IKEA China has announced its “Growth+” strategy, committing to an investment of 6.3 billion RMB (863.98 million USD) over the next three years in professional home solutions, personalised services, and an omnichannel approach. The new plan emphasises a long-term price reduction on over 300 products, with IKEA China Senior VP Francois Brenti highlighting that the brand will introduce more than 2,000 new products to the Chinese market in 2024.
This strategic unveiling comes in the wake of some significant changes for IKEA in China. Earlier in the year, the company made the decision to close its pilot Shanghai Jing’an City Store, along with two other offline stores. Despite these closures, IKEA continues to grow, with the current operational count at 34 shopping malls and two experience stores in mainland China.
Jesper Brodin, CEO of Ingka Group, the parent company of IKEA, discussed these strategies and decisions with the local media at the newly renovated IKEA Xuhui Mall in Shanghai on September 8. Brodin clarified that while there is a focus on price reduction, the brand does not intend to achieve this by shifting its supply chain. Instead, the emphasis is on collaborating with suppliers for innovative solutions and leveraging technological advances to decrease costs.
Digital advancements have been a focal point for IKEA, with efforts channelled into WeChat mini-programs, official APPs, and Tmall flagship stores. The company’s digital approach seems to be yielding results, with their fiscal year 2022 report showing a 6.5% global increase in sales, and online sales making up 22% of that figure.
As part of its ongoing commitment to the Chinese market, IKEA has emphasised that part of the 6.3 billion RMB (863.98 million USD) investment will be used by IKEA to boost digital development, operations and automation efficiency improvements.
As part of its ongoing commitment to the Chinese market, IKEA will soon open a store in Xi’an and the multifaceted Shanghai Linkong Huiju complex. Another innovative venture in China will be the launch of the “Inspiration Design Center”, aiming to provide customers with personalised home customisation. Over the next year, around 5-6 of these centres are planned to be opened in Beijing and Shenzhen.