Ikea will open its first small-format store in Beijing’s eastern Tongzhou district on May 6 in the Wanli commercial complex, the company’s latest step as it adapts to weaker demand in China’s home-furnishing market [1].
The outlet covers about 1,500 square metres, far smaller than Ikea’s standard 30,000-square-metre stores, and will include 20 display areas [1]. It will mainly target young couples and families with children [1].
The shift to a smaller format comes as China’s property market slump has hit home-furnishing demand, pushing Ikea to test formats that are closer to where customers live and travel [1]. Jay Lau, an analyst at S&P Global Ratings, said footfall at Ikea’s smaller stores could improve because they are “closer to residential areas and transport hubs,” making them more convenient for shoppers than large-format stores [1].
Tongzhou is Beijing’s municipal administrative sub-centre and has a young population with a rising share of families, factors that make it a fit for the new format [1]. Ikea first entered the Chinese market in 1998 and has since expanded its presence there as it looks for ways to keep drawing shoppers in a tougher retail environment [1].
The store is scheduled to open on May 6 [1].
