Ikea promises low prices in Thailand

It will open its first Bangkok store _ its largest store in Southeast Asia _ next November as part of the new Mega Bang Na shopping centre.

Ikea franchisee Ikano Retail Asia will uphold its parent company's principle of supplying functional home furnishings at affordable prices.

The company, as required by Ikea, will only be able to sell a tiny proportion of domestic products, which will account for just 2% of items. The rest will be imported, casting doubts on how it can maintain low prices in a market where extensive cheap furniture is available.

Lars Svensson, deputy store manager at Ikea Bang Na, said low prices could be achieved due to the company's bargaining power as it has over 300 stores worldwide.

"With more stores, we bring down prices because of economies of scale," he said. "With import tariffs, life is not easy for us, but we have to fulfil our commitment to consumers."