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Discussion: Ikea rolls out plan to tap demand in China
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michael/hale |
Ikea rolls out plan to tap demand in China
Sep 23 2008, 8:29 AM EDT
http://www.iht.com/articles/2006/04/10/bloomberg/bxikea.php"Roughly one million people are entering the middle class each month and government policies to increase consumption mean this is an ideal time for us to expand in China,"said Ian Duffy, Asia-Pacific president for the home-furnishings company. "The average person living in Beijing can buy four times as much from us as he could when we opened in the capital in 1999." 0 out of 1 found this valuable. Do you?
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alexsvensson |
1. RE: Ikea rolls out plan to tap demand in China
Sep 24 2008, 3:07 AM EDT
Ikea, being a home-furnishing company focusing on very simple yet quality furniture, will surely, if marketing is done correctly, receive a huge demand in China. As more and more Chinese move into the middle-class, the Ikea-system, which is a very quick yet rigorous shopping tour, will appeal to the Chinese. Most people will find that Ikea is not only useful; it will perhaps be something exotic for the Chinese, as the comapny is Swedish. Most furniture companies in China today are run or owned by Chinese citizens, and therefore a foreign company offering the same prices will attract more customers and increase the demand.
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rdupeza |
2. RE: Ikea rolls out plan to tap demand in China
Sep 24 2008, 4:43 AM EDT
Because the Chinese income is obviously growing sending people into a middle class, the public will want to increase there all round quality of life not just be flushed. Ikea offers inexpensive quality furniture, if people want to increase their quality of life and Ikea offers better quality furniture which is affordable then the demand will go up substantially. As for competition with the local furnishing companies then the demand will depend on the types of products which are being offered by them. Ikea possibly offers different products from the furniture being sold by the Chinese companies allowing a new variety for the consumers. With new choices the competition will be determined on the quality, price, and personal taste. It is safe to say that the demand will rise but it is hard to say how much it will rise because the factors of choice are different for each consumer.
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JonathanRanstrand |
3. RE: Ikea rolls out plan to tap demand in China
Sep 26 2008, 8:32 AM EDT
Quite clearly, the average income in China is increasing quite rapidly (real income has qudrupled). Ikea offers affordable furniture, and their brand stands for quality and practicality. While I do agree with Alex, that some may find this new concept exotic and, perhaps, appealing, I would expect China to be a moderately successful market for IKEA. Ikea is attempting to take one furnishing concept and introducing it to a large number of markets. At som point, I think, consumer tastes and preferences might limit the demand for IKEA goods in China. Though they are cheap and generally good quality, their goods are not what would typically be expected on the Chinese market, so I would really only expect them to be moderately well-received. Of course, if tastes and preferences were to shift and IKEA goods would become exotic, then their demand might also increase quickly. Finally, I would disagree with Alex that the Chinese are more likely to buy similar goods from a foreign than national company. Having lived in China, I know that foreign brands can be very popular there, yet in many countries, consumers consciously buy local products in order to support local companies.
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alexsvensson |
4. RE: Ikea rolls out plan to tap demand in China
Sep 26 2008, 8:40 AM EDT
It may be true that Chinese might prefer buying furniture that match their traditional style more, as Jonathan mentioned, but I believe that in the ever increasing rate of globalization, the Chinese may perhaps be more eager to adapt to world-wide tastes than to use their own. Although many nations in the West have gone back to valueing traditional, national goods, markets such as China and India have not reached this point yet. Perhaps China will even skip this step, and dive head-first into a global world of economy. China knows that it has the means to do so - now, it must just decide if it is really willing to do so. Looking back at IKEA, the Swedish company will probably also try to adapt their furniture slightly, so that it matches with Chinese style.
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Taratynkin |
5. RE: Ikea rolls out plan to tap demand in China
Sep 28 2008, 1:22 PM EDT
Yes I agree with Alex that Chinese traditional taste will herm the demand for Ikea. I think that 60 years living in socialist country already decreed the importance of traditional in average Chinese lifestyle. Developing of markets is best market for ikea, with its cheap but quility furnuture, because majority of people there alresdy rich enough to buy furmiture a lot. but not rich enough to demand more than that. Ikea, as many other company, realizes that soon in China 1 billion of midle-class potential customers will apear and want to be the first to take its peace of a market
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GuillaumeDubois |
6. RE: Ikea rolls out plan to tap demand in China
Sep 29 2008, 2:02 PM EDT
I would have to bring up the essential economical fact before discussing this topic - supply. Producers are always on the lookout for cheaper ways to produce more for a higher market price. Therefore, China presents an opportune choice for large firms with it's low labor and capital costs. This confirms the thoughts that Ikea itself will find advantages to integrating China into it's operations. Will this confirmed, all that is left to discover is if the CONCEPT of furniture that Ikea manufactures is of Chinese 'taste'. I have noticed that several posters are mentioning that the success will be because of the low priced furniture. I believe differently. Currently, China has possibly the highest economic growth, which exceeds that of any European country (or America for that matter) and is off the charts. Ergo, China will slowly move out of the cheap-inferior furniture market and maybe will see Ikea as a superior market that, although still lower priced, has appeal. Naturally, over many years as China continues to boom, I assert that even Ikea will move out of the eyes of the Chinese and become an inferior good. Why? Well let us look at Europe for a minute. Yes, Ikea is popular however several families (specifically those of 'higher' class) do not want to purchase any more furniture due to the "cheap" reputation of Ikea. Lets face it, it isn't designer (I must say though, I am sitting at an Ikea desk now...and it has never failed me). As a bottom line, I like to claim that if the economy continues to prosper globally, after time the population will move on to different products, and Ikea may have to change their standards if they are to stay at the top as they are today. Do you find this valuable? |
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lkluegel |
7. RE: Ikea rolls out plan to tap demand in China
Oct 22 2008, 3:08 PM EDT
It is evident that the demand for IKEA in China is enormous due to the growing wealth of the average citizen. In fact China is an ideal market for basically any consumer product. Why especially western goods are sought for is easily explained. One factor is the luxurious image they bear, the other is that China's economy is built upon manufacturing more or less simple goods that are then exported, like toys, ect, meaning that Chinese companies have very little experience in producing modern goods, such as furniture, at high qualities. The success of IKEA in China is therefore also based on the fact that the new middle class is more willing to spend money and they lack choice to do so. Do you find this valuable? |
