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Ikea To Go Online, Move Could Impact Kogan Expansion Plans

Ikea is set to launch their first online operation in Australia a move that will see the giant Swedish retailers selling appliances, kitchens and electrical goods as well as furniture up against the likes of Kogan who is also known to sell flat pack furniture goods.

The site is set to go live by the end of 2016, ahead of the launch of a global online platform within the next two years.

Fairfax Media said that Ikea Australia will establish on online portal within the next six months and start testing different fulfilment models in several urban locations.

Country managing director David Hood believes the online store could eventually become Ikea’s largest outlet in Australia, where sales will rise around 20 per cent this year, passing the $1 billion mark for the first time.

Currently IKEA ranges several house brand appliances but this could be expanded when the Company goes online in a move that could also impact Aldi appliance sales.appliances

Ikea currently sells online in 13 of the 28 countries in which it operates and generated only €1 billion ($A1.5 billion) in online sales last year, 3 per cent of global sales.

Currently the Company is developing a single global e-commerce platform due to be rolled out within the next two years and global chief executive Peter Agnefjaell hopes to boost online sales to 10 per cent of total sales by 2020.

Ikea’s online store in the UK, for example, has become the largest outlet in the country, without cannibalising sales from existing stores.

Mr Hood expects similar results in Australia.

Fairfax Media reported that crucial to Ikea’s online ambitions is a $155 million 70,000 sqm multi-function distribution and logistics centre currently under construction at Marsden Park in Sydney’s west and due for completion around March or April next year.

The solar-powered distribution centre, which uses high-bay storage technology with robotic pallet storage and retrieval cranes, has capacity for 100,000 pallets and will enable Ikea to increase the number of products stocked in Australia from 1300 to almost 9000, cutting the time it takes to ship orders to stores, pick up points or directly to online shoppers.

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