How is ikea doing in china

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Visit emeraldpublishing. Answers to the most commonly asked questions here. To read the full version of this content please select one of the options below:. Other access options You may be able to access this content by logging in via your Emerald profile. During the last weeks, the total sales are also back to growth. And we are confident that the market is also developing in such a way," said Brenti.

IKEA is just one of the foreign-invested retailers excited by the prospect of growing business here. Leading Japanese household goods specialty store LOFT, which operates branches in its home country, opened its first store on the Chinese mainland, in Shanghai, last month. Japanese bookstore chain Tsutaya is expected to open a store in Shanghai by the end of And earlier this year, U. Tesla announced an expansion of its Shanghai plant. And retail giant Costco began working on its second store in Shanghai.

So it's inevitable that foreign-invested retailers would expand in the market. When he started selling his low-priced furniture, his rivals did everything to stop him.

Local suppliers were banned from providing raw material and furniture to IKEA, and the company was not allowed to showcase its furniture in industry exhibitions. What did IKEA do? It innovated to stay in business. It learnt how to design its own furniture, bought raw material from suppliers in Poland, and created its own exhibitions.

Today, IKEA is the world's largest furniture retail chain and has more than stores globally. To meet local laws, it formed a joint venture. The venture served as a good platform to test the market, understand local needs, and adapt its strategies accordingly. It understood early on that Chinese apartments were small and customers required functional, modular solutions. The company made slight modifications to its furniture to meet local needs. The store layouts reflected the typical sizes of apartments and also included a balcony.

The company initially tried to replicate its existing business model and products in the US. But it had to customize its products based on local needs.

American customers, for instance, demanded bigger beds and bigger closets. The challenges it faced in China, however, were far bigger than the ones in the US. As the company opened more stores from Beijing to Shanghai, the company's revenue grew rapidly.