Furniture giant IKEA sees rapid growth in China
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E-mail CNTV, November 8, 2013
It's been 15 years since IKEA arrived in China. This year, its sales have surged by 17 percent. And the company says adapting to Chinese consumers has been a key part of its strategy. On Thursday, the furniture giant opened its 14th store in China.
The world's biggest furniture company, IKEA, has finally cracked Chinese market. With thousands of Chinese waiting outside its new store in south Beijing when it opened on Thursday. IKEA'S second in the capital. It's found success by breaking the retail rules. Letting customers snack on their sofas. And sleep in their beds.
Reporter: "In China, going to IKEA means far more than just going shopping for furniture. It's an experience that often lasts all day."
IKEA's stores in China are often full well into the night. With families playing house, couples on dates. And people just lounging around. This year, its China stores saw 43 million visits - driving up sales by 17 percent. By offering something both fun - and practical.
"I like coming here because it sells the things I need at reasonable prices. My son can also play here."
But the sales surge came at a cost - moving production to China to lower its prices. And tweaking its product range.
"For example in China we have many balconies, so we offer more balcony furniture. And in China every house has a hallway leading to the living room, so we also have more solutions for hallways." Angela Zhu, president of IKEA China Retail, said.
Reporter: "You've also adopted a somewhat relaxed approach to Chinese shoppers. Letting them sleep in stores for example. What's your rationale for this?"
"We want them today to test our products, and tomorrow buy something." Zhu said.
Compared to other foreign retailers, the Swedish furniture giant is seeing more success in China. Take for example, Tesco, which after years of falling sales in the country, entered a joint venture with China Resource Enterprise; with the British retailer owning just 20 percent. Experts say Chinese consumers want more than just a product.
While IKEA won't comment on whether they're profitable in China yet, they're growing fast. With plans to add three new stores here, every year. In the hope that their investment will pay off.
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