoric is just that. Considering
the latest attack on IKEA, the Seoul Metropolitan Government's
persecution
of Uber, Korea's ridiculous
tariffs on agricultural imports, Korea's inability to overturn
its anachronistic
internet laws, Koreans' overall mercantile mindset, and many other illiberal and anti-globalization
tendencies, it is hardly surprising that half
of all foreign firms based in Korea plan on leaving Korea sooner
rather
than later.
Charles
de Gaulle was purported to have once said, “Brazil is the
country of the future... and always will be.” Though I am not sure
if Charles de Gaulle really did say it, regardless of the authenticity
of the source, I cannot think of a more curse-like compliment than
that. After all, it is another way of saying that an entire country
is forever
destined never to fulfill its huge potential.
Unless
there is a real structural economic reform and a genuine change in
the Korean people's attitudes about free trade, and soon, there is a
good chance that that epithet will not apply only to Brazil.
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