作者：wanderer 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
IKEA Plans 10 New Stores in China
After six years of marking time in China, Swedish home furnishings giant IKEA has finally decided to speed up its expansion paces in the country.
The firm announced last month that it will open 10 new stores over the next six years, located in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Nanjing and Wuhan.
Most of the planned stores will cost US$40-80 million.
So far IKEA only has two outlets in Shanghai and Beijing.
B&Q, its major overseas competitor in China, which entered the country in 1999, has 18 outlets so far.
IKEA attributed the slow development to its "cautious attitude." "We have to take every aspect into consideration. We aim to establish wholly-owned stores," said Xu Lide, public relations manager of IKEA China.
Industry experts say IKEA has been "gaining the potential energy" since it entered China in 1998.
"The firm's development acceleration would be dramatic after the thorough study of the local market," said Wang Yao, director of China General Chamber of Commerce (CGCC)'s information department.
First of all, he said, the firm has successfully cultivated its target consumers nationwide, although there are only two outlets so far. IKEA's simple, minimalist-design products are winning a growing urban fan base among the middle class that has mushroomed in past years because of China's impressive economic growth.
Wang told China Business Weekly that domestic retailers from many parts of China have been seeking co-operation with IKEA through the help of CGCC.
"The Swedish firm is looking for long-term operation in China, and it does not favour joint ventures," Wang said.
Although IKEA did not reveal the way in which it will open the planned stores, it confirmed one of them, which will be open in Beijing in the second half of next year, will be wholly-owned by the firm, costing IKEA US$100 million. The outlet, with the area of 43,000 square metres, will be the firm's second-largest store worldwide, said Ian Duffy, head of IKEA's China operation.
The largest IKEA store is in Stockholm, covering the area of 55,000 square metres.
The firm declined to reveal if it is going to close the existing Beijing-based store , but said it is a joint venture, and its future should be decided by all partners.
The current store in Beijing, covering 15,800 square metres, is too small to display all of the company's products, Xu said.
Wang predicted that it is necessary to keep the existing store, since the market is big enough. "It is even possible to open a third store in the capital."
With the rapid development of the real estate sector, demand for home furnishing is skyrocketing, Wang said.
Fixed asset investment in the sector rose by 28.7 per cent year-on-year to 669.1 billion yuan (US$80.8 billion) in the first seven months of this year.
"With both the customers and market potential, IKEA will succeed in its expansion in China," Wang predicted.
He added 90 per cent of IKEA's products are under its own brand, which leaves large room for price cuts with intensifying market competition.
The do-it-yourself giant said it will cut the prices of its products by 6 per cent on average in China in the fiscal year of 2005, following the 5 per cent cut this year.
Xu said IKEA aims to make its products affordable to Chinese common customers. Its products have been perceived as medium- or even high-end in China, although it is a low-end brand in Europe and North America.
China now accounts for less than 1 per cent of IKEA's world business, but its growth possibilities are much greater than other markets and China is expected to become IKEA's No 1 business market within 10 to 15 years, Duffy said.
The company's turnover in China in the 2004 fiscal year ending on August 24 surged by 50 per cent to 1 billion yuan (US$120.7 million), the best growth result in IKEA worldwide.
Apart from its sales volume, IKEA's success also comes from the fact that China is now its largest supplier.
Duffy said 23 per cent of its products around the world are purchased and manufactured in China. "It's played a significant part in the reduction of prices."
He said this share could increase to 28, or even 30 per cent, within four or five years.
作者：wanderer 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
