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IKEA in China, Sweden and the UK

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IKEA in China For IKEA the step into the Chinese market was a big step, maybe as big at the first step abroad to Switzerland and the first store on foreign soil (Spreitenbach) in 1973 (Torekull, 1999). It meant entering China and its gigantic – at least potentially – consumer market. IKEA targets different group of people in China than in countries later in the IKEA ‘life cycle’ (i.e., life cycle based on how long IKEA has been on a market). The main target group is female customers – 65 % of all customers. Women, according to IKEA, stand for change in China and they welcome change (and IKEA see them selves as providing the tools for change in at least one area). 8 Men are also part of the target group but more indirectly as…show more content…
China is a big sourcing country for IKEA. Still, for many products IKEA China sources were everybody else in IKEA sources, for example Poland. In China that has meant that imported product were subject to import taxes (22%) and it also involved a lead-time of 12 weeks (it is now down to 5 weeks). To be able to keep cutting prices on the China market IKEA China has been allowed to exceed and expand its sourcing of products in China, while the rest of IKEA still sources the same products somewhere else in the world. The actual figures differ a little on how much in a Chinese IKEA store that is sourced in China. Some say that half of the products in an IKEA store in China are made in China, compared to 23% in IKEA stores overall (The Wall Street Journal, 2006). IKEA says 30 % and in addition to that 500 more articles were the local trading office are now looking for Chinese suppliers. According to IKEA, this has really resulted in lower prices as prices have dropped at least 30% since 2003, on some products the price has dropped as much as 90%. IKEA’s single-seat Ektorp armchair retail for 112$ in China, 67 % lower price than one sold in the US (The Wall Street Journal, March 3, 2006). IKEA, like many other companies doing business in China, is subject to copying. One observer noticed that many Chinese shoppers in IKEA were drawing pictures of the furniture and scribbling down descriptions of the products but not necessarily buying
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