Swedish retailer cutting prices in China
IKEA plans to add more stores in Shanghai, the Greater Bay area, and in cities including Fuzhou, Nanning and Kunming in the coming year.
Sweden’s home furnishing retailer IKEA plans to invest 200 million yuan (US$28.6 million) in China to optimize product manufacturing, design and logistics to boost sales and woo budget-sensitive buyers.
In the next fiscal year beginning in September, it will cut prices on some 250 items compared with about 100 products in the previous year.
Affordability will become its annual priority, after seeing an increasing awareness for products offering good value for money, according to Freda Zhang, IKEA China vice president.
Shanghai office worker Elf Chen said: “IKEA's products might not be the cheapest ones compared with local offerings but it still has a convenient and hassle-free shopping experience.”
She said she had spent about 20,000 yuan on new furniture from IKEA in the past month.
Products at lower prices in the new season include bestselling items such as sofas and bookshelves.
IKEA has yet to report its financial performance for the 12 months ending August, but Francois Brenti, also IKEA China vice president, said digital channels recorded a 67 percent year-over-year growth.
“Our digital strategies remain unchanged, which have proved to be effective in reaching out to new clients in locations not yet covered by IKEA physical outlets,” Brenti said.
Last year, the retailer said accessibility and digitalization were two crucial parts of its China strategy and physical stores were still important assets. It will also add more stores in Shanghai, the Greater Bay area, and in cities including Fuzhou, Nanning and Kunming
IKEA is not alone in its embracing local preferences for mobile shopping.
Sportswear retailer Decathlon tied up with Alibaba's on-demand delivery site Ele.me earlier this year for the delivery of around 200 types of products in selected stores in Beijing and Shenyang.
Other retailers are also stepping up their delivery services.
IKEA is also creating 2,000 new jobs in China next year, most of which will fuel new store expansions and digital innovation.
