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Business / Companies

Ikea builds its China business into top 10 spot

By Li Fangfang (China Daily) Updated: 2014-08-20 07:18

Sweden's Inter Ikea Systems BV, the world's largest retailer for home furnishings, said China became one of its top 10 markets by revenue for the first time in the current fiscal year, which ends on Aug 31.

"China will be Ikea's No 10 market in the year ending on Aug 31, when we officially announce our financial figures," said Zhu Changlai, Ikea's retail manager for China.

"In the coming years, Ikea will maintain the expansion speed of opening at least three stores a year, as we did in the past several years, so that we will see China become one of our top five markets before 2020, for sure," she said.

Ikea builds its China business into top 10 spot 

New IKEA store in Xi'an

Ikea builds its China business into top 10 spot 

Ikea assembling a strategy for the future

Stores in China are the fastest-growing in the world for the group.

Zhu said that Ikea's family membership increased by 13 percent in the first 11 months of fiscal 2014 to 9.5 million in China, and visits to its websites jumped by 16 percent.

Peter Agnefjall, the retailer's chief executive officer, told China Daily in an earlier interview that Ikea expected revenue from China to more than double by 2020, based on the 6.3 billion yuan ($1 billion) it generated in fiscal 2013.

Ikea now has only 15 stores in 12 cities in China, a small number for a group that operates more than 350 stores in 44 countries.

"We will see a new store opening its doors to local consumers in Wuhan, Hubei province, in September, and two others in Xi'an, Shaanxi province, and Hangzhou, Zhejiang province, in 2015," said Zhu.

"By 2020, Ikea plans to have 34 stores in China."

In 1998, Ikea opened its first China store in Shanghai, and one year later the second opened in Beijing. But it was 2005 before the third Ikea opened, this time in Guangzhou.

"We laid a solid foundation in China in the early years, which supported the ensuing fast expansion that in turn made China one of the top 10 markets in such a short period," said Zhu.

However, Zhu said that despite rapid revenue growth in the country, the average prices of Ikea products in China have been cut by about 20 percent in the past five years.

"China has become a top market for Ikea globally, with top priority for new products, solutions and business models," she said.

According to Zhu, in the second half of 2015, China will be the first country for Ikea to launch an innovative intelligent wireless power-charging system that is integrated into furniture and lighting appliances.

And in 2016, Ikea will launch e-commerce in China, offering convenient service and products to its customers nationwide.

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