IKEA: The Cheapest Way to Buy Furniture?

As a cost-conscious consumer, you might be considering IKEA as your next destination for a cheap furniture shopping. But is it really that affordable? Our research shows that IKEA might not represent the cheapest deals for home furnitures in the Singaporean market. Below we discuss our findings and some advice to help you bring down the cost of your home refurbishing project.

You may be overpaying for IKEA's furnitures

We've found that IKEA can be about 24% more expensive for 22 types of furnitures we quoted from Furnituremart, Lazada, FortyTwo, and HipVan. The surveyed products include wood, plastic, and steel-based furnitures like wardrobes, drawers, and dining tables that are commonly found in a Singaporean home. For some furnitures like sofa, the price difference found in one size of a furniture (e.g. 1-seater sofa) tended to persist across other sizes (2-, 3-seaters and so on).

Wardrobe

IKEA tended to be more expensive for small to medium sized wardrobes under the width of 200cm. In the three categories of 50-99cm, 100-149cm, and 150-199cm, IKEA's wardrobes were about 90% more expensive than those from online retailers like FurnitureMart and Lazada. For larger sizes of over 200cm, IKEA offered competitive prices compared to its five other peers we've surveyed.

Sofa

From 2-seaters to 4-seaters, IKEA's sofas were consistently priced higher than most of its peers in the market. Not only that, the price per unit volume (cubic cm) of the furnitures was also higher for IKEA. While this metric does not fully capture the value of a sofa as other things like the quality of materials matter, we did our best to compare products that were most similar in their style and material. Overall, we think this juxtaposition reveals how much premium you have to pay for similar types of sofas.

Drawer

IKEA offered cheaper prices for 3 out of the 5 types of drawers we surveyed by the number of doors. These include 2-, 3-, and 6-door chest drawers, for which IKEA was about 18% cheaper. In contrast, retailers like FurnitureMart had 4- & 5-door chest drawers that were about 45% cheaper than IKEA's comparable drawers. While our research doesn't capture the entire furniture market, this result highlights the idea that you should do a thorough research of the marketspace in order to find the cheapest deal possible.

Bed Frame

Depending on whether or not a frame comes with storage spaces in the bottom, IKEA's prices showed mixed results when compared against other competitors. In general, IKEA's bed frames with storage were cheaper, but other sites and retailers had more affordable bed frames that do not come with storages. It should also be noted that the market for no-storage frames represents the lower-end space, and the price difference between vendors is not that significant. Therefore, we recommend that you base your choice not just on price, but on other factors like materials and durability for cheap, no-storage bed frames.

Dining Table

IKEA had a pricing advantage for smaller dining tables (4-chair and below), and was more expensive for larger dining tables (6-chair tables). For 4-chair dining tables, IKEA had the lowest price among the retailers we've sampled, over 50% lower than the next cheapest comparable product from FurnitureMart. For 6-chair dining tables, however, Lazada sold a cheaper table that was less than half the price of a comparable IKEA product. Although IKEA's dining tables with 4 & 6 chairs showed mixed results, IKEA offered unique 2-chair dining tables that are rarely found in other online vendors we surveyed.

IKEA furnitures come with hidden costs

While IKEA's furnitures are not the most affordable as discussed above, they also come with hidden costs that might raise your furniture budget. These include delivery costs of $55-90 as well as the installation fee of minimum of S$30 or 8% of your furniture value. Not only that, all of IKEA's furnitures come in flat boxes, which means you need to assemble them from scratch and be responsible for the loss if you don't assemble correctly. Such costs represent additional financial burden, so you should weigh your options carefully while looking for comparable products from retailers who offer free delivery & installation like FurnitureMart.

IKEA FAMILY Membership: Not a reason to spend more on IKEA

IKEA offers a loyalty program that gives special discounts and restaurant perks to its members. While these features are available to you for a minimum spending of only S$150, the low entry barrier also means that the benefit you get is not so great. For example, the current promotion for IKEA FAMILY members offers discounted prices on 19 furnitures, 7 of which are items priced above S$150. However, you can only purchase 2 furniture products per account and the extent of discount is low (about 29%). Because of this, we think that this loyalty program shouldn't compel you to spend more on IKEA if cheaper alternatives are available elsewhere.

Questions About IKEA's Market Position in Asia

Furnitures from IKEA tended to be bigger by dimension and pricier compared to their peers, which means that some IKEA furnitures may represent the "higher" end space in Singapore. For example, a 3-seater sofa from IKEA were about 31% longer in length than its competitors, representing larger area per seating and more luxury demands. The per-volume prices were also higher for over 47% of furnitures we surveyed in this study.

It should be noted that after first opening its Singaporean operation in 1978, IKEA has held a leading market position. We can find an example of its pricing power by looking at the same product sold in Singapore that is about 70% more expensive than in the U.S. As of 2017, over 1,900 companies are in the furniture manufacturing & retail business, potentially competing against IKEA. It remains to be seen how such competition will play out, but the furniture giant's market position seems to be a challenge in other neighbour countries as well.

Parting Thoughts

Furnitures can be a major component of the cost of belongings in your home. Because they are both expensive and highly personal, trying to reduce cost while maximising value can be a gruesome process. Despite the modern feel and its established loyalty program, IKEA isn't the most affordable choice when compared against its competitors. Not only that, there are good alternatives out there thanks to Singapore's robust furniture industry. We encourage our readers to consider online furniture retailers like those we discussed above, and also visit offline showrooms to consider the full list of their options to make the most of their home renovation endeavours.

The article IKEA: The Cheapest Way to Buy Furniture? originally appeared on ValuePenguin.

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