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Ikea has shut seven large stores in China, as the furniture retailer’s new strategy takes shape against a challenging consumer backdrop in the mainland.
Big stores in cities including Shanghai, Guangzhou and Nantong closed on Monday after what the Swedish furniture retailer described as a “store network optimisation”.
Ikea’s strategic shift to smaller stores comes as China’s consumer markets struggle to gain momentum amid a prolonged property slowdown that has weighed on sentiment.
Ikea is reviewing its store portfolio in a number of countries under chief executive Juvencio Maeztu of Ingka Group, the company that runs most of them.
The world’s largest furniture retailer has transformed its business in the past decade, boosting its online presence and opening stores in city centres and smaller stores rather than just its out-of-town warehouses.
In a statement last month, Ikea said China would continue to be one of its “most important and strategic markets” and that it would open 10 smaller stores in Beijing and Shenzhen over the next two years. The company is also closing some stores in the UK and Japan as it adapts to changing shopping patterns.
Ikea added in the statement that it reached a potential customer base of 1bn people in China and operated 41 “offline customer meeting points”. In recent weeks, users on Chinese social media posted photos and videos of long queues of shoppers and farewell tributes to the closing stores, which had become a symbol of China’s opening up to western brands decades ago.
Sun Yingyi, from Ningbo, went to the city’s closing Ikea store yesterday. “Whenever she sees the blue buildings from the high-speed train, she’ll shout ‘Ikea’,” she said of her three-year-old daughter.
The country’s official data on retail sales, released monthly by the NBS, showed a year-on-year rise of just 0.9 per cent in December, the lowest rate of increase since Covid-19 swept the country three years earlier as restrictions were dismantled.
In 2024, Ikea said footfall was rising and confidence was returning to the country as it unveiled a new Shanghai location. Ingka Centres, the real estate division of Ingka Group, spent Rmb8bn ($1bn) on the retail and commercial centre, its most expensive ever project in the mainland.
But it is also operating in a market with highly developed and competitive ecommerce platforms, such as Alibaba’s Taobao and JD.com. Ikea has recently launched a new online store on JD.com, adding to its own app and mini-app on WeChat.
The furniture retailer has sourced from China since the 1960s, but it launched its first store in 1998 and followed up with a number of expansive outlets catering to the country’s booming consumer market. The brand soon gained a cult status domestically with shoppers occasionally taking naps on the showroom beds.
“The Baoshan Ikea carries so many memories for me,” wrote one user who uploaded a photo montage of the north Shanghai store to social media platform Xiaohongshu.
Another video from a user in Guangzhou showed Ikea staff in yellow shirts waving farewell to customers, with one shouting out “wishing you prosperity” in Cantonese, a traditional New Year saying in China. Separate local media footage showed a rush to snap up clearance items, with two women in Harbin battling over a mirror.
With contributions from Wang Xueqiao in Shanghai
