German furniture distributor Asko opened its first Hungarian outlet in Budapest on WednesdayGerman furniture distributor Asko opened its first Hungarian outlet in Budapest on Wednesday. The company attracted a massive crowd with its grand opening discount teasers. The store sprawls on 7000 sq m in Budapests Savoya Park in the 11th district. Asko chose this location because it is the companys expansion philosophy to set up its first unit in a mall that also sports a hypermarket.
Akos Penzinger business manager at Asko Butor Kft said the company aims to take 20-25 per cent of the Hungarian furniture market, through opening 8-10 outlets in Hungary over the coming three years with a EUR 40 million investment.
Penzinger noted Asko has an edge over its competitors, Ikea, Kika and Sconto, since it can offer its products almost 20 per cent cheaper to the notoriously price-sensitive Hungarian customers, due to beneficial procurement agreements and a minimal profit gap.
The furniture chain owns 6 shops in Germany, 9 in the Czech Republic and 4 in Slovakia. It claims to have higher sales in the Czech Republic and Slovakia than Kika, Austrias leading furniture retailer. Asko wants to achieve a similar position in Hungary, as well.
The company has tested furniture “consumption” patterns in Western and Central Europe, only to find that Hungarians tend to consider their furniture as consumer durables, which makes them almost fully immune to changes in furniture fashion.
The market survey also found that per capita spending on furniture is the highest in Hungary and in Central Europe as a whole. Asko believes one of the reasons is that Hungarians have also started to pay more attention to the style of their home furnishings.
The company wants to have a nationwide network of selected and up to date products up and running by the time the Western European furniture changing practices filter through to Hungary, as well.