IKEA’S
LARGEST ASIAN STORE OPENS IN SHANGHAI
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| Ikea
sees hugh potential in the Chinese market |
Swedish
home furnishing giant Ikea has opened its biggest Asian store in
Shanghai and vows to go downmarket to increase mainland sales tenfold
over the next five years, South China Morning Post reported.
The US$60 million, 33,000 sqm store, in the Xujiahui district of
Shanghai, has 7,500 items on display and is more than four times
the size of the building Ikea leased nearby, which has since closed.
“We plan to open 12 stores before 2010. Many cities, from Tianjin
to Urumqi, have approached us and asked us to open a store. Our
overall aim is to increase sales tenfold over five years,”
Ikea director for China Ian Duffy told the newspaper.
Ikea also has a store in Beijing. Last year, China accounted for
about 1% of global sales, which reached 11 billion euros (US$12.87
billion). Ikea has 175 shops in 31 countries and regions. “By
2010, we expect China to be our fourth or fifth-biggest market in
the world,” Mr Duffy was quoted as saying.
To achieve its ambitious goal, the firm will cut prices. “When
we came to China, we made mistakes and charged high prices, which
damaged our profile because we were seen as expensive. We want to
correct that mistake. Making our products affordable is one of the
biggest challenges we face. We want to appeal to the majority of
the population.”
The Shanghai store will offer virtually every Ikea product available
in other outlets worldwide. The opening has been accompanied by
an advertising blitz in the media.
China is the biggest single supplier for Ikea, producing about 15%
of its goods globally. Mr Duffy expected that figure to increase
to 18-20%, the newspaper said.
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