Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Ikea is shifting its strategy in China by experimenting with smaller retail formats to attract more cautious shoppers, as the country faces an economic slowdown and increased competition. Known for its large big-box stores, the Swedish furniture giant is adapting to the changing retail landscape by adding more compact outlets across China.
“We have learned a lot about how to meet customers,” said Sara Del Fabbro, deputy retail manager of Ingka Group, Ikea’s largest franchisee. She emphasized that despite shrinking wallets, the demand for home furnishing remains strong. While no specific timeline was provided, Ikea has already begun testing smaller store formats in Xi’an and Shenzhen.
The new format, such as the 300-square-meter Plan and Order Point in Shenzhen, offers personalized advice for complex orders like kitchens. This format is just one-tenth the size of traditional Ikea stores, reflecting the company's efforts to provide more accessible shopping experiences in an increasingly competitive market.
Navigating China’s Challenging Market
Ikea faces significant headwinds in China, where the property market crisis has weakened demand for furniture. Sales in building materials and home furnishing stores across the country dropped 5.8% in the first seven months of 2024. Additionally, local competitors such as Red Star Macalline and Easyhome New Retail Group are gaining ground by offering customization services and strong online presences, which Ikea has struggled to match.
To stay competitive, Ikea has committed to a 6.3 billion yuan (US$862 million) investment in China over three years to open new stores, improve logistics, and bring lower-priced products to the mainland market. It is also ramping up its digital presence, with an official store on Tmall, as well as selling through WeChat and its own app.
Global Shift Towards Smaller Formats
Ikea’s move towards smaller store formats is part of a global strategy to address growing consumer price sensitivity. The company recently opened a smaller store in a Paris shopping mall and plans 10% to 20% price reductions for key products in South Korea. Additionally, Ikea has lowered prices on nearly 1,000 products in the US and hundreds in Sweden.
Ikea is also trialing Ikea Preowned, an online marketplace where customers can buy and sell pre-owned Ikea items, in several European cities. This approach reflects the company's broader effort to adapt to shifting consumer preferences and economic realities around the world.
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