Sweden's IKEA said on Friday the contribution from Asia-Pacific to the group's total sales could triple to 10 percent in 5 to 6 years, creating a huge challenge for the world's largest furniture retailer.
It's possible, Ian Duffy, IKEA president for Asia Pacific, told Reuters in an interview.
That is very significant, and the group is growing as well.
IKEA plans to add six new stores in the Asia-Pacific region next year -- three in China and three in Japan -- on top of the nine stores the IKEA Group now manages in the region.
The group also has eight stores in Asia operated as franchises in Taiwan, Singapore, Malaysia and Hong Kong.
That expansion will help sustain already strong Asia-Pacific revenue growth, said the 20-year IKEA veteran.
You can say Asia-Pacific turnover will double this year, he said ahead of Reuters China Summit next week.
Forecast revenues for this year are nearly $27 billion, and IKEA expects to keep up its pace of 20 new store openings a year. The executive did not break down the revenue figures and was coy about the profitability of IKEA in China.
We are ahead of our financial ambitions that we put in place in 2002, he said, referring to the year he arrived in the region.
The group and I are very satisfied with the performance of the last few years.
China has one of the world's fastest growing economies and is Asia's largest retail market after Japan, growing 14 percent annually. That growth in domestic wealth is attracting foreign players.
Home improvement chain B&Q, owned by Britain's Kingfisher, last year opened 10 new stores in China, increasing overall sales by 41 percent, more than doubling the $50 billion market's 15 to 20 percent growth.
Moreover, the fast growth in China could accelerate in two or three years as IKEA's footprint spreads.
When we have 10 stores it would be possible to work on building four or eight new stores at the same time, he said.
But the fast growth is new to IKEA and posing challenges. We face the increasing challenge of growing rapidly and at the same time having to keep our existing business in the best possible shape.