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Saturday 23.06.2018 | Name days: Līga

Lithuania shows Estonians how to make use of IKEA

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Lithuania’s furniture industry has once again taught a lesson to Estonia of how to make use of such giant clients as IKEA also during the crisis period. Out of 30 main Baltics suppliers to IKEA, the major part is taken up by Lithuania, while Estonia supplies a very little share, reports the Estonian newspaper Aripaev.

Although Estonia is aware that it is very important to attract strong clients, promoting export and restructuring economy, their collaboration with IKEA has not been successful, despite the word-wide company has launched 12 new stores in 7 countries this year and manages 280 stores in 26 countries in total.

«One of the reasons is that there are different basic costs in Lithuania, however what matters is also the fact that Lithuanians tend to think on global-scale more than Estonians. They have had a king after all, they Catholics, with completely different mentality and bigger enterprises already from Soviet times,» says one of the leading Estonian furniture producers Priit Tamm.

«I believe it is already way too late for Estonia to collaborate with IKEA,» says Tamm.

Invest Lithuania senior analyst Dalius Simenas informs IKEA is of major importance for Lithuania furniture industry. «Before the crisis, furniture producers earned one third of export revenue thanks to IKEA. The tendency has been ongoing also in the first half 2010,» points out Simenas.

He says such export helps producers to cover for their domestic loss. «During difficult times consumers in both Europe and North America prefer cheap but qualitative furniture. There are tens of furniture producers in Lithuania developed thanks to IKEA

Statistics prove the fact – Lithuanian furniture and interior design goods export has increased by 11%, while Estonia experiences only 4% climb. Latvia reports 3% drop. During the crisis export fell by 15% in Lithuania, 18% in Estonia and 33% in Latvia.

Tamm says six to seven years ago Estonian furniture industry supplied IKEA, but when the client decided to transfer its factory to cheaper states, local furniture producers of Estonia started to look for other clients and develop their own brands.

According to Tamm, being a supplier for IKEA in Baltics means working only for them, accepting their business structure and philosophy reflecting the values of the company, «Becoming IKEA supplier means huge amounts of work that has to be managed well.»

Estonian producers tend to complain about IKEA costs and prices, as collaboration with them requires huge investments also from the supplier,» informs Tamm.

Estonian company Tramel informs they have considered cooperating with IKEA, but they required lower prices each year,  «If you do not agree, they conclude an agreement with someone else. We have made this mistake twice already.»

What is good is that IKEA store could be opened in Lithuania. IKEA spokesperson said they do not plan opening a store neither in Estonia, nor Latvia, while it could be launched in Lithuania in three to five years time.

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  1. says:

    Estonia – lesson learnt….

  2. Estella says:

    I feel so much happier now I undertsnad all this. Thanks!

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