IKEA has canceled its $38 million investment in what was to be its largest logistics hub in Asia, citing the rapid evolution of consumer lifestyles and the dominance of e-commerce. The hub, planned for a 102,000-square-meter site in Pyeongtaek, Gyeonggi, will now be sold for 55 billion won ($38 million), according to the report by the JoongAng Daily.

The decision comes amid IKEA Korea's adaptation to sluggish growth in the region, marked by fierce competition from local online retailers such as O!House and Coupang. While IKEA's revenue from September 2023 to August 2024 grew 4.2% compared to the previous year, and operating profit surged 616%, these figures remained below the company’s peak performance during 2020–2021.

In recent years, IKEA Korea has scaled back its expansion efforts, scrapping new store plans in Gyeryong and Daegu in 2022 and 2023. The Gangdong branch in eastern Seoul, now delayed, will be its first offline store opening in four years. Local competitors offering quick delivery and inclusive installation fees have intensified market pressures, forcing IKEA to shift focus toward online fulfillment and competitive pricing.

Despite these challenges, IKEA has implemented price cuts on 1,200 products in Korea this year and invested in automated fulfillment systems to integrate offline stores as logistics hubs. The company also affirmed a 300 million Euro ($300 million) three-year investment commitment announced in March, focusing on enhancing its hybrid shopping model.