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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Global furniture retailer IKEA is set to close seven stores in China, marking the largest restructuring since its entry into the country, as domestic demand softens and competition intensifies.
According to Chinese media reports on Jan. 12, the closures, effective Feb. 2, include flagship locations such as Shanghai Baoshan, the largest IKEA store in Asia, as well as stores in Guangzhou, Tianjin, Nantong, Xuzhou, Ningbo, and Harbin.
The company, which entered China in 1998, currently operates 41 offline stores, three online channels, and two flagship outlets on local e-commerce platforms. IKEA plans to shift from large-format stores to smaller outlets in key cities such as Beijing and Shenzhen to better align with market trends.
IKEA’s China revenue has declined for four consecutive years, falling from €2.476 billion in 2022 to €2.125 billion last year. Analysts attribute the slump to intensifying competition, supply chain imbalances, and limited online presence, despite the brand’s early popularity for introducing Nordic-style furniture.
IKEA is part of a growing trend of global firms scaling back or exiting China. Starbucks sold a 60% stake in its China operations to Hong Kong-based private equity firm Bouy Capital last November after facing strong competition from domestic chain Luckin Coffee. Amazon shuttered its Shanghai AI research lab in 2024 and previously ended its e-book service and e-commerce operations. Mitsubishi Motors exited the Chinese market entirely last year following the closure of its Guangzhou joint venture and Shenyang engine plant, citing challenges in keeping pace with the shift to electric vehicles.
IKEA’s move underscores the challenges global companies face in China’s evolving retail landscape, where offline dominance and online agility are increasingly critical.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
