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IKEA 'planning now for the next 60 years' in nation

By WANG ZHUOQIONG | China Daily | Updated: 2025-03-25 10:09
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Shoppers are seen at an IKEA mall in Wuhan, Hubei province, in February. The household products' company serves about 90 million customers in China each year. JI PENGFEI/FOR CHINA DAILY

IKEA, a leading global home furnishings maker and retailer, remains deeply committed to the Chinese market, reinforcing its long-term presence through strategic investments in retail and supply chain operations and sustainable development, said its top executive.

Jon Abrahamsson Ring, CEO of Inter IKEA Group, said that the company is committed to China's economic landscape, innovative supply chains and sustainable initiatives during his participation at the China Development Forum 2025 held on Sunday and Monday in Beijing.

With a history of doing business in China spanning six decades, IKEA sees significant potential for continued growth. "We are very confident, we believe in China and are planning now for the next 60 years," Ring said.

The CEO said that the company aligns with China's long-term strategic vision, highlighting shared values in sustainability and accessibility. Serving about 1 billion customers annually, IKEA is committed to providing affordable home furnishing solutions while prioritizing environmental responsibility, he added.

Recognizing the vast potential of the retail market, Ring said that IKEA serves about 90 million customers in China each year but sees ample opportunity for expansion in a market of over 1.4 billion people.

He oversaw the retail business of IKEA in the early years when the company entered the Chinese market.

IKEA is evolving beyond its traditional large-format stores by integrating smaller store formats that are closer to urban communities, as well as enhancing its e-commerce solutions to reach more consumers.

In addition to its large store format in suburban areas, IKEA has introduced smaller retail formats in recent years which enable more frequent customer visits and attract new customers by bringing them closer to the brand. "Instead of visiting our big stores an average of four times a year, they now visit smaller stores 10 to 12 times a year," he said.

The company has also capitalized on its growth in global e-commerce. "We have gone from less than 5 percent e-commerce five years ago, to today where it accounts for 26 percent," Ring added.

In addition to retail, China plays a vital role in IKEA's global supply chain, contributing over 25 percent of its global sourcing. "We source almost all our material categories here in China," Ring said.

This regional strength allows IKEA to maintain a robust supply chain network, with 80 percent of its products sold in China being sourced from China. "The combination of global and regional capabilities makes us more resilient," he said.

IKEA fosters long-term relationships with over 300 suppliers in China, encouraging collaboration in innovation and sustainability efforts.

"On average, we have worked with our suppliers in China for 15 years or more. We don't just buy and leave, we develop methods to recycle materials, optimize production processes and minimize waste together," Ring said.

The company is also at the forefront of automation in furniture production. "Manufacturing today is highly automated, especially for bookcases, kitchens and wardrobes. It's a data-driven process, optimized from design to distribution," he said.

Sustainability is a central pillar of IKEA's strategy in China, with ambitious goals for renewable energy adoption and emissions reduction. The company has managed to grow global sales by 10 billion euros ($10.84 billion) over the past decade while reducing absolute CO2 emissions by 28 percent. "China is our leading market when it comes to renewable energy," Ring said.

He praised China's rapid advancements in renewable energy infrastructure, which have enabled IKEA to make significant progress. "In 2021, we had 5 percent renewable electricity in our supply chain in China. In fiscal year 2025, the renewable electricity share in our supply chain in China reached 92 percent," he said.

As IKEA continues to evolve in China, it remains focused on its founding mission. "For 82 years, we have done one thing — making good home furnishing products affordable for as many people as possible," Ring said.

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