Swedish furniture giant Ikea announced plans to more than double the number of stores it has in mainland China in the next five years, state media reported on Thursday.
Ikea — famed for its affordable but stylish flat-pack furniture — plans to have 16 to 18 stores on the mainland in 2015, up from its current eight stores in eight cities, executives told the China Daily newspaper in an interview.
“Although the Chinese market amounts to a small share of our global business right now, we are confident that with our sped-up expansion and China’s robustly growing economy, China will be the Ikea Group’s biggest market in 15 to 25 years,” Ikea Asia-Pacific President Ian Duffy said.
Currently, China does not rank in Ikea’s top 10 markets, the report said, adding that for the company’s 2010 fiscal year, revenue in China was 3.7 billion yuan ($555.9 million), up 23 percent from the previous year.
Globally, the group’s revenue from its 315 stores in 38 countries was €23.1 billion ($30.76 billion) during the same fiscal year, the report said.
Ikea officials in China were not immediately available when contacted by AFP for comment on Thursday.
The usually secretive privately owned company said in October that its board had decided in December 2009 to release an annual financial results summary.
Ikea started construction on a second Beijing store on Wednesday, which at a total cost of five billion yuan is its biggest single project investment worldwide, Duffy said.
It is considering a similar-sized investment in a second Shanghai store with stores also planned for Wuxi in the eastern province of Jiangsu and Wuhan in the central province of Hubei, the report said.
Duffy said Ikea’s sourcing, logistics and retail operations in China have allowed it to slash costs since it first entered the country in 1998.
“That’s the reason we can reduce the price of our products in China, for example, a coffee table from 199 yuan (205 kronor, $30) 10 years ago to 39 yuan today — the cheapest in the world,” he said.