Right from the opening, Ikea has gained great popularity– with an average attendance up to 40,000 people. An electronic queue management system has been installed and people are ready to wait for hours. “Our close relationship with Ikea began in 2006/2007 after their office opened in Ukraine and we still continue to cooperate. We were on the verge of making deals several times, but it was only at Blockbuster Mall where we could manage to bring it to the opening. The time we have spent for all of this is about five years starting from the initial interest in Ukraine to the store opening,” commented Vitalii Boiko, CEO and founder at NAI Ukraine.
As the part of the NAI Global, NAI Ukraine is a leading Ukrainian broker which provided information about actual situation on the market as well as projects that were in development. The move of the office on development decision-making from Moscow to Belgrade, the launch of iconic “entry projects” in Ukraine, and objective information about retail turnover allowed Ikea to make the decision to enter the market. Thanks to this, NAI Ukraine is confident that the company is bound to succeed.
Situation in Ukraine has changed in a big way
Talking about success, it is worth mentioning that thanks to Ikea Blockbuster Mall has acquired a powerful anchor store that attracts tens of thousands of visitors. The mall’s GLA amounts to 200,000 sq m with over 500 stores. There is ample parking for 5,00 cars, and the catchment areas comprises 3 million people. Blockbuster Mall includes Europe’s second-largest indoor entertainment park, an IMAX cinema, a 10,000 sq m hypermarket, a soon-to-break food court, and has one of the best locations at the intersection of the largest motorways near the city center.
H&M had a similar experience and it took NAI about ten years to bring the brand to this market. Now, they have several stores in Ukraine with a turnover that significantly exceeds their expectations. “Speaking of Ikea, we’d like to note that our goal was not so much to get a large tenant but, first of all, to prove that the situation in Ukraine has changed in a big way. Both H&M and Ikea are zero-tolerance companies when it comes to corruption. Therefore, them entering the Ukrainian market clearly indicates that the market is healthy,” Boiko adds.
Kiev on par with Munich and Cologne
Boiko continues, “In our practice, we feel that the potential opportunities for entering the Ukrainian market have changed radically for other retailers with H&M’s and Ikea’s presence on the market. These are the most reputable brands in the eyes of other retailers and they helped to change the unattractive image of the Ukrainian market. The most important thing that happened is not the opportunity for Ukrainians to buy Ikea products, but that this market is officially considered to be civilized after launching these brands on the Ukraine.”
For five years in a row, Ukraine was one of the top five countries in Europe in terms of retail sales growth, along with Germany, Netherlands, Belarus, and Norway (4% to 10%). Since 2019, Ukraine’s performance has outpaced even the largest economies in the Eastern Europe. If one compares the volume of retail trade in Kiev with the largest agglomerations in Germany, Kiev will take its position among cities like Munich or Cologne.