Swedish furniture giant IKEA has urged the Chinese government to introduce additional stimulus measures. This request arises as China faces a prolonged property crisis and ongoing economic challenges. Recently, the government announced a stimulus package to revitalize the struggling economy.
IKEA stimulus support China
IKEA reported a 5% drop in sales for the financial year ending August 31. This decline underscores the company’s sensitivity to changes in the property market and interest rates. When consumers move homes, they typically spend more on furniture. Therefore, downturns in these markets directly impact retail performance.
Jesper Brodin, CEO of Ingka Group—which operates most IKEA stores globally, including those in China—acknowledged that consumer confidence in China currently lags behind the global average. Nevertheless, Brodin remains optimistic about the potential effects of the government’s stimulus package. He emphasized the need for even greater stimulation in the market, as it requires a little extra boost.
China contributed 3.5% to Ingka Group’s total global sales in the 2023-24 financial year, marking a slight decrease from the previous year. Despite this, IKEA is committed to expanding its presence in China. The company recently opened its fourth store in Shanghai’s Changning District, raising its total number of stores to 39. Additionally, store visits in China increased by 11% compared to last year, signaling some resilience in consumer interest.
In response to economic challenges, China introduced its most aggressive monetary stimulus package since the COVID-19 pandemic. This package includes significant support for the property market. Anticipation builds as the country’s Finance Ministry plans to hold a press conference this Saturday to outline details of the stimulus plan. IKEA executives, including Tolga Oncu, the retail manager at Ingka Group, are closely observing this situation. They are especially interested in how the stimulus plan will impact the Chinese economy and the home furnishing market.
IKEA stimulus support China
Source: Free Malaysia Today
