With a debut in India highly anticipated, Swedish furniture retailer Ikea is also planning to accelerate its presence in one of its important markets outside Europe – China.
In January, Ikea said it planned to invest 3 billion euros (US$3.75 billion) in new stores, retail centres and factories. In China, Ikea will open three stores annually which would create 1200 new jobs per year, said CEO Mikael Ohlsson.
Ikea will also continue to cut prices to make their products more affordable for Chinese consumers.
“Over the past years we have dramatically reduced our prices in China,” Ohlsson said. “We will continue that this year and also next year to be more affordable for more people.”
Without providing a timeline, Ohlsson said Ikea will start preparing to open in India once the conditions are ripe there. Indian government allowed 100 per cent foreign direct investment to foreign retailers like Ikea, however, a mandatory local sourcing clause of 30 per cent prevents most foreign retailers from entering the country.
“We are following very closely positive movement of legislation in India and try to understand the consequences,” Ohlsson said.
Ikea’s sales in fiscal year ended August 31 increased by 6.9 per cent up to 25.2 billion euros (US$31.4 billion) with the fastest growth seen in Poland, Russia and China. This year, the retailer expects 20 per cent sales growth in China.
Ikea now has 11 stores across mainland China after 14 years in the market. It also plans to open stores in South Korea.
GB
