On the importance of investing in culture.
Our Media Analyst Alejandra Arango G highlighted Inter IKEA’s CEO, Torbjorn Lööf, latest Press Release on the brand’s move into Chile, Peru and Colombia as a franchise partnership with S.A.C.I. Falabella and subsidiary Sodimac Homecenter. Sodimac Homecenter is Chile’s home furnishing giant acquired by S.A.C.I. Falabella in 2003. Currently, they have a significant presence in Chile, Peru, Colombia, Argentina, Uruguay and Brazil.
INTO has been thinking about how strategic this partnership really is.
With more than 100 years of regional experience, Falabella has grown to be the biggest retailer in Latin America. Investment in cultural understanding and building on years of existing customer knowledge has made Falabella a popular middle-class shopping destination across the Andean region . Notably, Falabella never rushed into expanding their stores and have been acknowledged for their continuous commitment to growing with local suppliers and brands instead of against them . Today, Falabella is experiencing positive returns as they take the lead on the region’s learning curve of boosting e-commerce like no other brand in the region .
From a global point of view, IKEA’s partnership with a retailer that is in tune with local cultures will be an enormous opportunity to get closer to the uncertain Latin American market and become the “beloved” brand Lööf expects it to become in the future. And, from a local perspective, this will hugely elevate the value proposal of Sodimac Homecenter, as the construction sector is being reactivated in the region, and will turn out in completing its offering with IKEA’s.
INTO recognises this strategic play into the Latin American markets and we wonder who will be the next to realise the importance of investing in culture for market growth.