Swedish home furnishing firm IKEA plans to raise its investment and presence in China as part of its localisation strategy to expand business and cater to shifting local demands. The company will make its biggest investment in China in fiscal 2019-20 and more in the following two years as home furnishing is expected to boom in China, IKEA China announced.
The plan is part of IKEA China’s ‘Future+’ strategy for the local market in the next three years featuring enhanced accessibility, digitalisation and home expertise services, according to a report. Apart from the stable growth witnessed in China’s home furnishings market now, urbanisation, digitalisation and rising disposable income are changing the way people live and consume, according to Anna Pawlak-Kuliga, Chief Executive Officer and President of IKEA China.
As part of the plan, IKEA will upgrade its existing stores and will accelerate expansion in the country by opening four new stores in four months. E-commerce coverage will also be expanded, while small stores will be opened to create more meeting places close to consumers. The company will offer digital tools offline to simplify the shopping process, creating an inspiring and convenient shopping experience online. A digital hub was established last month as a new business unit to enable its digital capabilities.
More diverse business models will be explored, including launching full-house design services and upgrading its business-to-business service to work with commercial real estate companies on furnished apartments, long-term rental apartments and offices.
The company opened its first China store in Shanghai in 1998, and now operates 27 stores, two experience centres, four distribution centres and seven parcel delivery centres on the Chinese mainland. It launched e-commerce services in October 2018 covering 227 cities and areas. China is the only market other than Sweden that has a comprehensive IKEA value chain.