Ikea, the world’s largest furniture retailer, has pledged to keep prices low at its stores in China. The Swedish company aims to attract more budget-conscious customers and defend its market share against increasing competition from local rivals. Ikea faces challenges in China due to weak consumer spending, a cooling property market, and slowing economic growth, which have reduced demand for major home goods purchases. Ikea is known for its ready-to-assemble furniture, kitchen appliances and home accessories, offering a wide range of affordable and stylish products. Ingka, Ikea’s largest franchisee, operates most of the company’s stores worldwide.
To support its strategy, Ikea will invest 20 million euros (approximately $35.7 million AUD) in the fiscal year starting September 1. These funds will be dedicated to reducing prices further within the Chinese market. According to Tolga Oncu, chief operations officer of Ingka, this investment underscores Ikea’s commitment to remaining competitive in China.
“We are continuing to invest in lowering the prices in China compared with other countries,” Oncu told Bloomberg. He noted that it’s currently difficult to quantify the exact extent of price reductions in China compared to other regions. However, he affirmed that China is a priority market for investment in this area. The retailer is striving to maintain its appeal amidst a saturated e-commerce market where numerous low-cost alternatives mimic Ikea’s designs at lower prices.
