IKEA Boutique? IKEA opens Shanghai pop-up for budget items

On April Fool’s Day, Swedish furniture chain IKEA released a teaser video on Chinese social media. The video shows a CGI version of its iconic blue bag wading in the Huangpu River before flying to the Taikoo Li Qiantan in Shanghai. The video teases a “精品店” (boutique) from IKEA.  At the same time, hoardings were spotted at the mall, but on the hoarding board, the space between the “精” and the “品” seemed to suggest there was more to it.

A week later, on 8 April, IKEA opened the doors to the “IKEA boutique” in Taikoo Li. However, it soon transpired that it is not really for “精品” (high-end boutique products) nor is it actually a boutique, as in a proper shop. It is, in fact, a pop-up shop for IKEA to promote its lowered prices, as the full name is actually “精打细算的好商品店” (lit. store of thrifty and good merchandise), putting 6 more characters between the two. In fact, it is not the high-end boutique the April Fool’s campaign promised, but a pop-up location showcasing affordable offerings from the shop. Between 9-14 April, posting pictures of the boutique on Xiaohongshu (RED) with certain hashtags can also win you a free blue shopping bag.

Like many retailers such as Aldi and Freshippo/Hema, IKEA China has been switching its strategy away from the middle classes and towards competitive pricing. Earlier this year, the furniture maker announced that it is investing over 100 million RMB (13.82 million USD) to bring over 550 affordable items to China. The Swedish brand also launched the “Hej Friday!” half-price promotion in its restaurants. The famous Swedish meatballs, cakes and ice cream cones are all 50% off on Fridays between 15 March and 30 April.

Meanwhile, IKEA closed its experimental store in central Shanghai, aimed at the middle classes last July. It would seem that IKEA has joined the fray in lowering prices and competing with affordability. With its advantages of having a complete value chain in China, IKEA can lower its prices from various points over the process from design, manufacturing, logistics and retail. With the “boutique”, IKEA might also be exploring expansion and opening smaller shops in China. However, as it adjusts its strategy, low prices can make sure consumers win out.


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