Philippines: A retailer’s nightmare.
As an archipelago nation of 7,107 islands, retail expansion is exceedingly difficult in the Philippines because:
- Key urban cities are separated by hours of air/sea travel.
- Key cities are extremely congested and public transportation is underdeveloped.
- New entrants & independent retailers are threatened by the few major retail players that have stronger leverage for expansion.

Filipinos: What’s near me will win me.
More than quality or affordability, the key business driver of the home furnishing category is accessibility. Top players win through a large retail footprint or distribution in malls nationwide. Challenged with mobility in highly-congested cities, Filipino shoppers default to whatever store is nearest to them.

E-commerce: A rapidly emerging channel.
73% of the home furnishing category comprises miscellaneous players, mostly mom-and-pop vendors in e-commerce platforms. E-commerce, led by Shopee and Lazada, was quickly becoming a key channel for home furnishing shopping.

Altogether, IKEA Philippines’ prospects for growth was challenging, given the logistical constraints against physical expansion and the mental availability taken up by its offline and online competitors.