Although Ikea has provided a home furnishing and bedding market in China for fifteen years, the home superstore just recently developed a greater understanding of the Chinese marketplace. While Ikea is a Swedish/Dutch based company, the store is widely known all over the world for their reasonably priced home goods. Especially considering China’s obsession with popular American stores and brands, one would expect that Ikea would see impressive profits, however, this has not been the case. Ikea has preformed rather poorly in the past in China, despite the many locations. The Chinese cultural preferences for Anglicized goods has yet to benefit Ikea. Chinese consumers find that although these items are popular in America, they are far too expensive, and lack the immediate recognition as famous brand goods. While a Louis Vuitton bag is a less practical purchase than an Ikea bed frame, and moreover potentially more expensive, the Chinese appreciate the value of a trendy accessory more than necessary goods.
Ikea has learned from their initial failure in China and has adopted some new techniques and policies that will hopefully improve business. The store now is the greatest commercial landowner in China with twelve stores, and three more on the way (including a third location in Shanghai, and a second in Beijing). They have wisely decided to cut their prices in half to account for consumer preferences. Furthermore, they have taken advantage of the Chinese cultural appreciation for the shopping experience over the actual goods. They kindly tell visitors to not fall asleep in the store [while not vigorously enforcing that enjoinder, as per the photo], with the hopes that they will still buy the mattress they took a nap on.
Ikea’s experience with the Chinese market ties together the cultural preferences of the people with the nation’s economy. Clearly China has a consumer driven economy. For the nation to continue to prosper, other stores need to take note of Ikea’s adaptations to the specific market.
article source: “Ikea at Last Cracks China Market, but Success Has Meant Adapting to Local Ways.”South China Morning Post. N.p., n.d. Web. 10 Sept. 2013.
Image: Kim Wall from South China Morning Post