Fans of IKEA in Hangzhou will have to accept a rain check from IKEA. Back in October of 2008, IKEA China’s vice president for real estate purchasing Gao Feng and the vice governor of Hangzhou’s Binjiang District Yu Xiao’an signed a investment letter of intent for a new IKEA store in Binjiang District, Hangzhou, which promised IKEA’s fans in Hangzhou that in the near future they will not have to spend extra money on delivering the furniture from the Shanghai outlet.
A representative in charge of the project said at that time that the new IKEA store would be located to the south of Jiangnan Avenue, to the west of the Times Avenue. Covering a total area of over 80,000 square meters, the construction of the store was scheduled to be started in 2009.
It’s mid-2010 now, but the sprawling site earmarked for the construction of the hallmark huge blue ‘box’ – the Hangzhou IKEA outlet, remains what it looked like two years ago. For many concerned IKEA fans, the project seemed to have been forgotten.
According to Chen Weiyu, deputy director of the Outbound Trade and Economic Cooperation Bureau of Binjiang District, the project is now officially suspended.
Partly due to the global economic recession, there have been changes in the market exploration strategy of IKEA in the China market in the past two years, considering that sales in some second-tier cities in China such as Chengdu and Nanjing turned out to be not as good as the company had expected. Insiders have suggested that IKEA will focus on the sales of several major cities in China and postpone its expansion strategy in other cities in mainland China in the next three years.
In 2009, IKEA China underwent a major overhaul in its human resources, in response to the global financial turmoil.