Ikea to expand presence in China

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Last updated at: (Beijing Time) Tuesday, April 06, 2004

Ikea to expand presence in China

Ikea, the world's leading furniture brand, will expand its presence in China's mainland by opening eight stores in the next four to five years, Tuesday's China Daily quoted company source as saying.

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Ikea, the world's leading furniture brand, will expand its presence in China's mainland by opening eight stores in the next four to five years, Tuesday's China Daily quoted company source as saying.

Ikea has established two outlets in Shanghai and Beijing respectively. Another store is under construction in Wangjing, a newly established large residential community in northern Beijing,due to be open next year.

"We will look for two additional locations in Beijing," said Ian Duffy, president of Ikea China.

Ikea is investigating 14 different cities, such as Chengdu, Dalian, Nanjing and Qingdao, for possible location of new stores.

When Ikea arrived in China in 1998, it was regarded as an expensive Western brand. But it soon changed its strategy and lowered prices, based on China's huge market potential and Ikea's cost saving efforts.

The strategy paid off. Although prices dropped about 10 percent,sales rose by 35 percent last year and 50 percent during the firstquarter of this year.

Ikea International has a presence in 43 nations and regions around the world. "We expect Ikea China will be among the top fivebefore 2020, taking into account the rapid economic development ofthe nation, its surging gross domestic product (GDP) and people's increasing living standards," said Duffy.

Sources from Ikea also revealed that China is the top purchasing choice for the multinational in the 2003 fiscal year, as 18 percent of Ikea's purchasing fund was pooled into China.

As China will fully liberalize its retail market by the end of December, all restrictions on foreign operators will be lifted. Duffy, who started with Ikea 17 years ago and has been working andliving in China for the past two years, said he is confident aboutIkea China's prospects.

Source: Xinhua

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